BRUNSWICK — The Town Council on Monday got a preview of what officials are promising will be especially difficult budget deliberations.
Monday’s workshop featured presentations by interim Town Manger Gary Brown and Finance Director John Eldridge, who warned that revenue losses proposed in Gov. John Baldacci’s biennial spending plan would present significant hurdles when the council discusses its own budget.
Brown and Eldridge projected a 2 percent increase in the upcoming budget just to make up for potential revenue losses, both in motor vehicle excise tax collections and a proposed 10 percent decrease in revenue sharing.
The 2 percent increase does not include the potential loss of an annual allocation of $600,000 from the U.S. Navy to provide municipal services to Brunswick Naval Air Station housing. That subsidy is expected to disappear in November. However, the town is negotiating an extension, given that some of that housing could soon be privately owned and occupied.
The 2 percent increase also excludes spending commitments in the town’s Capital Improvement Program, including allocations for the Maine Street Station project and ownership of the former Times Record building.
All told, Brown said, the council is looking at between a 4 percent to 5 percent increase just to maintain the status quo.
“It’s obviously going to be a challenging year,” Eldridge said. “I know we say that every year, but this is the first time we’re looking at significant revenue decreases. … As challenging as (other budgets) have been, this could be our toughest.”
Hovering above the grim forecast is the 2011 closure of Brunswick Naval Air Station, which will result in sharp decline in population. Eldridge said that BNAS closure could make the current economic recession “longer and deeper” for Brunswick.
Ironically, School Superintendent Paul Perzanoski said, the exodus of BNAS students could help the department achieve flat-funding goals while avoiding staff and teacher layoffs.
Perzanoski said he hopes the district’s loss of military students, plus his recommendation to close Hawthorne Elementary School after this year, will dovetail with the district’s projected staff-teacher attrition rate to preempt job losses.
Perzanoski said the district’s typical annual attrition rate is 23 employees, while the number of positions he must eliminate to prevent layoffs is “a lot less than that.”
“In a strange way the base closing is actually helping us,” he said.
Both Perzanoski and Eldridge said the coming budget year will be challenging, but predicted the ones to follow would be even more problematic.
Complicating matters, Brown said, is a citizen initiative calling for a 50 percent reduction in the state’s motor vehicle excise tax. Eldridge said excise collections account for 13 percent of Brunswick’s non-property tax revenues. Halving the excise tax, Eldridge said, would result in a $1.5 million loss for Brunswick.
If the initiative is enacted, Eldridge said, it’s unclear if it would begin in the middle of 2009-2010 budget year.
“(The $1.5 million loss) is a huge number that can’t be made up in the middle of the year,” he said.
Brown said the town intends to have funds set aside in its fund balance to account for the possible shortfall.