Revenues plunge downward in North Smithfield

NORTH SMITHFIELD - Tax collections for the first quarter of the 2009-2110 fiscal year, which ended Sept. 30, held steady compared to the previous fiscal year, but other revenues have dropped precipitously, Town Administrator Paulette D. Hamilton has reported.

The town collected $8.6 million in taxes and revenues in the first quarter of this fiscal year compared to $9.6 million for the same period in the 2008-2009 fiscal year, a plunge of $1 million, according to Finance Department figures.

Tax collections held steady.

First-quarter property and motor vehicle tax collections were $8.1 million or 29.53 percent of the total $27 million tax levy the town expects to collect this fiscal year, Hamilton reported.

Property and motor vehicle tax collections in the first quarter of the 2008-2009 brought in $7.7 million or 29.13 percent of a total tax levy of $26 million, according to Hamilton.

However, revenues, which include fees, interest income, miscellaneous receipts and state reimbursements, plunged in the first quarter.

"I'm genuinely concerned," she says of potential fiscal storm clouds gathering on the horizon.

Compounding Hamilton's fiscal anxiety is the steady erosion of state funding to cities and towns.

The administrator shudders at the prospect the state may pull the financial rug from beneath the 39 cities and towns by withholding quarterly payments of the state motor vehicle excise tax.

Such a move would cost the town $516,000, and that alone would prove a devastating hit and budget buster, Hamilton said.

"A town this size doesn't have the capacity to absorb another hit from the state," she warned.

"What the state is basically doing," she said, in assessing the potential loss of $516,000, "is balancing its budget on the back of the cities and towns."

What's particularly frustrating about the state's reneging on its fiscal commitment to cities and towns, Hamilton says, is that "we (town) have no control over it, which is the worst part. Our fate is not in our own hands."

The administrator said she loathes the prospect of having to scramble to rebalance the town budget because the state is abrogating its fiscal responsibility, which is unfair.

"No matter how fiscally prudent we are, we still get penalized," she said, while poring over the first quarter budget numbers.

Because the town's crafted a lean budget, there are "so few options for reducing spending," she said.

Nevertheless, if the town loses the $516,000 and revenues don't improve, the administrator said she'll explore all options, including spending cuts and debt restructuring, to balance the budget.

The very last option she'll consider in balancing the budget will be a supplemental tax increase, she said.