Beverly Coronavirus: City Eyes Past Recessions As Budget Guide

BEVERLY, MA — Beverly officials are looking at revenue data from past recessions as they try to rework the city's annual budget, which was decimated by the coronavirus pandemic.

"Because of the range of possible state aid funding levels, it is impossible to know with certainty at this point how, if at all, any services would be affected," Beverly Finance Director Bryant Ayles said. "We can say that every department will feel some effect of the financial pressure, and we are doing everything possible to protect the level of services our residents currently receive."

Ayles said about 18 percent of the city's revenue comes from sources likely to be affected by the coronavirus, including meals and room taxes, motor vehicle excise taxes, building permits and new growth. To better forecast the impact the coronavirus pandemic will have on city finances, Beverly is looking at past recessions.

"We are looking back over the last two recessions to develop reasonable ranges of shortfalls we can expect and at this point, without knowing local aid levels for the coming year, that range is somewhat wide," Ayles said. "It does however let us know the range at which the city will most likely need to set its spending levels."

Local aid from the state government typically makes up about 12 percent of Beverly's annual budget. "As state aid reductions are unknown at this point, so too is the question of how much, if any, the City of Beverly will need to rely on its stabilization fund to meet spending levels," Ayles said.

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Massachusetts has lost wage tax revenue from the 689,000 jobs that have vanished since the start of the pandemic, as well as lost sales tax revenue from closed, non-essential businesses. That forced the state legislature was to scrap a budget process that began in December, leaving local governments in limbo.

Massachusetts officials are also lobbying for more federal money for states. In Beverly, the city is developing a 1/12th budget for the month of July in case the Massachusetts legislature does not finish work on the state budget by the end of the fiscal year on June 30.

"We are developing a variety of spending plans to meet the range of spending levels and are confident that the Administration will be able to develop and submit a balanced budget to the City Council," Ayles said. "Unfortunately, the financial impact of the pandemic will span multiple fiscal years, and we need to ensure that the reserves the City has built are able to last the length of the recession."

More Coronavirus Coverage On Massachusetts Patch:

• State Needs To Increase Coronavirus Testing To Safely Reopen
• CDC Data Suggest Coronavirus Death Count Higher
• Many MA Residents Still Waiting For Coronavirus Stimulus Checks
• Coronavirus Case Counts For Every Massachusetts Town

Dave Copeland writes for Patch and can be reached at dave.copeland@patch.com or by calling 617-433-7851. Follow him on Twitter (@CopeWrites) and Facebook (/copewrites).