Big Decisions Await for Town to Reach Level Tax Rate Goal

Without any changes to the upcoming 2014 budget, Salem residents will see an 8.4 percent increase in the tax rate, or 59 cents per thousand.

That increase will mostly come from three major upticks in personnel costs – health care, pension and raises.

The total amounts to a $7,500 average increase per employee.

The issue was first discussed at the Board of Selectmen meeting last week and then later brought to the town's Budget Committee.

According to Selectman Stephen Campbell, the items are contractually obligated due to union contracts approved by voters.

He told members of the Budget Committee last week that in order to produce a level budget for 2014, which he said is the consensus goal of the Board of Selectmen, tough decisions need to be made.

He outlined options to level out the expected $1.8 million increase – cutting capital items, cutting town employees or finding a mixture of the two.

Another option he suggested was to spark a discussion with the unions to see if they would be interested in adding a cheaper insurance plan to their contracts. Those savings would require the employees to take that cheaper option if it were to be made available.

Committee member Barry Pietrantonio urged Campbell and the rest of the Selectmen to tackle the 15 percent health care increase head-on.

"For the town to say 'hey, everybody's going to have the same plan,' Unfortunately that's a little unrealistic in this market," he said. "I applaud the Board of Selectmen to take a stand and say 'no, things have to change.'"

Campbell noted that the town's hands are somewhat tied because the union contracts specify the certain levels of insurance.

He offered the example of changing a $5 co-payment to $10, which he said can't be done without negotiating.

Committee member Paul Huard worried about too many cuts, although he said he wasn't going to worry about it until a solidified budget comes before the committee in three months.

"I'm afraid that if we cut stuff so bad, so much, that we lose important services," Huard said.

Campbell said that he expects that there will Salem's 240 full-time employees will drop in 2014.

"I would prefer not to let people go, but in the last two years we have had fewer and fewer staff, and part of it is just for cost. At some point a position doesn't generate enough of whatever it's supposed to generate to justify it in an economic sense.

"No one wants to have a department that doesn't have enough people," Campbell added. "But at some point the taxpayers just say 'no,' and the way they say no generally speaking is on the big dollar items."

Campbell told the committee that two years ago, the town had a 16 percent budget increase, and last year there was a 3.7 percent decrease.

Pension costs take effect July 1, with the 2014 budget showing a full year of those costs.