As consequence to a potential reduction in the $200 million state aid in fiscal 2011, an estimated $400,000 might be cut from the money Saugus uses to pay salaries and help carry out basic services.

Nothing is final yet but Town Manager Andrew Bisignani has already been thinking up a contingency plan if ever this budget reduction comes through.

He says that he has resources to deal with the cut and has mentioned a fall back of the free cash they still had and a reduction in operating expenses.

This was not the first time a cut to local aid has been made, in the past there has been a cumulative 1.8 million reduction in aid over two years and there is a trend of operating expenses rising every year. What’s more, Bisignani says, was that the uncertainty on the state affects contingency planning. He recalls how the town didn’t receive its final local aid number last year until July.

On the brighter side, House Budget Chief Charles Murphey said that communities may see less than the maximum cut and that they are looking into giving municipalities control over health care costs. Moreover, in a recent radio interview House Speaker Robert De Leo hinted that an expanded gambling proposal to be debated in the House next month could be used to ass to local aid fund.

For the mean time Bisignani is watching out for further developments and will be adjusting his contingency plan accordingly.