Saugus faces big $5.2m override -- or big cuts

SAUGUS -- Awash in red ink, Saugus is looking for $5.2 million in new property tax revenue to avoid laying off dozens of town workers and closing the library, senior center, and a fire station.

On April 24, Saugus will vote on a ballot question to override Proposition 2 1/2, the state's property tax cap law. If the override passes, the average tax bill is expected to go up $400 in fiscal 2008, which starts July 1.

"I think it's a small price to pay for the services we will be able to maintain," said Town Manager Andrew R. Bisignani. "Of course, it's up to the voters to decide."

The $5.2 million tax increase is believed to be the largest proposed among 33 Bay State communities considering Proposition 2 1/2 overrides. The state law limits the amount of revenue a community can raise through property taxes to 2.5 percent over the prior year, not including new growth.

Some communities are considering overrides, which permanently increase the tax cap. Others are asking for temporary tax increases to fund a specific project, such as a library expansion in Gloucester. But so far, none of the 33 proposals match Saugus, either in the dollar amount or the scope of services dependent on the outcome, according to the Massachusetts Municipal Association.

"That's a big number," said John Robertson, deputy legislative director of the trade group that tracks overrides. "It's not targeted for a library, or the schools, as other communities are... It's to balance the budget."

With just about one month to go before the special election, an override committee led by Selectmen chairman Peter Rossetti is planning aggressive outreach. "We're trying to get to people who vote," said Rossetti. "That would be our senior citizens, parents with children in the schools, and family and friends of our town employees. They vote."

The first of two public forums will be held next Thursday at 7 p.m. at Town Hall. "We're not saying, 'Vote yes or no,' " said Stacey Billingsley, a member of Residents for Higher Standards, which is sponsoring the forum. "We want them to be informed about the crisis facing the town."

The override proposal comes as Saugus is under intense financial scrutiny. Moody's Investors Service, a Wall Street bond rating firm, recently downgraded the town's rating two steps, citing its weak financial position. The state Department of Revenue has said it will appoint a control board if the town does not take steps to increase revenues.

"We'd be the first town put under state control," said Robert Palleschi, Finance Committee chairman, who is also serving on the override committee. "That's a stigma I would like to avoid."

Saugus, a town of 26,000 residents, faces a deficit of at least $2.5 million. A spike in healthcare costs due to several serious illnesses among town employees is mostly to blame for the deficit, which probably will grow before the fiscal year ends on June 30. The town's $8 million medical trust fund, which pays insurance bills, is out of money.

"Healthcare costs have not stabilized," Bisignani said. "A number of people still have serious illnesses."

Other revenue sources -- such as permit fees -- also are running low. A year ago, for example, the town had 40 permits for new homes. But this year, only three have been filed. "If that doesn't change, our financial position could get worse, " Bisignani said.

Without the override, town officials say they will have no choice but to make steep budget cuts. "That's the only solution," Rossetti said. "Either this passes or we make the cuts. That's the solution."

A preliminary list of trims would cut the School Department by $1.7 million. At stake are 18 teachers' jobs, along with money to buy textbooks, paper, pencils, computers, and other supplies and equipment. Other reductions would run the gamut from crossing guards to curriculum development.

"It would gut the School Department," said Superintendent Keith Manville.

The Police Department would lose $741,040, and the Fire Department $530,000. The cuts would eliminate four patrolmen, two firefighters, and two dispatchers that serve both departments. Overtime in each department would be gone. The Essex Street fire station, which last week ran out of money to stay open full-time through June 30, would close permanently.

"It would not be safe for anyone, no matter where they live in town," Fire Chief James Blanchard said.

Town Hall would shut down Fridays. Other departments would be closed completely. The Youth/Recreation Department, senior center, and library all would be closed.

"We're the only department that's available to everyone in the community," said Mary Rose Quinn, the library director. "A public library is a great equalizer."

Since 1990, Saugus has held seven elections for either an override or debt exclusion. The proposals ranged from building new schools to hiring 12 new firefighters. Only three debt exclusions passed, including one in 2004 to refinance debt on capital improvement projects. An override has never passed, according to the town clerk's office.

Not everyone agrees Saugus needs more tax revenue. Wearing a homemade sandwich board reading "No" on the front and "Save Proposition 2 1/2" on the back, A rthur Gustafson, 75, said, "They don't even try to make up a budget called for under the law." Gustafson, a former selectman who carries his message around about 75 minutes a day through Cliftondale Square, added, "Now they're asking for more? "

Rick Fail, 49, a parent with children in the public schools, also is skeptical. "We pay user fees for our kids to play sports; we pay for our kids to take the bus," said Fail. "I'm not saying our taxes are the highest around. But when you add everything up we are required to pay, our bills aren't any lower than other communities."

Kathy McCabe can be reached at kmccabe@globe.com.