City Budget later this year will be a grim reminder of COVID-19 financial problems

Revenues for the City and state are down across the board – that coming with the announcement that the State Lottery sales are down 30 percent since the first week of March – and it’s a situation that City Manager Tom Ambrosino said will be wrenching to deal with once the COVID-19 crisis is mitigated.

This week, State Lottery officials told the Record that sales are down across the board since the first week of March by 30 percent – which is almost $30 million less per week. They expect it to go down even further as business continues to be shut down, and that will likely affect unrestricted local aid to cities like Chelsea.

No surprise to Ambrosino, who said it’s not just the lottery, but also hotel excise tax, meals taxes, property taxes and other forms of revenue too.

“I would say every revenue source for the City has fallen through the floor and Fiscal Year 2021 will be an incredibly gut-wrenching time for Chelsea and every other city and town in the Commonwealth and the nation,” he said.

Gov. Charlie Baker had already presented his State Budget proposal two months ago, which the State Legislature was reviewing and the City was using to start formulating numbers for its budget. 

Not anymore.

“I would say the governor’s Fiscal Year 2021 budget has been shredded and he’ll be starting from scratch,” he said. “Anything the Commonwealth had planned to do is likely interrupted. The only question for the City is what are the cuts and how much cutting will we have to do. It’s still too early to tell because we have no idea what state aid will look like and we had been crafting our budget based on those numbers.”

There is $150 billion set aside for state and local government in the CARES Act passed last week by the federal government, but Ambrosino said it’s nowhere near enough.

“That will be totally insufficient,” he said. “There will be massive layoffs to government workers unless the federal government steps in to support state government and cities and towns like they did big companies and small businesses. Until they do that, the majority of the layoffs in the nation will be in government.”

There are also concerns about the School Department, which was set to start reaping the benefits of the long-awaited Student Opportunity Act. That is in question now, and few have any answers at this moment as to whether that money will come in, or whether districts will be left to make even more cuts and try to survive.

“I think mayors and city managers and superintendents are all troubled by this, but we have so many immediate concerns in the next week or two with safety and health that worrying about July 1 is second in priority,” he said. “Everyone is just trying to get through the day, the week, the month. July 1 is going to be a nightmare, but we can’t worry about that now.”

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