NEW BEDFORD (WBSM) — Mayor Jon Mitchell presented his $513 million Fiscal Year 2024 budget to the New Bedford City Council Wednesday night, an increase of about $42 million over the previous year’s proposed budget.

Of the $513,169,319 proposed budget, the largest component was the General Fund at $458,910,392.

Courtesy City of New Bedford
Courtesy City of New Bedford

Mitchell noted that the current economic climate requires “the same careful, conservative approach to budgeting that has served us so well in the past,” and once again called for reform for the City’s healthcare costs.

“Without a doubt, healthcare reform is the area of the budget that would have the most positive impact on municipal finances,” he said. “That is why I intend to refile my previous request for the city council to vote to adopt Sections 21-23 of Chapter 32B of Massachusetts General Law, as so many other localities have done to better manage spiraling upward healthcare costs.”

That allows for a neutral arbiter to resolve differences between unions and the mayoral administration when negotiating healthcare costs.

“It is hard to understate how much healthcare spending contributes to the property tax burden
on our residents,” Mitchell said. “Between 2012 and 2023, employee health insurance costs rose from approximately $35 million to $46 million, or nearly $1 million per year every year.”

“Worse yet, the rate of spending increase is growing fast this year, and there is good reason to believe healthcare spending may increase faster still in future years,” he said. “This budget includes $51.7 million to cover healthcare costs, a full 10 percent increase over last year’s budget.”

Courtesy City of New Bedford
Courtesy City of New Bedford

He also noted that nearly every other surrounding community had already adopted Sections 21-23 of Chapter 32B. Mitchell has attempted numerous times to get the city council to adopt the measure, with it most recently failing in a 7-3 vote in 2022.

Courtesy City of New Bedford
Courtesy City of New Bedford

Mitchell also said pension costs “are another major budget item contributing to the burden on taxpayers,” citing that state law requires the retirement system to be “fully funded” by 2035.

“That much is out of our control,” he said. “But the Retirement Board and the City Council both possess a measure of local control that could be exercised to reduce the impact of rising pension costs on taxpayers – and, equally important, help ensure the future solvency of the pension system for today’s active employees who are counting on it to be there for them when they retire.”

Mitchell pointed out that the City’s pension fund is only 52 percent funded, and that out of 104 government retirement systems in Massachusetts, only six other systems are less funded than that of New Bedford.

“New Bedford is near the very bottom of the list because we have been chronically unrealistic about the affordability of pension benefit expansions in the past, and that needs to change,” he said. “The notion that we can successfully restrain overall spending by trimming elsewhere in the budget, but doing nothing on these key budget drivers, is simply ignoring the elephant in the room.”

Mitchell pointed out that health insurance, pension payments, and other insurance programs accounted for an $8 million increase to the proposed FY24 budget over the previous year.

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Another major portion of the budget is $238 million in Net School Spending requirements, an increase of $23.1 million, or 10. 5 percent. In addition, the City’s contribution to Charter School Sending Tuition increased $3 million from the last fiscal year, to $30 million.

The city council will now begin budget hearings, which City Council President Linda Morad has said will be conducted over Zoom so that residents will have the ability to livestream the discussions as the council decides if and where to make cuts to the proposed budget.

“The preparation of any budget proposal is always a complex undertaking, and the current proposal has presented its fair share of challenges,” Mitchell said. “Mandated expenses, recovering local receipts, cost pressures from inflation, and an uncertain economic environment are all significant considerations this year.”

“But we will meet these challenges by relying on the same cautious, deliberative approach and the effective partnership between the administration and the city council that has served us well in the past,” he said.

Read Mayor Mitchell's Complete Budget Speech

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