Leaders to examine cuts, fund balance as 2011 budget process begins
A report from the Town of Bethlehem comptroller’s office shows poor revenues could offset the town’s 2010 budget by more than half a million dollars, leaving the town’s leadership to find more cuts or dip into savings even as they consider next year’s finances.
The town had planned for 2010 to be a bad year, and anticipated using reserves to cover some expenses. But the midyear numbers show that gap between money coming in and going out might be even larger than expected.
That’s in no small part due to low sales tax returns. Assuming the trends from the first half of the year continue, the town will take in $425,000 less in sales taxes than anticipated. Combined with low fines collections, slumping parks and recreation revenues and poor returns on investments, the revenue column for the town’s general fund could be off by as much as $572,000.
These figures are estimates based on trends based on the first seven months of the year. When combined with the shortage that was originally budgeted, the general fund could finish the year nearly $1 million in the hole.
In what has become a common story, the numbers were attributed to an economy that still hasn’t turned around.
We depend on the economy [for revenue]. … The biggest item that we all focus on is the sales tax, said Comptroller Suzanne Traylor.
On the brighter side, expenditures have also been less than budgeted. In the general fund, the town is on track to spend nearly $375,000 less than planned. Without such cost-saving measures, the budget gap would be more dramatic.
`There’s a conscious effort, especially in the general fund, to look at every penny,` said Traylor.
In the town’s other three funds ` water, sewer and highway ` projections are somewhat more positive. The highway fund is expected to meet its budget, and while the water and sewer funds have seen decreased revenues, the deferral of some purchases should help them finish the year with surpluses.
Unfortunately, that money would not offset the shortfall already anticipated in the general fund, or the lackluster revenue estimates just in.
The new estimates came on the eve of the town entering into the 2011 budget process. The first departmental budget meetings with the Town Board occurred Monday and Tuesday evenings, after The Spotlight went to print, and the budget gap was likely to play a central role in those discussions and in future meetings.
`I have a feeling our workshops are going to be long into the night,` said Councilwoman Joann Dawson at a recent Town Board meeting. `I think we have to do some very serious analysis and start looking at that before we even start to look at next year.`
Taking the shortfall out of the general fund’s reserves would spend those savings down to very near 15 percent of the total fund, the level generally needed to maintain cash flow. With soaring health-care and retirement costs on tap for 2011, Town Board members were reticent to consider this.
`My thinking as we move into the budget process is we look very critically at moving any money out of the fund balance,` said Councilman Mark Hennessey.
`We also have to start thinking about policy decisions we might make for next year, this year,` said Councilman Kyle Kotary. `These numbers really concern me.`
Still, there was some solace to be found in the fact lower expenditures will hopefully keep the shortfall from being crippling.
`We’ve chipped away about half of that, and now we’re going to have to do some more,` said Supervisor Sam Messina. “
