No Financial Recovery Yet Locally

Town Administrator Andrew Maylor's final financial forecast, for at least the coming year, projects sluggish revenue growth as health insurance and pension costs continue to rise.

The upshot for the outset of the budget season is a $500,000 hole, he said.

The state's budget woes continue to impact including state funding for schools, he said.

The town's net state aid, when factoring 2.5 percent annual inflation, is down about $1.8 million from a decade ago, Maylor said.

The town received $3 million net state aid for Fiscal '12.

Any relief from education reform is unlikely in the short term as is any relief from potential revenues generated by casino gambling in the state, he said.

In addition, consumers have been spending less on automobiles, meaning less excise tax revenues.

The best hope for closing the Fiscal '13 budget gap is for state aid increasing beyond the forecasted amount; health insurance premiums being less than expected; and spending cuts without reducing services, he said.

A piece of positive news comes from school enrollment figures.

The past two fiscal years charter school costs to the district have decreased and tuition from Nahant students has increased.

Between 2007 and 2010 the opposite was true, and it levied considerable strain on the town budget.

Five-Year Forecast Includes the Following:

• Salaries and operating expenses projected to increase by 2.5 percent annually
• Health insurance costs projected to rise by 10 percent annually
• Retirement appropriation is expected to increase by 15 percent in Fiscal '14 and 10 percent each year thereafter
• State and county charges and cherry sheet offsets are expected to increase by 2.5 percent each year