7:09 PM Tue, Dec 15, 2009 | Donita Naylor

By Alex Kuffner
Journal staff writer

NORTH KINGSTOWN, R.I. -- The town could face a $2 million drop in revenue even if the property tax levy is raised 4.5 percent, and the School Department might have to use its savings and stimulus money just to get through the year, officials said Tuesday in response to the governor's latest spending proposal.

Town Manager Michael Embury and School Committee Chairman Larry Ceresi reponded Tuesday to the governor's proposal after Carcieri called for state and municipal leaders to work together to cut costs. Carcieri said he was open to better solutions, adding that the municipalities could put their cases before the General Assembly.

"We've got two choices. We can lob grenades at one another and criticize one another, or face the reality," the governor said after mayors bashed his proposals Monday evening.

Town Manager Embury said the town is set to lose out on $1.4 million in revenue with the elimination in the third- and fourth-quarter reimbursements from the auto excise tax. Combined with other projected shortfalls, the town could be facing a $2 million drop in revenue next year. (The auto excise tax is figured into the following year's budget. For example, 2009 payments are factored into the 2010 budget.)

And that $2-million figure relies on the Town Council's approving a 4.5-percent increase in the town's property tax levy. Embury said he doubts council members will approve an increase that high.

Towns will have to be more creative in trying to find savings, Embury said. Already, North Kingstown is sharing information technology services with Exeter to save costs.

There may also be more pressure for school systems to look into regionalization. But Embury said he questions what real savings regionalization will bring, if any.

Embury said he was perplexed by the governor's continued approach to state pension payments.

"What I don't understand is how you can continue to defer payments to teachers' pensions. The bill is going to come due in four or five years, and then we'll get crushed."

School Committee Chairman Ceresi said that preliminary figures show the cuts will cause the School Department to lose an estimated $400,000 from its 2009-2010 operating budget.

The School Department has a surplus of about $1.1 million, which is made up of $400,000 in savings from the 2008-09 budget and $700,000 in federal stimulus money.

Administrators planned to use the surplus money to either plug holes in the 2010-11 budget, when a further drop-off in state aid is expected, or to pay for capital projects and other one-time costs. Now, the School Committee must consider using the surplus money this year, Ceresi said.

"We would either have to make additional cuts or dip into that fund surplus to offset the cut in state aid," he said.

Ceresi said he believes the North Kingstown School Department has managed its finances responsibly in recent years, and cut heavily to prevent increases in spending. Over the past 2 1/2 years, the department has cut 50 full-time equivalents to bring staffing down to 600 full-time equivalent employees. In addition, the current budget is $150,000 lower than the 08-09 budget.

But Ceresi says the same cuts aren't being made at the state level.

"They're passing down the difficulties that they're facing," he said.

"We're making the cuts," he said. "What's frustrating is you're not seeing the same at the state level."

CORRECTION: The initial version of this story named the wrong town that has partnered with North Kingstown to share information technology services. The correct town is Exeter.

Chris Prata said:

I commend the fiscal responsibility of the Ceresi school committee to have surplus funds on hand that might weather this latest storm. But how much more is there to trim? Town Manager Mike Embury is doing a great job on 'the town side' as well. The state should only be as responsible as todays NK local leaders have been.

Link | December 15, 2009 11:14 PM