AMHERST — Amherst officials are projecting a $3.6 to $7.7 million revenue shortfall to maintain existing services for the town, school and library operations next fiscal year, which begins July 1.
“It’s a broad range because there are so many unknowns,” Town Manager Paul Bockelman said during an overview of the situation presented to the Town Council, School Committee and trustees for the Jones Library this week.
Bockelman stressed that the estimates depend on the amount of aid the state provides and how much the Town Council is willing to use in reserve funds to support the budgets, as well as how quickly, or slowly, the economic recovery is from the COVID-19 pandemic.
Even in the best-case scenario, with an economic recovery in the first quarter, the deficit in the $85.44 million level-services budget for all municipal operations would be around $3.6 million. That number grows ever larger if state aid drops by 10 to 20 percent, and the economic recovery doesn’t begin until fiscal year 2022, which starts on July 1, 2021.
Bockelman said the plan remains for the town, schools and library to adopt one-month budgets that will carry their operations through this July. The schools and library will present their plans next week, while the Town Council will see the town’s one-month budget from Bockelman on June 1. The budgets for Aug. 1, 2020 through June 30, 2021 are due June 29.
In addition to tapping reserves, strategies that could be deployed to reach level funding for the next fiscal year, which would mean service cuts, include reducing the town’s contribution to its other post-employment benefits liability, which are retiree health benefits, and cutting the percentage of the budget dedicated to capital expenditures.
Comptroller Sonia Aldrich said the blow to state aid is compounded by about $2.3 million in projected losses to various town accounts.
That includes losing $642,000, or 65%, from licenses and permits, since fewer housing renovations and remodels are done during a down economy; the entire $552,000 from camp fees and golf course revenues; $525,000, or about three-quarters of the taxes, from lodging and meals; and $515,000, or 90% of the income provided by the University of Massachusetts and Amherst College.
Scott Merzbach can be reached at smerzbach@gazettenet.com.
