While Gov. Deval L. Patrick has avoided cutting local aid to balance the current state budget, Berkshire County is still bracing for the reductions.
Local municipal officials, along with area legislators, began anticipating the cuts after state officials last month revised the projected revenue shortfall for fiscal 2010 from $400 million to $600 million.
Nevertheless, Patrick has yet to ask the Legislature for the power to make midyear cuts to budget, which he did twice last fiscal year as revenues plummeted.
"If we don't go beyond the $600 million estimate," said state Sen. Benjamin B. Downing, D-Pittsfield, "we could do without cuts to local aid."
However, Downing fears the state's deficit could worsen.
"We're starting to hold steady on revenue collections," he added. "But we're still seeing more job losses for [early next year] and that will mean less personal income tax revenue coming back to the state."
State Rep. William "Smitty" Pignatelli, D-Lenox, said the Patrick administration has waited long enough to address the declining tax collections.
"It's easier for cities and towns to accept a modest local aid cut in October," Pignatelli noted, "as a cut in March or April is deeper and harder to recover from."
In February, Patrick reduced local aid by $128 million forcing municipalities to cut their spending more than halfway through fiscal 2009.
Pittsfield had to trim $1
The city already took a $4.6 million cut when fiscal 2010 began on July 1.
Lee began the new budget year with a $230,000 local aid cut, but town officials are prepared for another mid-year reduction.
"We have enough flexibility in our budget to absorb another similar cut in 2010," said Town Administrator Robert Nason, referring to the $75,000 cut in February.
However, Nason fears the 2010 reduction could go as high as $125,000 based on his review of the state's projected revenue shortfall.
Lenox officials are unsure their budget can handle a local aid cut now, as the town already began fiscal 2010 with a $260,000 reduction.
"I've already asked department heads to be conscious about spending," said Town Manager Gregory Federspiel. "But their budgets are as lean as they can go."
If the trend of local aid cuts continues into fiscal 2011, local officials fear municipal layoffs are inevitable.
"We will have to significantly reduce our work force -- our major expense," Nason said.
Lenox is hoping to avoid town employee layoffs with their cooperation.
"If we can hold on and get concessions from the unions, we might be OK," said Federspiel.
In addition to budget cuts, several communities have taken advantage of raising the local rooms tax to help offset the loss of state funds. Pittsfield, Lenox and North Adams have increased the lodging fee from 4 percent to 6 percent. Lee and Great Barrington are also considering a boost in the hotel/motel tax.
However, Berkshire municipalities have ignored the newly created 0.75 percent local meals tax.
"I'm encouraging my communities to consider it," said Pignatelli. "It will help lessen the blow next year."
For example, the state Department of Revenue estimates Lee could collect $147,000 annually if it adopted the local meals fee.
To reach Dick Lindsay: rlindsay@berkshireeagle.com, or (413) 496-6233.
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