Appropriation Committee AdHocFiscalTaskForce-AppendixD-RPT

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APPROPRIATION COMMITTEE REPORT TO 2009 ATM —MARCH 2009 • 1% change in school compensation- $560K • 5% change in out -of- district SPED expenses - $326K • 1% change in municipal compensation - $189K • 2% change in health insurance costs - $420K Tables A -2.and A -3 show actual, appropriated, budgeted, and projected amounts for revenues and expenses for FY2008 through FY2013 for Scenarios 1 and 2, respectively. While we have provided actual, appropriated, and budgeted amounts for all sectors we have not projected revenues and expenses for budget lines that have direct offsets, i.e., exempt debt, enterprise fund direct expenses, and grants and revolving funds, as they do not affect the bottom line of the General Fund. The bottom lines for FY2011 in the two scenarios are deficits of about $2,900,000 and $3,800,000. We guess that the actual range of uncertainty of these numbers considering the universe of possible factors is very roughly three to four times as large as the difference between the figures for the two scenarios, or roughly $3M. Thus, the results suggest that while the fiscal picture in Lexington at the time of the formulation of the FY2011 budget could be anywhere between a level - services break -even situation and a very substantial deficit condition, the best guess is that we will face a moderate to good -size deficit. The results in Tables A -2 and A -3 show projected deficits that grow larger with time. The growth is faster in Scenario 2 than in Scenario 1 by about $1M per year. Because the Town is required to have a balanced budget, and in reality deficits are not allowed, the projected deficit for each future year can be interpreted as the cumulative level of budget cuts or new sources of revenue that will be required. 3 -Year Budget Projections $o FY2010 FY2011 FY2012 FY2013 ($2,000,000) ($4,000,000) ($6,000,000) ($8,000,000) ($10,000,000) Fiscal Year --9 Scenario 1 f Scenario 2 Page 55 of 59