Research Bureau: Improved Economy Didn't Help City Coffers
The Worcester Regional Research Bureau has issued a report of its observations of the city's $542-million budget for fiscal year 2013 and recommendations resulting for future planning.
The report noted that over the past decade, spending, mostly due to increased costs of employee benefits, has been up, while staffing has been down. Between 2010 and 2011, the city's workforce declined by 16 percent, but its general fund budget grew by 18 percent, the report said.
Although Worcester's unemployment rate dropped by more than 3.5 percentage points since its peak of 10 percent in January 2010, the bureau found that improved economic conditions didn't play a direct role in improving the city's finances. That was partially helped by declines in health care spending and that the city didn't have to cut aid to areas other than schools.
The report found that uncertainty in the city's fiscal outlook has to do with softness in the local housing market and the prospect of increased spending on employee health and retirement benefits.
Among its recommendations, the bureau suggested that the city council develop a five-year plan for implementing a single tax rate. The issue has been a point of contention between business owners and residents for years.
It also suggested that city officials regularly assess the financial viability of the city's non-core assets – such as Green Hill Golf Course – because of its unsustainable commitments to pension and retiree health care benefits.
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