Mayor Budget Presentation 4/18/2012

May, 2011
Message from Mayor David Narkewicz

I am pleased to submit this Fiscal Year 2012 budget proposal to the honorable members of the City Council for your consideration and approval in accordance with Chapter 44 Section 32 of the Massachusetts General Laws. The Fiscal Year Budget totals to $93,507,216; the General Fund total is $77,331,914; the Water Enterprise Fund total is $ 7,111,376; the Sewer Enterprise Fund total is $5,580,378 and the Solid Waste Enterprise Fund total is $3,483,548.

This is my 12th and final budget as the Mayor of the City of Northampton, and one of only two which did not contain dramatic cuts to programs or staff. I have served during the terms of four governors and three presidents. A gallon of gas cost $1.26 in June of 2000; it costs $3.96 today. The economy went from the Dot-Com bubble to the post 9/11 recession and stock market decline, to the sub-prime mortgage crisis, corporate bailouts, and to the current stagnant economy. The country went from a peacetime economy to fighting wars on two fronts, without raising taxes to pay the costs. Healthcare grew from a manageable budget item for businesses and government to a national crisis. Global warming was an interesting scientific debate in 2000; it is now a compelling reality that calls us urgently to review how we live our lives and plan for the future. Cities and towns have tried to manage the provision of basic services to people during a time of decreased assistance from the state and federal governments, and increased suspicion of government on all levels.

In my first budget, the Commonwealth contributed 28.6% of the cost of running our local government; they now contribute 20.7%. In actual dollars, the amount of total Local Aid the City received in 2001 is only $214,017 less than we will receive this year. This aid amount includes School Building Assistance payments for both JFK and the Northampton High School. If the SBA amount is deducted our actual operational local Aid is $86,000 less this year than the amount we received for FY 2001.

Back in FY2001, Local taxes contributed 50.8% of the city’s revenues; this year the local tax share will be 61%. Local tax collections have increased, on average, 3½% per year. This includes the allowable 2½% increase and median new growth of $670,000 per year. It also reflects the two million dollar override passed for Fiscal Year 2010 and the introduction of the local option meals tax, which has provided the City with close to one million dollars over the first two years since its passage. Despite the city budget’s increased reliance on taxes as a share of its total revenue, Northampton’s average single family tax bills continue to rank in the 50th to 55th percentile of property tax bills statewide, as do our water and sewer rates.
Our municipal budgets have grown on average 2.5% per year over the last 12 years. At the same time, certain costs have risen dramatically. The most difficult to manage has been the cost of benefits. During the same period, health insurance and pension costs have gone up on average 6.5% per year.

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