January 22, 2009
Nashua Telegraph
Nashua Mayor Donnalee Lozeau wants department heads to keep increases in spending to no more than 1 percent in the next city budget.
What can she do for an encore? That’s one of the major questions facing Nashua Mayor Donnalee Lozeau this year as she turns her attention to the preparation of a city budget for fiscal year 2009-10.
Last year, her first as the city’s mayor, Lozeau submitted a municipal budget of $228.9 million – up about 3 percent from the previous year’s budget – that was trimmed $1.68 million by the board of aldermen prior to its adoption.
The end result was a tax hike of less than 1 percent last fall, which meant the owner of a home assessed at $250,000 is paying only $37.50 more than the previous year.
While that didn’t satisfy the segment of the community looking for a tax cut in these difficult financial times, it did represent the smallest city tax increase in 10 years.
Building on that achievement, the mayor has raised the bar by asking her department heads to submit budgets containing no more than a 1 percent increase in spending.
All the while trying to maintain the level of services to which city residents are accustomed.
“I’m hoping that 1 percent will allow us to maintain city services,” she said.
That’s going to be difficult to achieve without either laying off city workers or cutting back on city services. While we applaud her for her goal, we are having difficulty understanding how this is mathematically possible without:
• The laying off of city workers.
• The elimination of some city services.
• The discovery of some major efficiencies in the operation of city government.
• Or the infusion of some outside city, state or federal money.
Given the state of the national economy, we would suspect one or more of these options may become necessary this year.
As we all know, salaries and benefits make up the bulk of municipal budgets, and the city of Nashua is no exception. Based on the budget approved last year, the $162.1 million paid out to the equivalent of 2,456 full-time positions represented 71 percent of the city’s total budget.
Hypothetically, then, if each of those workers received a modest 2 percent increase next year – and keep in mind city teachers are expected to get between 6 percent and 7 percent raises when you add salary and step increases – that alone would bust the 1 percent target.
All of which is going to put a lot of pressure on city department heads to come up with more efficient ways of conducting business, including the police, fire and public works departments.
But nowhere is the challenge expected to be greater than for outgoing Superintendent Christopher Hottel and the board of education.
Last year, the school department sought and received a 6 percent spending increase from the board of aldermen, which translated into an additional $4.8 million in spending from the previous year.
Based on that $86 million budget, a 1 percent increase would mean an additional $860,000 in spending for next year – a small fraction of what school administrators had available for the current year.
We shouldn’t have to wait too much longer to get a better idea of how this all might play out.
Next month, the mayor will begin meeting with department heads to review their spending requests in anticipation of compiling and submitting her budget proposal to the aldermen this spring.
Perhaps we will know more by the time she delivers her State of the City address to the aldermen on Feb. 17 and to the Greater Nashua Chamber of Commerce the next morning.
Barring any major surprises, we’re thinking both will be rather somber affairs.