July 20, 2013

Finance committee discusses State cuts By Leah Hoenen

State budget cuts are leaving Windham officials pondering how to deal with cuts to the town’s portion of revenue sharing.

Windham will receive $300,000 less in revenue sharing from the State, said town manager Tony Plante. Because the financial committee and town council budgeted in anticipation of losing some state revenue, the actual hit to the budget for this fiscal year will be $140,000, he said.

There are further reductions on the way for fiscal year 2014-2015, when the town expects to receive $75,000 less in revenue sharing and $25,000 less in road assistance, said Plante. Revenue sharing is a significant source of funding for the town, providing just more than $1 million last fiscal year, said Plante.
Now, town officials need to examine the numbers and decide whether to deal with the reductions all at once or over two years and consider whether the reductions are temporary or a permanent condition, he said.
Because the budget has already been approved, Windham can choose whether to rely on additional revenue to make up the shortfalls or reduce spending, in which case the town needs to decide what that would effect, said Plante.

When the town’s finance committee met Monday, July 15 to discuss the issue, Plante told committee members the town could decide to curtail spending. He said the town currently has three vacant positions and could delay filling them as one possible measure.

With this fiscal year’s budget already approved, the town portion of the tax levy cannot be increased, Plante said. “The alternative is hoping other revenue comes in higher than we expected and makes up the difference,” he said, noting that that could be a risky strategy. For now, the town could choose to defer expenses and decide later where to make cuts, if the council wanted to reduce spending to make up for the $140,000 reduction, said Plante.

If the reductions appear to be a short-term issue, the town could elect to defer a certain capital investment, but if fewer revenue sharing dollars are the norm, Windham would be better off considering changes to the level of programs and services it provides, said Plante.

Finance committee member Matt Noel said, he feels the reduced revenue sharing funds will be a long-term issue. “I don’t think it will go back to what it was,” he said.

Committee member Kevin Call said the town did well planning for some reductions in state sharing, but now needs to consider the long-term picture.

The committee discussed the town’s budgetary history and its trend of spending less than budgeted. Call said, “Knowing our history and keeping this in mind, I think we’re going to be fine, but long term, we have to plan for it.”

Committee members agreed the town could defer planned work to Falmouth Road as a way to curtail spending this year.

Prior to the committee meeting, Plante said, “The number is not so big that we’re looking at a wholesale elimination of programs and services. Some depends on the judgment of the financial committee and town council.”

“It’s better than what the governor proposed, but to call it good would be an exaggeration, in my opinion,” Plante said of the budget passed by the legislature.

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