Layoffs, cutbacks in offing; Budget shrinks for first time.

• Position: LOCAL NEWS

Byline: Elaine Thompson

SHREWSBURY - Town Manager Daniel F. Morgado has released a proposed fiscal 2010 budget that shows several layoffs and an unprecedented reduction in spending, bringing the number of town employees below the 1998 level.

Mr. Morgado is recommending a budget of $87,286,377 - 2.58 percent less than the current budget of $89,596,897. Department heads, however, have requested that next year's spending increase to $93,946,843.

He said the proposed smaller budget reflects a 10 percent, or $2.3 million, reduction in state aid; increased charges and fixed costs; and reductions in new growth and local receipts.

While the budget will likely evolve before town meeting, Mr. Morgado said, it will not change dramatically unless the revenue picture is enhanced. Gov. Deval L. Patrick is suggesting that next year's state aid reduction to the town might be closer to $918,000, predicated on some new taxes and other actions.

But the governor made a similar proposal last year based on casino gambling that did not materialize, Mr. Morgado noted.

"I have chosen not to incorporate the governor's proposal, not out of disrespect, but with an understanding that every proposal that is made by the governor in `House 1' will be subjected to modification and amendment," Mr. Morgado said. "It would be easier to move money back into the spending plan as opposed to taking it out."

This is the first time Mr. Morgado has recommended a town budget that is less than the current budget. This is also the first time the town manager has recommended school spending in his annual budget package. His recommendation is $43,801,695 - 4.5 percent less than the current $45.8 million budget. The School Department, however, is asking for a 5 percent increase, or $48.2 million.

"The Board of Selectmen made it clear they want to see a balanced presentation when I file the budget," Mr. Morgado said. "I think in light of...