Amherst Center: Budget techniques

Published on January 30, 2009

Last week the town manager released his FY2010 budget for municipal services. But when he reviewed it with the Select Board (his boss), members raised some good questions. The questions weren't just about the cuts he made but about the "budget techniques" he used.

Back in October, the Finance Committee released its budget guidelines mandating a 2 percent budget increase cap. Mr. Shaffer's budget increases spending of town departments by 3.2 percent, then generates $400,000 in new revenue from the services provided by those departments, for a net increase of 2 percent.

Shaffer feels that his budget meets the 2 percent mandate, calling the 3.2 percent increase in real spending, which is offset by the revenue increases, "a budget technique." When asked about it by the Select Board at its recent meeting, he replied it was just "accounting."

On the one hand, we understand this. We applaud the town manager's efforts to generate revenue via increased fees for ambulance service and LSSE classes. And if a department can find revenues to keep it from making deeper cuts, that sounds good, right?

But our town is larger than just Shaffer's domain - it also includes the libraries, four elementary schools, and middle and high schools. In fact, about two-thirds of the town's budget is taken up by services outside of the domain of the town manager. Our town is one entity, providing a wide range of services to all Amherst residents.

The townwide question is, once again, what are our priorities? Looking across our whole Amherst budget, what areas should we protect from further cuts by applying new revenues, and what areas should we not? If each area does what Mr. Shaffer did, the decision is made for us, without any cross-budget prioritizing.

We cannot afford to have each town manager budget with only their departments in mind. For example, the planning department generates significant revenue via inspections, but it does not get to keep that revenue just for use in planning. Our ambulance receipts generate significant revenue, but they do not get to keep all of their revenue to use on just ambulance services. These revenues are spread across the priorities of all the town.

Mr. Shaffer's budget also makes creative use of enterprise funds to pay for some town employees. This is another good idea, but these new sources of revenue to cover costs previously on the municipal books should be allocated like any other revenue - to townwide priorities. It should also be recognized that this source of funding has not generally been available to school and library budgets, another argument for spreading the revenues around.

Mr. Shaffer has said, "I'm trying to provide practical options for the community to consider." In reality Mr. Shaffer has not given the community the option to decide which priorities should be funded with the $400,000 in revenues he has raised. Keeping spending to a true 2 percent increase as mandated by the Finance Committee gives the town "practical options."

If each department - town, schools, library - makes a list of all the cuts needed to get to the 2 percent level, and another list of all the revenue increases they can come up with, then budget-makers can talk about which cuts should be avoided, townwide. Allocating all the new revenue up front eliminates the town's options for this kind of prioritizing. We would much rather have seen the town manager come to the Budget Coordinating Group or Select Board and say, "Hey, I found a way to raise $400,000 in revenue, what are the town's priorities to use this money?"

In the end, slick accounting won't save us. It is the hard work of prioritizing which town services we will invest in. Amherst is a single entity. We derive revenue from many sources - property taxes, state aid, federal aid and fees. Where the law allows it, the revenue to the town needs to be seen as a single pot of cash that is then budgeted based on hard choices about what we value most.

Amherst Center is a monthly column that seeks to portray local issues from a centrist perspective. It is written by Town Meeting members Baer Tierkel and Clare Bertrand and School Committee member Andy Churchill. Amherst Center appears in The Amherst Bulletin on the last Friday of each month.