With every new year comes a new set of possibilities and problems, but Plainville will face one of its worst financial quandaries in 2008 with a $1 million budget deficit.

"As a short-term problem - and it's not really even short-term for us and I think a lot of other cities and towns - that's the biggest problem we face," Town Administrator Joseph Fernandes said. "In my 15 years here, this is, if not the worst, then the second-worst financial problem we've faced."

Fernandes said the only financial problem of comparable magnitude in his tenure was the closing of Laidlaw Waste Systems, which had accounted for 15 percent of the town's revenue.

Selectman Rob Rose agreed that the town's financial situation is the key issue to be addressed.

"I must think about that pending deficit every day, every day," Rose said. "It just looms over me. It makes everything else pale in comparison. There really isn't going to be any other issue besides that, because it's going to have such huge ramifications." Last year, the town faced a roughly $700,000 budget deficit, but made up for it by taking surplus money from various department budgets that would normally go into free cash, and applying it to the deficit.

"It's akin to looking through the cushions and emptying out the coffee cans," Fernandes said.

"But you only do it once. We did it thinking 'Oh, maybe things will turn around.' And we just put off the inevitable."

Rather than turning around, things are continuing to worsen financially despite the town's efforts to scrimp and save. While health insurance costs continue to skyrocket, free cash is falling steadily, from $1.3 million two years ago to $750,000 last year, to an estimated $250,000 this year.

That leaves three potential ways to handle the deficit: cut town services, pass a Proposition 2 ½ tax override or dip into the town's stabilization fund, a rainy day saving account with about $700,000 in funds.

Fernandes said that while none of the options are palatable, the last is a particularly bad idea considering this year's deficit is not caused by an unusual spike in expenses, but a steady increase that only looks to grow larger next year.

He said dipping into the town's emergency savings account would only worsen the town's overall financial picture while failing to address any of its problems.

In terms of cutting services, selectmen have already met with all department heads to discuss the deficit. This month, departments will be asked to submit maintenance of service budgets, taking the town's meager finances into account.

It won't be easy for departments to pare down their budgets, however, considering most cost-saving measures have already been employed, and many departments are operating on a "bare bones" principle already.

In light of that fact, town officials are trying to organize a citizens' task force to determine which town services should be cut. Fernandes stressed that the other potential solution, an override, is not mentioned as a threat to residents, but a choice about the town's spending practices. The issue will likely be brought up at town meeting, when departments will present two budgets to town residents: one with an override factored in, and one without.

Rose said he thinks the solution might involve a combination of approaches.

"Sometimes I think we need to look at not just one or two, maybe three or four different solutions," he said. "We need to look at kind of sharing the pain more equitably, rather than just putting the burden in its entirety on the town services, or putting the burden entirely on the taxpayers."

Although the town's financial situation is the biggest concern for 2008, it's not the only one. Other issues on the horizon include the newly formed redevelopment authority to overhaul the dilapidated center of town, "trickle-down economics" affecting the ability to hire and maintain a work staff, and possible development on the rural west side of town. A landowner on Peck Street wants the street deemed a public way, which could lead to development and undue pressure on that area of town.

But Rose said "everything is secondary" in light of 2008's financial picture.

"It's really going to be a hard year," Rose said. "Like I said, I think about this every day. Something always brings it to the floor, and I just keep thinking about how we can handle it. But everybody has to be part of the solution."

Plainville 2008

Population: 8,094

Tax Rate: $10.74

Form of government: Board of selectmen, town administrator

School system: Anna Ware Jackson Elementary School, 508-699-1304; Beatrice H. Wood Elementary School, 508-699-1312; King Philip Regional Middle School, 508-541-7324; King Philip Regional High School, 508-384-1000

Web Site: http://plainville.ma.us