Haverhill Mayor Jim Fiorentini said he is pleased that Gov. Deval Patrick has submitted a budget that wouldn't cut local aid, but state Rep. Barbara L'Italien, vice chairwoman of the House Ways and Means Committee, cautioned that local aid may be cut by the time the budget is final.

L'Italien, an Andover Democrat who represents sections of Bradford and Ayers Village, said a $3 billion gap between what Patrick wants to spend and what the state has on hand could force cuts to local aid as budget negotiations proceed.

Fiorentini said he is encouraged by Patrick's preliminary budget, submitted on Wednesday, Jan. 27, because it keeps local aid for fiscal year 2011 — which starts July 1 — at the same level as the current year.

Still, the mayor said he will tell City Council this week that a combination of cuts and new taxes are needed to balance the city's fiscal year 2011 budget.

Haverhill received around $36 million — not counting reimbursements for school building projects— in each of the last two years.

Local aid for the city side of the budget was roughly $13 million in fiscal year 2010.

Fiorentini said he will have to find places to cut to make up for increases in costs for health insurance and pensions for city workers.

Retirees and members of municipal unions make up a significant percentage of the city's health care costs, and their cooperation is essential in keeping the city's budget the same from last year to this one. "I'm going to issue a challenge (to unions): work with me. Save the jobs of union members," he said.¬� "If we can cut health care costs, we'll cut the rate of increase. We'll save a lot of jobs," he said.

The budget that Patrick submitted to the Legislature includes $600 million from the federal government for Medicaid reimbursement.

L'Italien said that money is not assured; Congress must reauthorize the expenditure.

Dealing with the deficit is the top priority, she said. "I can't guarantee that we will be able to keep local aid at current levels."

L'Italien said the state's Health and Human Services Department would be trimmed if the Medicaid money failed to materialize, but said Patrick must be prepared to cut local aid if those cuts are needed to balance the budget.

The state budget is in its earliest stages. Still to come are budget preparations by the House and Senate Ways and Means Committees, votes by both houses, negotiations by a conference committee and finally the governor's signature.

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