LYNN — Mayor Thomas M. McGee has proposed a $375.4 million fiscal year 2021 budget that includes cuts for every city department, but no reduction in the current workforce.
The mayor’s proposed budget, which represents a 1.5 percent increase over last year’s spending, has been submitted to the City Council. The panel will hold a public hearing on the budget at their July 14 meeting.
The projected budget for the Lynn Public Schools is $165.8 million.
“The COVID-19 pandemic we have endured over the past four months has triggered an unforeseeable financial crisis nationwide, including here in the city of Lynn,” McGee wrote in a letter to the City Council.
“With economic activity all but grinding to a halt, usual local revenue-generating operations and revenue streams significantly curtailed, as well as an expected substantial reduction in state aid from the Commonwealth, we are forced to make difficult, yet necessary decisions to present this balanced budget to you.”
McGee said the budget was compiled without a firm sense of what the city would receive in state aid. Without final numbers, Chief Financial Officer Michael Bertino assembled the FY21 budget using conservative state aid projections.
Bertino budgeted a slight uptick, or a $5 million increase, in Chapter 70 funding, the major program of state aid to public schools, and a 10 percent decrease in unrestricted general government aid.
“To date, there has been no agreement at the federal level about providing financial support to help municipalities offset losses that resulted from COVID-19,” said McGee. “Therefore, we cannot plan on those dollars for assistance and have made significant adjustments to our spending in order to balance our budget. Each department is sharing in the sacrifice to confront this dramatic, unexpected loss of revenue.”
Real estate and personal property taxes have increased to $141.5 million, or by 2.5 percent over last year’s amount. But revenue from local receipts, such as motor vehicle excise, meal taxes, building permits and departmental fees is down $2.7 million from FY20 due to the “current and future state of the economy,” Bertino said, citing the required business closures.
The budget includes cuts in every city department, such as not filling open positions and a continued hiring freeze, Bertino said. But McGee noted that there have not been any layoffs, or reduction in the city’s current workforce throughout the pandemic.
In addition, the budget was balanced by including a recommended $2 million transfer from the city’s free cash account, which will reduce that fund to $6.9 million, assuming all pending requests are approved, Bertino said.
The mayor’s recommended budget represents a drastically different scenario than what the city was anticipating in January. That month, Gov. Charlie Baker released his FY21 state budget, which included a significant increase in state aid for Lynn.
But since the outbreak, Bertino said the city has not received any new information regarding state aid, other than being told that the state anticipates a $4-6 billion loss of revenue for FY21.
“A once promising budget forecast for FY2021 quickly required a new strategy,” said Bertino, noting that all unnecessary spending for the remainder of FY20 was eliminated and department heads were asked to reduce their initial budget proposals.
“The combined unforeseeable financial result of the COVID-19 crisis for the city of Lynn’s budget to date was a projected deficit of $7 million,” said Bertino. “With all of this uncertainty, the best option for the city was to provide an annual budget based on a conservative approach to revenue forecasting.”
McGee added that the “document is a reflection of difficult fiscal decisions during an unprecedented time of crisis in our city, Commonwealth and country. I am proud of the responsible, thoughtful and prudent use of taxpayer dollars presented to you today.
“If history has shown us anything, it is that economic recovery often occurs over a prolonged period. It is my hope, however, that the diligent groundwork laid over the past two years will allow us to overcome this difficult time sooner than later,” McGee said.