Projection: $6 million deficit looms if town's revenue does not increase

By Jaime Rebhan | Feb 29, 2012

A five-year projection of town finances filed with the Town Clerk's office shows that, based on predictions for revenue and spending, the Town of Wareham faces a more than $6 million deficit over the next five years.

Though only a prediction, the document, submitted by Town Administrator Mark Andrews' office, puts numbers on what town and elected officials have been struggling with in budget discussions: the lack of revenue to cover increasing fixed costs such as healthcare and the lack of funding for much-needed "capital" items, such as school buses and building repairs.

The projection, which uses modest increases in state funding in revenue predictions and conservative predictions of healthcare costs, paints a grim picture: expenses are increasing faster than revenue, and without economic growth or a Proposition 2 1/2 override, tax revenues won't keep Wareham above water.

An approximately $400,000 deficit is predicted in fiscal year 2014, which increases to about $1.2 million in 2015, nearly $2 million in 2016, and roughly $2.9 million in 2017 -- and that's without the town taking on any new debt, according to the document.

But the town's Capital Planning Committee, which plans for purchases of "big ticket" items such as vehicles and building repairs, has a five-year list of needed expenditures totaling more than $76 million. Of that, $4.8 million -- from school buses to police radios to a new ambulance -- is on the list for next year, fiscal year 2013.

Andrews ultimately decides what will go before voters in the form of an article at Town Meeting. That said, the five-year projection lists the following capital items for next year: the payment on the current lease of police cruisers and the acquisition of three new cruisers at a cost of $50,000.

Andrews has said in public meetings that he plans to use the town's revenue from the increased meals and hotel tax -- approved by Town Meeting in October -- to fund the capital items for next year. That, however, is only expected to bring in around $380,000.

The projection also earmarks $200,000 for the town's "stabilization" fund, used for emergencies, and funds for collective bargaining agreements, and an estimated 6% increase in the town's payment for Upper Cape Cod Regional Technical School.

All would have to be approved by Town Meeting voters in April.

Talk of a Proposition 2 1/2 override in order to increase tax revenues and ease Wareham's financial burden has been discussed in recent months as a way the town could fund the purchase of school buses to replace vehicles in the School Department's aging fleet.

If voters agree to an override, property taxes could be raised above the 2 1/2 percent annual cap on tax increase. A debt exclusion would also raise property taxes, but only for a predetermined number of years and only to complete a specific project, such as a school bus purchase. (A debt exclusion was previously used to fund the construction of Wareham Middle School.)

Overrides and debt exclusions, however, have been generally unpopular in Wareham. Such a tax increase would have to be approved by Town Meeting and in a town-wide vote.

The administration, School Committee, Finance Committee, and Capital Planning Committee are continuing to discuss how to proceed via public meetings.

Andrews did not respond to a request for comment.

Comments (4)
Posted by: mcquade2660 | Feb 29, 2012 15:41

If the people of the community want to keep the services that town provides for them like fire, safety and public education and many more.  Go for the 2 1/2 override and allow businesses like Wal Mart expand which generate income for the community via taxes -  don't allow them to come in - they will probably pack up and leave and then it will be more than 6 million for the deficit.

Posted by: frightened | Feb 29, 2012 19:44

If the Selectmen want a 2 1/2 override they must fire Andrews and hire a competent TA. I would vote for an override if I believed it would be properly managed. Andrews has been here long enough to stand up and take the blame for the mess he has put this town in.

Posted by: Zephyr | Feb 29, 2012 20:11

Frightened, It's not the Selectmen that want the override.  Have you been paying attention at all?

Posted by: seriously? | Mar 01, 2012 00:14

Frightened, I think it's the capital planning committee and school comittee who are asking for the override.  It's kind of confused.


who filed the 5 year projection with the town clerks office?  was it the planning committee or the TA?

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