SWAMPSCOTT — The closing of restaurants, entrepreneurs not applying for business permits, and general uncertainty regarding the COVID-19 pandemic has led town officials to anticipate a hit to its revenue this year.
Town Administrator Sean Fitzgerald and assistant Ron Mendes say the town seeks to reduce expenses by $641,218 — $381,000 coming out of schools’ expenses and $260,218 from other departments. Other proposed cost-cutting measures include: no raises for nonunion staff/department heads; a $50,000 reduction in Finance Committee reserve funds; a $70,000 cut in the snow and ice budget and a $54,000 decrease in employee benefits.
“We are in the middle of an economic crisis, and with soaring unemployment and the expectation among public health experts that a second wave of the virus could land in the fall, the Mass Taxpayers Foundation (estimated) that the state could collect $6 billion less than anticipated just a few months ago,” said Mendes.
“This is going to have an impact on Swampscott because we expect we will have less income from the state than we are accustomed to,” Mendes said.
Mendes said the town projects a 12 percent reduction in Chapter 70 aid compared to Gov. Charlie Baker’s original projections; a 15 percent reduction in unrestricted local aid compared to the governor’s original figures; and a 10 percent overall decrease in local receipts, including level excise tax revenue, a reduction of $48,000 in town rental income, 25 percent less in business permit revenue, and 75 percent reduction meals/rooms tax.
Restaurants being closed during the COVID-19 pandemic, and being likely limited in services they may offer when they reopen, will have an impact on town revenue, Mendes said.
Mendes said the town is recommending $600,000 be transferred from free cash and reserves, and $641,218 be cut from the town’s spending to cover costs. Swampscott currently has a free cash balance of about $3.4 million.
The adjusted budget for the town, given the revenue shortfalls, is looking to be $62,221,518. Of course, the budget has to be adopted by voters at the annual Town Meeting June 22.
