Extremely big week coming up. By this Friday, most if not all the preliminary numbers should be out from the state. The Governor's budget is due Wednesday. If we don't get the actual breakdown of the components of the total projected amount that day, the first version of the Cherry Sheet should follow very shortly thereafter. Net School Spending should follow shortly after the Gov's stuff too.
It is very big stuff in the scheme of the budget process, which is a process that seemingly year in and year out is completely misunderstood, twisted and at times inexplicably many seem to manage to follow many different paths.
Yet the explanation is all that hard if you give a little thought to it.
We all have budgets we have to live with. Certain bills that have to be paid. Certain things we need. Certain things we want.
Yet in one household there will be different priorities than in another. You may look at what someone else does and shake your head. Odds are they are doing the same thing about you.
If there were a universal consensus on what should be priority spending, life would certainly be easy. If there was a universal consensus on what constituted the next level, preferable spending, life would be down right easy and laid back in forming a budget.
Some communities have a formula. Certain segments of the budget receive a fixed percentage, year in and year out.. There is a method to that madness. A bit attractive as far as the easy and comfortable factor.
In some ways we are not too far off from it either.
Several aspects right now are determined independently from other budgets. Water and sewer run on enterprises. With the adjustments last year, and the ones this year, the issue on the spending there is limited to simple concepts. Are the proposals doable within the existing rate structure? If not, do you want to raise the rates?
NOTE: I have no clue at this point about the answers. This is not, I repeat not, any hint, suggestion or advance warning about such a thing happening. It is simply an example of budget aspects in general.
Another such example, the schools. Included being Fairhaven's school department, Voc Tech and Bristol Aggie. The last two, pretty simple going forward. Voc Tech if it stays at net school spending is easy. Here is your bill, pay it. Bristol Aggie, ditto.
Town schools, well that one always sets off the debate of how much over we are, how some schools do it at net school spending, how some don't, we spend too much or we don't spend enough. The debate on that is going to be framed around the figures to be released this week.
How much we will be over net school spending will be directly determined by estimated and actual figures relative associated town costs charged to the schools, school tuition received, state aid to be received and foundation budget established by the state.
In the not so recent past we have heard amounts as high as $2.6 million. Using the only figures that matter, being those from the state, FY 2013 compliance was at $1,050,000.00 plus or minus a few bucks. FY 2014 estimated compliance (remember only estimated cause be are still in it, the FY that is) has us at $586,000.00, plus or minus a few of those bucks.
FY 2015 will be well anyone's guess at this point. Throw in factors like property valuation, population income, population size, in addition to above, along with an actual formula that no one person seems to have the ability to explain at any level, and again the wild card that is the unknown state aid, and who the heck knows.
What is known is the trend is moving downward, and has been.
The point of the exercise, i.e. we are getting to to the point where in the not too distant future, the only decision you are going to face about the school budget is whether to give it more than the required minimum. We will no longer have to argue about whether we should or need to get to net school spending. We will be there.
This year? Probably not. But we are getting there. There is no escaping that. When we do hit i (being point two of the exercise), where does that leave us under article 4?
All three schools become untouchable. Health Insurance untouchable. FICA untouchable. Retirement untouchable. Debt untouchable. Veterans' all most entirely untouchable. Library untouchable. Throw out the enterprise fund money (water, sewer, rec.), through out the money from dedicated sources for dedicated purposes. Money that cannot be used for anything but specific purposes, you add all that up with the untouchables.
Roughly what do you have left when we hit that version of the wall. If you are lucky, and I mean extremely lucky using the FY 14 budget as a guide, you have about $12 or $13 million dollars of expenditures you will have to tweak, cut, eliminate going forward to cover the increases for those general fund expenditures you can't tweak, cut or eliminate.
Think I am nuts? If you assume we reach net school spending. If you assume the operation budget is $47,000,000.00. Subtract the roughly $21,000,000 for the three schools; the $4.5 for health insurance; $800k for general insurance; $580K for the library; $800K for veterans; $3.8 million for water and sewer departments; the $3.3 million for debt; the $2.5 million for retirement; $320 k for FICA. This are a bit rough but close enough for the exercise.
We will at some point in three years or less be there, at net school spending and at present trends. When we hit it, well it will be what it will be. One of the things that will be is all of those items in the above paragraph have to be done. Granted some are done with other than G.F. money. The bulk are not however. All of the g.f. stuff will be going up year in an year out even funded at minimum levels. All of them are required spending.
The third point of this exercise. Even though your operation article 4 for FY 14 was over $47,000,000.00 (nearly $48 million to be honest), you DO NOT have $47 or $48 million dollars of expenditures you can make cuts from.
Unfortunately, I probably have not been as inclusive in the stuff you can't cut either.
That unfortunately seems absolutely a fact that no one wants to factor into there own little worlds.
I am out of time for today.
Be safe.
Yet the explanation is all that hard if you give a little thought to it.
We all have budgets we have to live with. Certain bills that have to be paid. Certain things we need. Certain things we want.
