To help explain why the town is experiencing financial strain, it is important to note that we are limited by Proposition 2 1/2 to increase tax revenue by no more than 2 1/2%, plus new growth, which accounts for about 60% of our revenue. The other 40% comes from federal, state, and local revenues, plus our investments. Our local revenues have been either level or decreased for the past 5 years. At the same time, many of our town's operating expenses are increasing at a much greater rate.
Some examples of operating expenses which have increased beyond our revenues include health insurance, which accounts for 10% of our total town operating budget, where expenses have averaged 15% annual increases, which includes the 0% we received on 11/1/11. These increases include adding previously unenrolled employees to our plan when they choose to become members (about 67% of our employees subscribe to our plan). In Fiscal Year 2011, 75 existing employees became new members on our town's health plan. Our health insurance also covers retirees, so every time an employee retires and is replaced, that increases enrollment.
Middlesex retirement assessments have risen from $2,312,418 in FY08 to $3,168,000 in FY13, which represents a 7.4% increase each year. Gasoline for our town vehicles was $266,705 in FY09, and in FY12 it rose to $304,085, representing a 4.7% annual increase. State aid has remained basically level since FY10 when it was $17,315,949 to FY13 when it is $17,650,236.
Investment income has dropped significantly. We earned our peak amount on our investments in FY07 with $846,064 in revenue. In FY13 we have budgeted our investment income at $66,625 or about 8% of FY07's income.
Motor vehicle excise has decreased since FY06 from $3,006,704 to a projected $2,859,287 for FY13. New growth and local revenues are heavily tied to construction, so when the economy slows down, so do those sources of revenues. For the past several years we have found ways to control expenses and reduce department budgets where possible to absorb these costs, but as we are a service operation, most of our expenses are personal services (salaries).
The bottom line is our town’s operating expenses are increasing at a greater rate than our revenues. Many of our residents who are on fixed incomes, or have not received salary increases in their own positions are experiencing the same thing. For the past four years we have worked tirelessly to reduce and/or control town expenses to not be forced to layoff employees and reduce services for our residents. In Fiscal Year 2014, at this point, it appears that this will no longer be possible.
Town of Westford
55 Main Street
Westford, MA 01886