An association of all six Vineyard finance committees this week called for every Island public employee to forego an annual cost of living increase amid the growing national economic crisis.

It is unclear how the request from the Martha’s Vineyard Finance Association will play out as each Island town wrestles with its budget.

The association put out a statement on Monday asking employees to band together to help avoid layoffs in the coming year

The group has asked even employees covered by unions to effectively refuse any cost of living increase they are offered as a part of standing union contract. The appeal went out to town employees, teachers, and Vineyard Transit Authority workers, among others.

The statement points to job losses, disappearing retirement nest eggs, and no end in site for what the finance group calls the worst economic crisis since the Great Depression.

“These are tough times, and in the past Vineyarders have come together as one in tough times for the good of all,” wrote Jon Snyder, a Tisbury finance committee member and chairman of the association.

Annual cost of living adjustments can increase a worker’s pay by a few percentage points, but the association says that combined, that money adds up to hundreds of thousands of dollars for towns and would help preserve jobs.

Falling gas and heating prices would make foregoing the increases easier to absorb, the statement says.

One major unknown for towns is public school funding, which accounts for more than half of all budgets and is affected by a shifting landscape of state reimbursement money and tax structure.

At the Island schools superintendent’s office yesterday the numbers were still being picked over, but the good news appeared to pair relatively closely with the bad.

This year’s iteration of a complicated and controversial state assessment formula for the schools is not as far along toward aligning with an old regional per-pupil formula as expected said superintendent Dr. James H. Weiss.

The winners in the formula are Oak Bluffs, Aquinnah and Edgartown, while Tisbury and West Tisbury continue to pay hundreds of thousand so dollars more than they would under the regional scheme.

On the upside for the coming year, state funding for schools, known as chapter 70 money, will be level funded.

Funding for school transportation — Chapter 71 — meanwhile will be cut 13 per cent, or $8 million statewide. Mr. Weiss said this means the up-Island school district will get $10,000 less than expected and the high school will see $30,000 less.

Mr. Weiss said the discrepancy between the estimates provided by his office comes from both the cut and from increased efficiencies in the budget.

“Because we’re spending less on transport, the reimbursement is lower,” he said, adding: “It pays more to spend more.” Yesterday’s federal stimulus bill promises six figure aid over the next two years for special education and low income students for most schools.

“I’m just looking at these now, but it looks like we’re going to get back some money,” Mr. Weiss said. He added it was too early to tell if and how this would affect fiscal year 2010 budgets which have already been certified by school committees.

Meanwhile there is no official reaction at the schools to the plea to cut COLAs.

Early this week Mr. Weiss said he had received similar requests in writing from several town leaders.

School employees, many of which are union members, account for the majority of Island municipal wages.

Mr. Weiss had planned to request permission to reopen negotiations with the school unions at an all-Island school committee meeting Wednesday, but the meeting was cancelled due to weather.

The next meeting is scheduled for the end of February. Mr. Weiss said he needs to talk to Daniel Cabot, chairman of the all-Island school committee, to determine the best way to proceed.

Meanwhile no town budgets are yet settled. Chilmark is hoping to give three per cent COLA to all employees said selectman Warren Doty yesterday, though he added a lot depended on the school assessments.

Mr. Doty said that the combined cost to the town for keeping the COLAs would be $55,000.

Asked about the recommendation from all-Island finance committee, Mr. Doty said he was unfamiliar with the statement but that town leaders had made a priority out of maintaining salary benefits.

“We don’t want to balance the budget on the backs of employees,” he said.

He added that several cuts are already planned elsewhere in the budget, to summer beach staff, legal expenses and loans.

He predicted more cuts before the budget process winds up by Feb. 15.

Aquinnah, whose annual town meeting is later than other towns, on May 12, is still in preliminary stages of budget preparation, but town coordinator Jeffrey Burgoyne said based on an informal staff meeting that included a selectman and library and emergency services staff, COLAs and step increases will be on the table for cutting.

Edgartown municipal employees already have had their increases scratched. Town administrator Pamela Dolby said the town was facing fewer aid cuts than expected ($73,000 for fiscal year 2010 and just $9,000 for the current year).

Still, the association’s statement is just a plea: the majority of public employees are union members and not legally obliged to give up their cost of living increase. The finance association is also an advisory board with no regulatory clout.

Mr. Snyder said the call extends to unions in the interest of fairness.

“Many towns have nonunion members and it’s not fair to ask nonunion members to forego if the union are not to follow suit,” he said, adding: “It would definitely be an important gesture and it’s reasonable. Inflation by most measures has slowed and there’s even deflation in places.”

Pointing to his own town of Tisbury, Mr. Snyder said COLA percentages had been worked out as far back as mid-fall when gas prices were much higher. Although the statement presents the COLA cuts as an alternative to staff cuts, Mr. Snyder said those are inevitable if the recession continues.

“If revenues keep falling towns will have little choice other than to cut personnel,” he warned. “Budgets are basically wages and benefits.”