New England News
12:30 pm
Tue April 10, 2012

Fee Hikes Proposed To Close Budget Gap

  Faced with a major decrease in property tax collections and no
expected increase in state aid, budget writers in Springfield
Massachusetts are proposing scores of fee hikes. But the city's top
finance officer says it still won't be  enough to avoid budget cuts.
WAMC's Pioneer Valley Bureau Chief Paul Tuthill reports..

        Fees for everything from a dog license to a building permit to
weekly trash collections would increase in Springfield under a plan
proposed by the city's finance division. The proposals presented to the
city council at a meeting Monday would raise nearly $3 million. But,
that would still not be enough to cover the projected deficit in the
next city budget, according to Springfield's Chief Administrative and
Finance Officer Lee Erdman.

        City budget writers project a deficit of more than $25  million
in the roughly half-billion dollar budget for the fiscal year that
starts in July. But they caution that the budget is still being written
and there are many variables including the amount of local aid to cities
and towns that will be included in the final state budget. Springfield
Mayor Domenic Sarno has written the governor and plans to meet with
legislative leaders to plead the city's case for an increase in
unrestricted local aid and other financial relief.

        Erdman said the city has warned its municipal unions that lay
offs are possible.

        Erdman is recommending city councilors approve increases of $29
per year for the next five years for residential trash collection to
eventually make the city's solid waste disposal and recycling program
financially self sufficient. The trash fee is currently $75 per
household. But the administration also proposed 2 other options for
smaller annual increases in the un-popular fee.

        Springfield City Council President James Ferrera said council
committees will hold public hearings to review the administration's
proposals.

        Because of plunging property values assessors are projecting a
$7 million drop in property tax collections. Finance officials told
councilors that the city's cash reserves would be used to cover the
shortfall. The city has $37 million in reserves.

        City councilor Bud Williams said the city should dig deeper into
its cash reserves, or rainy day fund, before raising fees.

        City Councilor Timothy Rooke  believes budget savings could come
from, of all places, health insurance. Rooke is lobbying for the city to
solicit bids for health insurance rather than commit to three more years
in the state's GIC program.

        The Sarno administration is also proposing an increase in the
hotel-motel room tax from the current 4 percent local share to 6
percent. It would generate an estimated $400 thousand a year. The same
increase was proposed by the mayor in this year's budget, but it was not
approved by the city council.

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