Budget gaps threatening communities

LYNN – A taxpayer oversight group warned cities and towns face “a long-term budget squeeze” threatening to overtake efforts by municipal budget makers in Lynn, Marblehead and other communities to balance property tax money with careful spending on health care, pensions and debt.?Virtually no city and town is out of the woods,” cautioned Massachusetts Taxpayers Foundation President Michael Widmer.The Boston-based group released a report Tuesday concluding that city and town costs, like public employee pensions, health care costs and debt service on building projects and other expenses, are eating up local budgets as money generated by property taxes is growing at a relatively slow rate.?The basic conclusion is that pensions, health care and debt are growing at a much greater rate than revenues: They are consuming more and more of budgets,” Widmer said.Lynn Acting Chief Financial Officer Peter Caron and Marblehead Town Administrator Jeff Chelgren said it is too early to sound the alarm over city and town spending gaps – at least in their communities.?We?ve exercised great control over those costs – when they?re more predictable, we can work them into budgets,” Chelgren said.He said town health care costs increase about six percent annually and Caron said health care costs were reduced in Lynn three years ago when city officials and public employee unions sat down to tackle rising health-care costs.Caron also said Lynn is also on track to reducing the city?s $7.2 million debt costs to $7 million. Caron said city spending experts are able to remove some debt costs from city ledgers even as new borrowing costs associated with building schools and other projects are added to the debt load.?If anything, in the next four or five years, our debt is going down,” Caron said.Still, the foundation warned that funds cities and towns generate from property taxes are not increasing at a fast enough rate to keep up with retirement and health-care costs. Widmer said the state Legislature needs to consider reforms aimed at slowing this cost growth.Chelgren said Marblehead is setting aside money to help pay for “problematic” costs associated with benefits paid to current municipal employees as well as retirees.?We have what we think are tight controls,” he said.