With the cost of pensions, insurance rising and state funds dropping, Town Manager Michael Driscoll said the town faces a deficit of nearly $750,000 in his preliminary Fiscal 2014 budget.
Revenues, totalling $106.15 million, will actually grow about $3.6 million from the current fiscal year, 2013, but the expenses will grow faster - by $4.3 million - to $106.88 million, Driscoll told the Town Council Tuesday night.
Local taxes are expected to grow $3.2 million, or 4.1 percent, to $80.5 million, Driscoll said. State Aid, however, will drop by $367,850 - a 3.7 percent decrease - to $9.7 million.
The cost of pensions will rise about $1.2 million, up to $10.7 million. This includes $1.25 million put aside to pay off a debt in the pension. Driscoll said the town must increase funds to the pension by $3.2 million over the next three years to get the town on pace to pay off the debt by Fiscal 2022.
The cost of insurance is projected to rise $665,235, up to $14.1 million, a 4.7 percent increase.
Driscoll has built in a 2.5 percent increase in the budgets for the Watertown schools and the municipal departments. The increase would make the school budget in fiscal 2014 $36.2 million, and an increase town departments budget to $29.1 million.
The budget includes money for settling the contracts for the Watertown Firefighters Union and the library workers, Driscoll said.
The shortfall is less than the deficit project last year at the same time. When he first released the Fiscal 2013 budget, Driscoll projected a $1.3 million shortfall. The original expenditure forecast for Fiscal 2013 was $103.15 million, and the Town Council approved the budget at $102.5 million.