Without state aid city could go broke
By JOSH RESNEK
Through no fault of its own, the city could soon be unable to sustain itself as residents have grown used to, this, according to city administration officials.
With the new budget year arriving in June, tax revenues are down, timely payments in lieu of taxes coming from the Encore casino and hotel have not come in, and state aid to the city is in great question until the governor decides what the state will do to fill the coffers here and everywhere throughout the state.
The city’s financial team is scrambling to make sense of the new normal in the era of Coronavirus.
The pervasive question is not so much what the governor plans to do to replace revenue shortages, but what the Federal government does to replace the state shortages, if anything.
At the outset of the pandemic, the Administration was nearly complete with the FY21 Operating and Capital budgets. “Unfortunately, given the circumstances, those budgets are in the process of being revised to reflect the current economic situation that we are faced with. Tough decisions are ahead of us, but what we don’t know right now is exactly how tough.
“We cannot put together a responsible full year budget until we understand the full impact of COVID-19,” ad-ministration officials wrote to City Councilor at Large
Gerly Adrien – and her colleagues – in response to a lengthy set of questions Adrien raised to administration officials and other city officials on April 25.
Tax revenues are tanking.
With the Encore Hotel closed and the city’s other hotel properties empty of guests, room tax revenues have gone to zero. This alone would have put $3-$5 million in the city treasury in a normal year.
To aid local commercial and residential property owners in getting through the financial crisis, the city has announced a historic tax measure as well.
“The Administration has fully embraced delaying due dates for real estate and personal property taxes until June 1st. This makes these taxes due on June 29th. We have waived all interest and penalties for all excise and taxes through June 29th as well.”
The Administration told Adrien that the tax relief is needed for residents but creates financial challenges for the city.
“Compounding those challenges is what is happening at the federal level. The federal government has not shown any significant interest in providing funds to states to help them address revenue shortfalls,”the city answered Adrien.
“Massachusetts is looking at an estimated $4 to $7 billion revenue shortfall next year; until they get guidance from the Federal government, they cannot provide
Cities and Towns with any state aid guidance for next year.
With this being said, the Administration cannot put forth our budget until we better understand our revenue picture,” he city added in its response.
Budget shortfalls in the upcoming budget scenario could lead to everything being the same; everything changing slightly; or nearly everything about what the city provides being gutted. This includes the schools and city hall.
“Because of the uncertainties present, the Governor has allowed for Communities to move into FY21 with 1/12th budgets, which is an option that we are exploring,” the city admitted, according to Deputy Director for Communications and Intergovernmental Affairs Deanna Deveney, Esq. of the Office of the mayor.