City officials told the Council’s Ways and Means Committee last week that the School Department budget will likely need an $8 million boost in the next budget, a number that will likely be funded by the upcoming $12.5 million Wynn Boston Harbor payment.
Mayor Carlo DeMaria and Chief Financial Officer Eric Demos told the Council on March 19 that the upcoming May payment from Wynn – the second $12.5 million payment – will mostly go to assist the School Department.
“We project that we’ll use a lot of it this year for the School Department,” said Mayor DeMaria. “They asked us for $8 million over net school spending for next year’s budget. That means we would have only $4.5 million left from the Wynn payment this year because the School Department looks like it will be running an $8 million deficit that we’ll have to fill.”
That revelation comes on the heels of a budget crisis in the School Department this winter where the City pledged $6 million in the end to help fill budget gaps. Overall, the City gave about $6.5 million to $7 million over net school spending this year, after all budgetary charge offs were considered.
Demos said Fiscal Year 2019 is shaping up to be a tougher year for the City in its budget process, and that’s something Mayor DeMaria said they always expected as they waited for the Wynn casino to open and the larger payments that will come on opening day in June 2019.
However, no one expected the crisis with the schools to hit so hard.
“We don’t have the flexibility we had last year,” said Demos. “We will have to use part of (the $12.5 million) for the Chapter 70 issues.”
DeMaria said that will mean slowing down many things that they planned to do with the payment, including hiring police and fire and taking on capital projects.
“We had planned to hire police and fire; we’re not doing that now,” he said. “The early retirement conversation will happen with some employees. We’ll have to slow down capital improvements too.
“I think we always said 2019 was going to be our toughest year,” he continued. “It’s not to say we shouldn’t help the schools. We really need to help the schools to get the funds they need to do the work they need to do for our children. We’re going to work together on this. It’s going to be a great budget process between us.”
Meanwhile, Councilor Michael McLaughlin was interested in how the Wynn money had been used in the past.
The City said that the first year’s payment of $3 million was combined with $2 million in Free Cash. All of that was put towards the tax rate to reduce the tax levy.
The second year, last year, the entire $12.5 million was also put towards the tax rate.
“We knew we would need $12.5 million because there was a deficit in the budget,” he said. “Did we know the budget was over $4 million? We did, but that’ why we transferred the $12.5 million…If we didn’t transfer the $4 million in with the (Wynn money), we would have had to cut that $4 million.”
McLaughlin said he likely would have still supported that strategy, but would have liked to know that part of the Wynn money was being used to cover a budget deficit.
“I didn’t know honestly the $12.5 million was going to cover the $4 million overage on the budget,” he said. “I would have supported the request still, but it would have been a different outcome.”