Kennedy warns of layoffs

LYNN – Mayor Judith Flanagan Kennedy warned “there will be tons of layoffs” with police officers and other city workers out of jobs if a disagreement with state education officials over local school spending cannot be resolved.For now, Kennedy is looking to the state Senate to craft a plan to adjust “net school spending” obligations for cities and towns including Lynn. State Education Commissioner Mitchell Chester warned local educators by letter in February that Lynn has fallen $8.6 million below its net spending requirement.If the shortfall is not addressed, Chester warned the city could face financial penalties and loss of state Chapter 70 money – a major public school funding source.Even with a legislative solution in the planning stages, Kennedy and city Chief Financial Officer Peter Caron said the city is taking steps to partly erase Lynn?s net spending obligation by preparing a $3 million laundry list of school repair projects.Kennedy told School Committee members the repair money will have to be borrowed through the city bond financing process, but Caron said the expenditures could come from the city?s $8 million free cash reserve.At the heart of the net spending problem, said Kennedy, is Lynn?s inability to count retired teachers? health care costs in the net spending calculation. City budget makers in 1994 opted not to include this calculation in the net spending equation. At the time, said Kennedy, health care costs were “a fraction” of the budget burden they now pose to cities and towns.?Now, healthcare is a significant part of my budget,” she told the School Committee Thursday night.Legislative plans for bailing the city out of its net spending fix include a proposal allowing Chester to phase in retirees? insurance costs as a contribution to net school spending over a four-year period.Another proposal offers a more straightforward solution to Lynn?s spending problem by proposing that “the (education) commissioner shall not include deficiencies in net school spending requirements ? when calculating state school aid distribution reductions.”?Even the Department of Education recognized it?s an unfair situation,” Caron said.Allowing the city to count retiree health care costs currently totaling $5 million will easily bring Lynn within its net spending obligation, Caron said. Kennedy, in lengthy remarks to School Committee members Thursday, called the net spending formula “a ridiculous system” that excludes many school building project costs and is based on “an unfair methodology.”?I?ve gone to the Legislature and said, ?You can?t keep punishing Lynn for this,?” she told the committee.