By JON BAKER

LINCOLN  ---  In the Town Hall meeting room  adjacent to his town administrator’s office, T. Joseph Almond leaned back in a chair Thursday afternoon and offered, “We have one goal and one goal only, and that is to produce a budget the taxpayers can afford. It’s that simple.”

The question, however, persists: Will the final decision leave residents satisfied when the Financial Town Meeting ends, probably rather late on Monday night, May 12?
On Feb. 15, Almond recommended to the Budget Board a combined school/municipal operating budget for fiscal year 2008-09 of $70.8 million.
That figures to be an increase in total spending from the current fiscal year of 1.75 percent, or $1.2 million, which represents a 3.6 percent increase in the local appropriation.
In short, the proposed new municipal operating budget is just over $16.9 million (an increase of $698,000), while the schools operating budget is at $47.8 million (a 2 percent increase).
“While a 5 percent increase in the local appropriation is permitted under the S3050 Property Tax Cap, taxpayers cannot afford it,” Almond said. “All additional spending must be measured against declining revenues related to state aid to education, general revenue sharing and a depressed regional economy.
“The increasing cost of pension, health care and state mandates continue to consume an increasingly disproportionate share of future budgets, and are quickly becoming unsustainable to the local property taxpayer,” he added.
In a nutshell, what does that mean?
“I’m worried (the recommended budget) is going to have to be cut further,” said Almond, who continues to meet with the Budget Board at least once a week. “We’re at the ceiling of what new growth is going to cover … Our projected revenue growth — this year, next year and the year after — can no longer cover the fixed costs of salaries, pensions, health care and utilities on both sides, municipal and schools. We’re going to have to make changes.”
As always, school appropriations provide the biggest question mark.
“The initial schools proposal was a 7.66 percent increase, but that wasn’t accepted,” he noted. “I sent it back to the school department, stating you’re exceeding the amount (the administration) is looking for. Now it’s been brought down to a 5 percent increase, and that was the proposal given to me, but it’s still too much.
“Like I said, I’m recommending a 3.6 percent increase in the total budget (for both municipal and school spending),” he continued. “We don’t know what’s going to happen (at the FTM), but we can’t afford anything more than that. We're still trying to project what we’ll get in new revenue and growth, and those are things on which we based the new recommendation.
“Even now, we’re trying to figure out what the town can afford. Obviously, you want to match your spending to projected revenues.”
All of that work was based on “zero-based” budgeting, as has been the case the past two years, according to Finance Director John Ward. That simply means “starting from scratch” in creating a line-item budget.
“It’s more work, but it’s easier for people to understand because everything starts from zero,” Ward said. “The Budget Board, historically, has questioned the school and municipal departments for justifications of spending. Pure and simple, they’ll have a report — a list of anticipated purchases for each department, and that’s an explanation of each request.
“State aid (for municipal funding) is expected to decline, as it has been, and state aid for education is expected to remain the same,” he added. “We’ll have to make up for that either with a tax levy or cutting costs.”
Almond noted that state aid already has been cut for two years, and it’s expected to be level-funded or trimmed again.
“The bottom line is the state’s in big trouble,” he said of the expected $500 million-plus shortfall. “Before the state knew that, it still was cutting school aid … This year (2007-08), general revenue sharing from the state to cities and towns was sliced. For Lincoln, it was $220,000 from the governor’s supplemental budget. For 2008-09, we’re anticipating the same amount.”
Almond previously had stated that Lincoln had co-founded a coalition of communities developing strategies to address the inequitable distribution of state aid, which in his view is causing an excessive reliance upon property taxes to fund education.
“This coalition is also taking active steps to collaborate in the purchase of health care and regionalize overlapping services,” he said. “In essence, Cumberland, North Smithfield, Smithfield, they are suburban communities, and for about nine years now, they and we have had state school aid reduced, and it had to be made up by such suburbs with local property taxes. We’re trying to put an end to that.
“Let’s put it this way: Nine years ago, Lincoln received 31 percent of its total school budget from the state,” he added. “Today, we get about 15 percent, and that’s not good. It’s getting to the point where Lincoln taxpayers can’t sustain the cost of the school budget.”
In addition, he said, “with state aid dropping for education, and school budgets continuing to rise, some of that shrinks monies from the municipal budget.”
Almond also maintained that “a capital development committee representing the needs of both municipal and school services is nearing completion of a long-term plan to address infrastructure and service delivery while providing more effective budget forecasting.
“With the support of the Town Council, in what may be a first in Rhode Island municipal government, all non-union municipal employees hired after July 1, 2008, will be exclusively placed into individual IRS 457 deferred compensation retirement plans.”
There is good news, however, Almond promised.
“The financial state of Lincoln is still very good,” he said. “We’ve got a surplus in reserves, and we have a good bond (AA) rating. I also think we’ve done a great job of reducing costs.”
Chimed in Ward: “We’re going to be operationally efficient, but certainly there’s no room for luxuries.”