LAWRENCE — More than two-thirds of the city's $242 million budget is built with state money. So that means any cut to local aid, no matter how small, could dramatically affect Lawrence's already lean fiscal 2009 budget.
City councilors and officials are now bracing for any financial fallout from a cut in state money, which could mean anything from a reduction of city services, unfilled jobs and possible layoffs.
"If the state is hemorrhaging, we are hemorrhaging," said City Councilor David Abdoo.
One thing Abdoo said he definitely wants to avoid is a repeat of last winter, when 42 city workers were laid off right before Christmas due to budget problems.
"We know the storm is coming and we have to prepare," said Abdoo, member of the council's Budget and Finance Committee.
Gov. Deval Patrick says the state must cut about $223 million because tax collections in the first quarter of the fiscal year were less than anticipated. While Patrick says cutting state aid will be a last resort, the city is worried, because 68 percent of its budget — or $164 million — comes from the state.
Abdoo recently fired off e-mails to his colleagues, warning that even a 5 percent reduction of state aid, equivalent to $1 million, could have a significant impact on Lawrence.
He met with Budget and Finance Director Mark Andrews to run the numbers. Andrews is scheduled to meet tonight with budget committee members to discuss any updates.
"Right now, we're walking through the budget line by line and seeing if there's anywhere we can lighten up," Andrews said. "We're just at it line by line and trying to be rational."
City Council President Patrick Blanchette pointed to three vacant city jobs, with combined salaries of around $117,500, that were recently advertised in The Eagle-Tribune.
An open personnel director's position, which has not yet been advertised, also carries an annual salary of between $75,000 to $85,000.
Faced with an impending cash shortage, Blanchette said the city has to consider whether filling any open job is "essential."
"Obviously, it's going to be a tough year," he said.
The threat of state cuts comes during an otherwise calm budget planning year in Lawrence. The fiscal 2009 budget was approved in late June, a major step in restoring faith in the city's budget planning process.
In past years, the mayor and council couldn't agree on the bottom line, which set the budget back months and brought threats of state intervention.
