Mashpee selectmen continued to assess the impact of COVID-19 on town finances during their virtual meeting on Monday, May 18, with a presentation from town Finance Director Dawn Thayer that compared the current situation to the 2008 financial crisis.
“I’ve been here 24 years and this is one of the biggest challenges in my career here,” Ms. Thayer told the selectmen. “It’s a huge task, but we’re going to get as much money as we can to come to Mashpee.”
Ms. Thayer said a lot of stimulus money, including $1,250,000 from the recent passage of the CARES act by Congress in late March, is coming into the town but that “it’s very complicated and there’s multiple programs and all the programs are run differently and have different requirements.”
She said it is important that the town not “double dip,” that care must be taken to ensure that if the town requests money for one program, it does not tap the same source for a second program.
Ms. Thayer explained that the analysis provided to the selectmen by the finance team looked at the years 2008 through 2013.
“When a financial crisis hits, we don’t feel it for another year or two later so what we did to get a true picture of what happened in 2008, we actually had to expand from 2008 out to 2013 because we started to see a turnaround from the recession in 2008 beginning in 2012,” she said.
Looking at the data provided by Ms. Thayer, chairman of the selectmen Andrew R. Gottlieb said, “It seemed the property tax collections during the downturn 10 years ago stayed pretty strong and if they weren’t paid in the first year, almost all of them were paid shortly thereafter.”
He noted, however, that in an earlier conversation with state Senator Julian A. Cyr, Sen. Cyr had said that without federal aid, state aid to municipalities could decrease 25 to 30 percent in the next fiscal year’s budget.
“Where are the vulnerabilities from the town’s collection point of view?” Mr. Gottlieb asked. “What are the other ones that you’re worried about, given your history in town, that are most likely to be sensitive to the downturn?”
“The state aid is definitely the most vulnerable and the one that worries me the most,” Ms. Thayer said.
After the 2008 financial crisis, she said, “We were able to cover that loss of state aid with our actual revenues over our estimates but it was almost a complete wash, we had almost no actual revenues, so state aid has kind of got me a little nervous at this point.”
“I’m confident with our local revenues, at least at this point in time,” Ms. Thayer said.
She said she does not know what will happen with the meals tax assessed on prepared foods at restaurants or other food venues but noted, “I think we can absorb a lot in [Fiscal Year] 21.”
Property values for FY 2021 are not expected to decrease since the values are based on the previous calendar year’s sales, a memo from Ms. Thayer to the board said. Property values for FY 2022 could be impacted depending on how COVID-19 affects the real estate market during the rest of 2020, she said in the memo.
New growth may also be lower than expected if the health crisis slows down building and construction, Ms. Thayer said.
“What’s happening now is a lot different than what’s happened in the past,” Selectman Thomas O’Hara said. “I don’t know if the revenues are going to continue or not, but we’re looking at a lot of people that are out of work.”
Mr. Gottlieb noted that while “no recession and depression is the same as the one that preceded it,” when it comes to budgeting during a financial crisis, “All we can do is look to the past and then try to adjust it based on our understanding.”
Selectman David W. Weeden said the information provided by the financial team is useful, but the current financial crisis is different from the 2008 financial crisis.
“I’m not sure how quickly we’re going to bounce back, it could be quicker, it could be shorter,” Mr. Weeden said. “The effects are different and the cause of the economic shift is different, so I just want to be proactive with our dealing with it.”
Mr. Gottlieb said further conversations with the finance director will continue at the next meeting of the selectmen as the board begins to use the information to think about what might change about the budget for Town Meeting.