As the leaves change color and temperatures fall, it is once again budget season here in Lincoln. As has been the case for the past two years, the Finance Committee is anticipating presenting both a Base Budget and an Override Budget to the Town for approval at Town Meeting in March 2003. In order to keep you informed as we work our way through this process, we have outlined a series of informational commentaries that we will be sending to the Lincoln Journal over the next several months. Please read this information carefully. The Lincoln budget is complex, and the issues facing the Town are not easily resolved. They deserve your attention.

Over the coming weeks, we will be discussing the following six topics:
The Budget Guideline
The State of the Town Meeting
The Town-side Base Budget and Override Budget
The K-8 School System Base Budget and Override Budget
The Lincoln-Sudbury Regional High School Base Budget and Override Budget
The final Base Budget and Override Budget

In this commentary, we will be discussing the Budget Guideline.

First, a few basic facts. Having consumed our excess free cash, the base budget now is revenue-driven. This means that the Finance Committee must make the following calculations before we can provide a Budget Guideline to the budgeting agencies.

The first step is to estimate revenues. The bulk of our revenues is made up of the property tax levy, which rises at 2-1/2% over the previous year, plus an estimate for new construction. To this we add local receipts, which are such things as motor vehicle excise taxes, license and permit fees, and investment income. Finally, we add the estimated cherry sheet revenue and other funds, which are an approximation of all the various state monies that will come to the Town, such as Education Reform payments, Lottery payments, and highway funds, and other revenues such as the payments for the school at Hanscom Air Force Base.

Then, we subtract required expenses. Not all of our expenditures are optional. The Town must pay its debt service. We are contractually obligated to pay the NEWSC trash removal fees. We cannot control the price we pay for health insurance, FICA and Medicare for town and school employees, the County retirement assessment, or general insurance for the Town, although we can and do make a strong effort to keep these costs as low as possible. The Finance Committee has chosen to include in this category the Reserve Fund, since that is the contingency money for all Town budget agencies.

This year, our estimate of revenues is rising only slightly. Lincoln is in a stronger position than many towns because our dependence on state funds is lower, but we are still hard hit by the prevailing poor economic climate. State Education Reform money was reduced in our current fiscal year, and is estimated to drop further. Highway money is estimated to fall. Payments in lieu of taxes for State-owned land have gone down. Total revenues are projected to rise by only 3.6% in Fiscal Year 2004.

In contrast, our required expenses continue to rise sharply. Debt service costs rise as the High School construction gets underway. Our NESWC obligation is significantly larger than last year. Health care and insurance costs continue to escalate. Overall, our required expenses are projected to rise by 11.5% in Fiscal Year 2004.

The combination of these two meant that in early September the Finance Committee issued to the Town and School budget agencies a Fiscal Year 2004 Budget Guideline of 0%. In other words, we have asked for base budgets that are no larger than last year’s budgets. These will not be level services budgets. These will not be level effort budgets. These will be reduced effort, reduced services budgets. They will not reflect growth in the numbers of students at the Lincoln School or the High School. The base budgets we have asked the agencies to develop are the budgets within which the Town must live if an override does not pass.

Recognizing that these are reduced services budgets, however, we expect to receive override requests presented as additions to the base budget. These override requests will be reviewed, and the Finance Committee will put together an override budget that will contain some or all of them. The determination of the exact size of the override budget cannot be made until the override requests have been reviewed and discussions have been held as to an appropriate balance between the services to be provided and the taxpayers’ ability to pay for them.

In order to begin to a discussion of the Town’s current condition, future issues to be addressed, and priorities for resolving them, the Selectmen are holding a State of the Town meeting on Saturday, October 19 at 1pm in Brooks Auditorium. Please come, tell us your point of view, and listen to others’. Most importantly, please bring an open mind.

The Lincoln Finance Committee
Susan Brooks, Co-Chair
Mary Cancian
Paul Giese, Co-Chair
Pat Phillipps
John Robinson
Al Schmertzler
Robert Steinbrook