Yet in one household there will be different priorities than in another. You may look at what someone else does and shake your head. Odds are they are doing the same thing about you.
If there were a universal consensus on what should be priority spending, life would certainly be easy. If there was a universal consensus on what constituted the next level, preferable spending, life would be down right easy and laid back in forming a budget.
Some communities have a formula. Certain segments of the budget receive a fixed percentage, year in and year out.. There is a method to that madness. A bit attractive as far as the easy and comfortable factor.
In some ways we are not too far off from it either.
Several aspects right now are determined independently from other budgets. Water and sewer run on enterprises. With the adjustments last year, and the ones this year, the issue on the spending there is limited to simple concepts. Are the proposals doable within the existing rate structure? If not, do you want to raise the rates?
NOTE: I have no clue at this point about the answers. This is not, I repeat not, any hint, suggestion or advance warning about such a thing happening. It is simply an example of budget aspects in general.
Another such example, the schools. Included being Fairhaven's school department, Voc Tech and Bristol Aggie. The last two, pretty simple going forward. Voc Tech if it stays at net school spending is easy. Here is your bill, pay it. Bristol Aggie, ditto.
Town schools, well that one always sets off the debate of how much over we are, how some schools do it at net school spending, how some don't, we spend too much or we don't spend enough. The debate on that is going to be framed around the figures to be released this week.
How much we will be over net school spending will be directly determined by estimated and actual figures relative associated town costs charged to the schools, school tuition received, state aid to be received and foundation budget established by the state.
In the not so recent past we have heard amounts as high as $2.6 million. Using the only figures that matter, being those from the state, FY 2013 compliance was at $1,050,000.00 plus or minus a few bucks. FY 2014 estimated compliance (remember only estimated cause be are still in it, the FY that is) has us at $586,000.00, plus or minus a few of those bucks.
FY 2015 will be well anyone's guess at this point. Throw in factors like property valuation, population income, population size, in addition to above, along with an actual formula that no one person seems to have the ability to explain at any level, and again the wild card that is the unknown state aid, and who the heck knows.
What is known is the trend is moving downward, and has been.
The point of the exercise, i.e. we are getting to to the point where in the not too distant future, the only decision you are going to face about the school budget is whether to give it more than the required minimum. We will no longer have to argue about whether we should or need to get to net school spending. We will be there.
This year? Probably not. But we are getting there. There is no escaping that. When we do hit i (being point two of the exercise), where does that leave us under article 4?
All three schools become untouchable. Health Insurance untouchable. FICA untouchable. Retirement untouchable. Debt untouchable. Veterans' all most entirely untouchable. Library untouchable. Throw out the enterprise fund money (water, sewer, rec.), through out the money from dedicated sources for dedicated purposes. Money that cannot be used for anything but specific purposes, you add all that up with the untouchables.
Roughly what do you have left when we hit that version of the wall. If you are lucky, and I mean extremely lucky using the FY 14 budget as a guide, you have about $12 or $13 million dollars of expenditures you will have to tweak, cut, eliminate going forward to cover the increases for those general fund expenditures you can't tweak, cut or eliminate.
Think I am nuts? If you assume we reach net school spending. If you assume the operation budget is $47,000,000.00. Subtract the roughly $21,000,000 for the three schools; the $4.5 for health insurance; $800k for general insurance; $580K for the library; $800K for veterans; $3.8 million for water and sewer departments; the $3.3 million for debt; the $2.5 million for retirement; $320 k for FICA. This are a bit rough but close enough for the exercise.
We will at some point in three years or less be there, at net school spending and at present trends. When we hit it, well it will be what it will be. One of the things that will be is all of those items in the above paragraph have to be done. Granted some are done with other than G.F. money. The bulk are not however. All of the g.f. stuff will be going up year in an year out even funded at minimum levels. All of them are required spending.
The third point of this exercise. Even though your operation article 4 for FY 14 was over $47,000,000.00 (nearly $48 million to be honest), you DO NOT have $47 or $48 million dollars of expenditures you can make cuts from.
Unfortunately, I probably have not been as inclusive in the stuff you can't cut either.
That unfortunately seems absolutely a fact that no one wants to factor into there own little worlds.
I am out of time for today.
Be safe.
It's very plausible that the day will come when the town will not have the money to pay it's bills. We'll just have to increase our revenues? The economy is turning around? I don't see it. I really don't. Some of the homeless we read about might well be lazy and irresponsible- spending their income on nonessentials, instead of the mortgage or rent. But what about the people who have tried to live fiscally responsible lives? How many of them can say they're still able to deposit into their savings the same percentage of their salary as they did 5 or 10 years ago? Unless something drastically changes in the government's economic policies, no 'belt tightening' measures will sustain us.
ReplyDeleteRetirement untouchable ,and they assume a 8% return.In what world is that possible,we get 1/4% on savings,2 % on CDs, maybe someone should look at this return.
ReplyDelete