While the operating budget appears at first blush to increase by only $300,000, adjustment for a change to both revenues and expenses brought about by action taken at the State level shows that total net new money for the FY 2011 operating budget is approximately $1,900,000. But the sobering fact is that this entire sum is almost exactly the same as the total cost increases in health care and pension funding. Said differently, health care and pensions will together consume all the new funds available for FY 2011 even when including the $440,000 in revenue anticipated from the recently-adopted meals and lodging excises.The Salem News last week had a story summarizing the budget, and the Mayor's comments.
In his introductory letter, Scanlon also again reminds us that when the new high school was approved, it was with the provision that the schools stick to a 2.5%-3.0% annual growth rate.
You have no doubt heard that the school system plans to make reductions in personnel for FY 2011. I believe it is important to repeat that when we made the decision to move forward with the High School renovation project it was agreed by the School Committee, the Superintendent, the Mayor and the City Council that future budget increases in the city's contribution to the schools would be limited to 2.5% to 3% annually. We have met this commitment with $1,050,000 in additional city funds for FY 2011. This decision was made recognizing the increased debt service requirement brought about by the city's share of the $80,000,000 reconstruction project.What Scanlon never mentions when he repeats this statistic, which he does quite often, is that the schools are also faced with ever increasing health care and pension costs (growth rate for FY11 was 11%). So in order to stick to an overall growth rate of 3%, the additional cost of health care—as well as reductions in local aid and other state contributions—must be made up for with deep cuts elsewhere, often in areas that affect core education.
The City Council will discuss the schools' portion of the budget with Dr. Hayes on Wednesday night, June 9th at 6:30 pm, and will host a public hearing on the full budget on Monday, June 21st at 7:00. Both meetings will be held at City Hall, and televised on BevCam [we are trying to confirm whether they will be carried live].