March 26, 2013 –Boston, MA– Mayor Domenic J. Sarno traveled to Boston today with members of his Finance Team; Acting Chief Administrative and Financial Officer TJ Plante and Acting Budget Director Jennifer Winkler, in support of Senate Bill 1311 “An Act Relative to Local Assessments”. Senate Bill 1311 is sponsored by State Senator Gale Candaras and State Senator James Welch and is vital to the City’s abilities to raise new revenue, maintain core services and to reap the economic benefits of a potential casino in Springfield.
The City of Springfield has faced a series of manmade and natural disasters over the past several years including the foreclosure crisis that did not spare any neighborhood. The issues left in the wake of the foreclosure crisis, which the City continues to grapple with, was only worsened by a series of disasters that could have never been predicted, including; the June 2011 tornado, October 2011 Snow Storm, Hurricane Irene, Hurricane Sandy, a gas explosion in our downtown and a February 2013 blizzard.
Mayor Domenic J. Sarno stated “through all of this, the City has had to not only manage our response and rebuilding efforts but maintain as much consistency and normalcy to the programs and services that our residents depend on every day”. The City of Springfield has instituted several measures to keep a balanced budget, which include:
• Making use of every tool that the State has offered through municipal relief efforts which include; utilizing the GIC for health insurance, adopting the local option meals and hotel tax, the extension of our pension schedule to 2039 and maximizing changes to procurement rules.
• The City has cut costs in the last 2 years by: eliminating 190 positions through a combination of vacancies and layoffs, instituting furloughs, no pay increases, the closure of a fire company, reduced library hours, the elimination of the CitiStat department and discontinued maintenance of ten City parks.
• Additional revenue has been generated from an increase in the trash fee, as well as adjustments to departmentally generated fees such as; dog licenses, building permit fees and animal adoption fees.
• Reserves have been utilized to maintain core services in the amount of $15 million in each of the last two years.
• Since I took over as Mayor in 2008, I have cut the budget for 6 years in a row. I had 1,589 FTEs on the City Side when I became Mayor in 2008. I now have about 1,200 of which 60% are front line public safety employees such as Police and Fire.
Mayor Sarno went on to say “In other words, we have not and do not take the fiscal stability of the City lightly. We will continue to implement every measure necessary to maintain a responsible and balanced budget. However, the prospects for the next several years continue to be formidable, we are cutting past the bone and into the marrow of our core services, which in the end will only intensify our decline in property values if we do not take action now.
A chart included in Mayor Domenic J. Sarno’s testimony illustrates the lost revenue which is due to the constraints of proposition 2 ½. The levy ceiling is the number which equals 2.5% of the total taxable value in the community. The levy ceiling places a hard cap on the amount of the tax levy, which is the total amount of taxes billed by the community. This cap relates solely to the total taxable value. In a stagnant or sluggish real estate market, the ceiling can prevent a community from realizing any net gain to the tax levy from new development, as well as suffer levy declines on the existing base. The law has prevented Springfield from realizing any overall tax levy gain from “new growth” for the last three years. This lost levy totals $13.8 million. The levy declines on the existing base have been another $16.5 million. The total lost levy is $30.3 million. Mayor Sarno added ”looking ahead, if we do nothing, over $76 million in revenue could go unrealized.”
Meanwhile, the Massachusetts State Legislature and Governor Deval Patrick has provided for a potentially huge economic driver in the City of Springfield in the form of a billion dollar casino, the benefits of which would be a few years away. However, the benefits are even further away due to the constraints of proposition 2 ½.
As Mayor Sarno indicated before the Joint Committee on Revenue “other communities are just starting to approach their levy ceiling, so although we are the first, we will not be the last to experience this constraint that I suspect the crafters of Prop 2 ½ could have never predicted.“
In closing, Mayor Sarno stated “this needs your immediate attention to ensure that your intentions in passing the casino legislation are met as soon as they can be and to allow for Springfield to capture much needed revenue, not to expand services but to maintain the core that we have. On behalf of the City of Springfield “Thank you” for your continued efforts and we appreciate the fiscal challenges that all governments continue to face”.
Please see the attachments provided below.
An Act Relative to Local Assessments SECTION 1. Section 21C of Chapter 59 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by inserting, the following as paragraph (o):- The local appropriating authority may, by accepting this paragraph, provide that taxes may thereafter, be assessed in excess of the amount otherwise allowed by this section, provided that the increased tax amount is related solely to the assessed value of any parcel which is subject to a gaming license issued pursuant to Chapter 23K,multiplied by the tax rate for the preceding fiscal year.