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0pen Letter to the Medford Community on FY2021 Budget Projections
by Jackie Piques
Open Letter to the Medford Community on FY2021 Budget Projections
Breanna Lungo-Koehn, Mayor
The
impact that the COVID-19 pandemic has had on our city has been
devastating. Every one of us has felt that impact and we will continue
to feel it in some way for the foreseeable future. In Medford, we have
addressed the challenges presented by this unprecedented situation
head-on and have planned for short- and long-term impacts to the
community as best we can. As the current fiscal year comes to a close,
we are now forced to reconcile the drastically changing economic
situation with meeting the needs of our city and keeping a focus on our
long-term financial stability. What’s clear is that the situation is
dire. What’s not clear is the extent of the budget shortfall we’re up
against, and how the state and federal government will step up to aid
cities and towns in their time of need.
As
elected officials our job is to steer the community through these tough
times. We must protect services for the most vulnerable, steward the
education of our children, ensure public health and safety and provide
services more cost effectively, and do so without burdening future
generations. But we must be cautious; over-reliance on the City’s
reserves to solve short term problems can have long term effects on our
financial health. It’s a delicate balance, and it will require
sacrifices.
For
the current fiscal year, the City of Medford has taken assertive action
to protect and enhance our financial stability, including imposing a
nonessential hiring freeze and restricting any nonessential spending, as
well as identifying other opportunities for savings.
Looking
ahead to FY21, we’re crafting a budget that ensures efficiency of City
services and provides support to residents most in need without
jeopardizing the City’s long-term financial health. Through this process
I want to be as transparent as possible because the decisions we face
as leaders directly impact the communities we serve. So, we need to be
up front from the start: the way we solve these challenges and meet our
core community values will require sacrifice and difficult decisions.
Many of the goals we lay out, together, for the short term will be
delayed in the interest of maintaining critical services, particularly
as we await decisions from the federal government on local aid for our
communities.
We
rely on state aid to fund schools and general city services. In FY20,
state aid accounted for over $26 million, or 13% of our total operating
budget. As we work toward passing a municipal budget for the new fiscal
year we still have no direction from the state about just how much
sacrifice we should expect to make, but we must plan for the worse and
hope for the best.
The
state has postponed its budget deliberations, estimating a $4 - $6
billion deficit in receipts but not yet agreeing to a revenue target or
to local aid distributions, so cities and towns are left to estimate
what resources we can count on in the coming year. During the Great
Recession, local aid was cut by almost 25%. Assuming a similar scenario,
that would mean a nearly $6.5 million cut in Medford’s state aid for
FY21. On top of an anticipated $3 million decrease in local revenue from
lack of permit fees, and lower meals, excise and hotel taxes from the
current ban on non-essential services and the lingering effects of the
current crisis, we’re facing a potential budget shortfall of $8 million
if the state repeats its approach from the last recession.
We
are, for certain, facing tough choices. What is less certain is whether
the state and federal governments will step in to help. But we have yet
to see a dime of federal support. Smaller cities and towns like Medford
were not part of the three COVID-19 stimulus packages passed to date
and some Republican Senators have suggested that states should declare
bankruptcy instead of receiving federal support they could use to
support local education, public health and safety, and other city
services. In spite of this, I remain hopeful that the federal government
will provide meaningful aid to Medford to address critical gaps in our
school and city service budgets. Our community doesn’t deserve the lack
of leadership we’re getting from Washington and I will continue to fight
hard for what we need and deserve.
In
the face of these challenges, we are tightening our belts and gearing
up to do what’s necessary. As we stare at lower revenue and grapple with
the uncontrollable costs we know we must plan for, including fixed cost
increases for pensions, health insurance and debt service, we need to
put every idea on the table and conversations around furloughs and
layoffs will likely be a necessary part of our discussions. My goal is
to avoid having to take those steps by instead focusing on other
strategies to cut costs. We will do so collaboratively, with union
leaders, elected officials, parent teacher organizations, business
owners and local residents, but we will not avoid our responsibility to
be transparent, data-driven and realistic, even if it hurts.
Our
current situation is anything but traditional, and certainly not the
budget I thought I would be putting before the City Council in my first
months as mayor. Even as difficult as these challenges are, the
hardships Medford face are less severe than many communities, and I
expect that in the coming weeks local governments across Massachusetts
will also begin to grapple with to how to weather the financial impact
of the storm we are all in.
And
I know our City Councilors, School Committee members, and residents all
have great ideas for improving services, many of which require
additional resources. This is a year when we’ll need to say ‘not this
year’ to most of these good ideas. When I do so, please know that I
understand how painful some of these decisions will be. While being
frugal, I believe we should still try to focus on some areas where we
can adjust our approach to services which may require cuts in some areas
and new investments in others.
I
know that no matter how great the challenge, Medford is tough and we’ll
find our way through darkness and to better times together. I look
forward to working through our financial challenges with our local
leaders in the coming months and share this as an update of what may lie
ahead. During my campaign, I pledged to be transparent no matter what.
I plan to keep my promise.
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