Swampscott bracing for possible mid-year budget cuts

SWAMPSCOTT – Town and school employees could start receiving pink slips by January, according to local officials.Town Administrator Andrew Maylor and School Business Manager Ed Cronin said mid-year layoffs could become a reality and it’s something departments are already preparing for.Maylor and Cronin said in many ways cutting the budget in the middle of the fiscal year is more devastating than cuts made at the beginning of the fiscal year.For example, Maylor said if a community needed to cut $50,000 from its budget at the beginning of the fiscal year, he would need to cut one full position and part of a second position to compensate for unemployment insurance because none of the money would have been spent yet. In the middle of a fiscal year, a community would need to cut two positions and part of a third to cover unemployment because it has already spent half its salary budget for the year.The state is facing a $1 billion deficit for the current fiscal year and Gov. Deval Patrick has asked for expanded 9C powers, which is a section of the Massachusetts General Laws that governs state finances and deals with revenue deficiencies. It outlines what steps the governor can take to ensure a balanced budget when projected revenues fall short of projected spending levels. With 9C power there are limits to what the governor can do without legislative approval. He would only be allowed to make cuts within executive branch agencies on his own, which means he could not reduce local aid. But expanded 9C powers could give Patrick the authority to cut local aid.Maylor said communities across the state are waiting to hear whether the governor would be granted expanded 9C powers, which would enable him to make mid-year budget cuts that could affect local aid for the current fiscal year.”The cash flow issues raised by (state) Treasurer (Tim) Cahill recently make us concerned that a future quarterly state aid payment will be delayed, thereby jeopardizing our ability to pay our bills without issuing revenue anticipation notes,” he said. “With this as a backdrop, we have agreed to prepare a series of mid-year cuts to cover four different possible reductions in FY’09 revenue estimates.”Maylor said the town is preparing for possible cuts in the amounts of $100,000, $200,000, $300,000 and $400,000. He said the town would shoulder the burden for 40 percent of any possible cuts and the schools would be responsible for the other 60 percent.School Business Manager Ed Cronin agreed with Maylor that mid-year layoffs could be a necessity, even in the schools.”We’ve squeezed everything we possibly can.” he said. “There aren’t many places left to cut. If we have mid-year reductions in state aid there is no doubt we will be looking at laying off personnel.”Maylor said even if the town is able to dodge the bullet and mid-year cuts aren’t necessary, the town could still find itself in a position where it is laying people off in January in anticipation of the fiscal year 2010, which starts on July 1, 2009.Maylor said it could be necessary to eliminate as many as seven positions by Jan. 1 on the town side and Cronin said it is possible the schools would have to lay off employees in January as well.The school district is also looking at the possibility of closing an elementary school at the end of the academic year to help balance the budget for FY’10.