To the editor:
In times of an economic crisis we need our government to stoke the economic fire, not throw water on it with budget cuts. Our economy needs economic multipliers, consumer confidence and consumer spending. Slashing budgets during an economic crisis accomplishes the exact opposite. With necessary physical restrictions imposed upon us, we need our government to inject every dollar it has available into our economy. Choosing to protect cash flow is incredibly short-sighted and self-serving. The need for government services has just increased dramatically. The safety that our fire and police departments provide is more important than ever. Students have lost months of in-person education, and today I believe parents would classify teachers as critical workers as well.
The city of Beverly is fortunate that it has an abundance of resources to tackle these problems. At the end of the 2019 fiscal year, Beverly had a total cash balance of $70 million and in the time of a pandemic, cash is indeed king. A portion of this cash balance is an “unassigned” fund balance of $24 mllion, a hefty nest egg. Not only is there cash in the bank, but there is slack in the budget. Beverly’s certified financial statements show that the city has run healthy budget surpluses for some time now. In fiscal years 2017, 2018 and 2019 respectively, the budget surpluses have been $5.5 million, $5.1 million and $4.8 million. Put differently, Beverly citizens have helped generate $15 million in disposable income for the city and it is time to put that money to use.
Possibly taking money from the bank to temporarily cover recurring expenses is unpleasant. However, the 20% to 25% of the Beverly workforce that may become unemployed and will have no choice but to do just that to cover their monthly expenses, including tax revenue that the city is expecting to receive directly from them. Today is the rainy day. Our citizens should expect our local government to dip into the citizen-funded bank account to cover expenses and provide stable, consistent services.
Budget cuts slash city services while freezing budgets significantly reduces them due to contractually obligated salary increases and rising health insurance costs. A reduction in city services reduces real estate value, which limits future revenue growth. This starts a vicious spiral, as limited revenue growth limits future budget increases, limiting the speed the services are restored to pre-pandemic levels. This, in turn, limits future revenue growth. This cycle can continue year after year. Or, we can put an end to it before it starts, but it takes forward thinking and courage.
Uncertainty need not beget fear and a feeble budget. Most businesses are burning through cash to maintain stability and standing, Beverly citizens should expect our government to use the resources we have provided to do the same. Leaders walk confidently, not timidly. I’m hopeful that we will see many leaders in this year’s budget cycle.