Fiscal cliff fall will affect everyone

LYNN – Municipalities and mere mortals will likely survive a drop off a fiscal cliff in the short term, but the long term is looking more uncertain, say local officials and financial advisers.Cities and towns, individuals and business owners are all facing perilous financial futures at the start of 2013 if Congress doesn’t change a law enacting tax increases and spending cuts set to go into effect at midnight Dec. 31, effectively sending the economy into recession, economists warn.”That’s the one thing: Everybody is in the same boat,” said Mayor Judith Flanagan Kennedy.Kennedy said she is not terribly worried about the predicted impending doom, expressing confidence the city can absorb the damage of a fiscal plunge. But she is not without concern: The city could see a cut in grant opportunities as Gov. Deval Patrick hints at the possibility of a $9 million cut to state aid, and Kennedy said she worries that General Electric, which is still one of the city’s largest employers, could be affected by all of the uncertainty.See also: Local town officials brace for impact from fiscal cliffPromises of a deal that could prevent such financial risks for communities like Lynn have waxed and waned in Congress, with a measure failing a week ago in the House of Representatives. Many political observers saw that as Congress’ last best chance to put on the brakes before Dec. 31, according to the Associated Press.”We’ll adjust to whatever they throw at us; I just wish everyone would stop acting like middle-schoolers and work together to fix this,” Kennedy said, referring to federal lawmakers.Lynn’s chief financial officer, Richard Fortucci, agreed with Kennedy that the city could likely absorb a hit this year, but he said next year raises a bigger question: Will aid continue to drop or will Congress pass a law after the new year to stem some of the damage?”I think in the short term we’re good, but in the long term, who knows what will happen,” Fortucci said.Individual taxpayers have a particularly steep fall if Congress fails to pass a middle-income tax break by New Year’s Eve: Individuals that make approximately $150,000 or less could see a tax increase of up to $2,000 if Congress doesn’t pass a middle-class tax break, Fortucci said.”I’m more concerned about my personal finances than the city’s,” Fortucci said. “A $2,000 increase in taxes is significant for a lot of people.”But that, too, requires a long-distance viewpoint, said Christopher Joyce, a financial planner at LPL Financial in Lynn.”There’s always legislation that’s in the works that can correct these things – whether it happens or not, who knows,” Joyce said. “Right now it’s a staring contest of worst-case scenarios, trying to get the other guy to blink.”Joyce said he tells his clients to stay focused on long term financial planning, investing and diversifying as if there were no cliff.”Just focus on your goals,” he said. “You can’t control any of this, but you can control your financial plan.”Lynn Area Chamber of Commerce President Ralph Sevinor, owner and operator of Wayne Alarms, said he believes people most fear inconsistency. Discussion and debate on the fiscal cliff is up and down, which he believes is making people nervous.”So they’re really holding back ? they don’t want to invest,” he said. “I’m not worried. My nose is to the grindstone, I’m doing what I do.”Sevinor said people need to keep moving forward and snap out of what he called a state of malaise because “time is our most precious commodity, it’s the one thing we can’t get back.”And finally, he echoed Mayor Kennedy’s and financial planner Joyce’s frustration with the politics at play in this whole scenario.”Frankly I hope all the politicians stay home on vacation permanently,” Sevinor said.Chris Stevens can be reached at [email protected]. Amber Parcher can be reached at [email protected].