Taxes

As we approach the annual town meeting it appears increasingly likely that the tireless efforts of the Town Administrator, and the hoped for action by the Selectmen on trash sticker fees, could obviate the need for an override this year. But whether this year or next, an operational override will be necessary to restore services lost during four years of economic downturn and anemic recovery.

That means we must face the prospect of raising our own taxes. A few weeks ago just such a prospect led one school committee member to remark that the average single-family tax bill in Milton has just passed $5000 in 2005. Now that’s a lot of money. And like most Milton residents, I assumed we shouldered property tax bills bloated by numerous overrides necessitated by a virtually non-existent commercial tax base. Is that the case?

The average single-family tax bill in Milton did indeed rise above $5000 in 2005 – to $5064 to be exact. According to the Massachusetts Department of Revenue that is the 47th highest average tax bill in the state. For some perspective, let’s look back to the year 1990, before many of the overrides that have contributed to our current level of taxation. In that year the average single-family tax bill was $2605. That represented the 31st highest tax bill in the state. In other words, in 15 years we fell 16 places in the rankings of tax bills, despite all the overrides we have passed.

Now let’s narrow the focus from all Massachusetts communities to a list of comparable communities. I’m going to use the list of comparable communities developed by an ad hoc committee put together by the School Long Range Planning Committee. It consisted of Treasurer Kevin Sorgi, School Committee member Mary Kelly, current Warrant Committee member Natalie Monroe, Long Range Planning Committee Co-Chair Greg Hall and myself. Selectman Charlie McCarthy was unable to attend the planning session, but submitted criteria that was incorporated into our deliberations. Here are the criteria we developed.

1. That the community have a K-12 public school system.

2. That the town have an EQV within approximately 10% of Milton's (EQV stands for equalized value, and is a financial factor which measures the taxable wealth, or tax base, of a community. It is relied upon by the Massachusetts Department of Revenue to compare communities in Massachusetts).

3. That the median family income be within 10% of Milton's.

4. That the town population be in the range of 15,000 to 35,000.

5. That the K-12 school enrollment be in the range of 2500 to 4500.

These criteria produced the set of comparable towns, unanimously agreed to, which appears in the following list, ranked by average single-family tax bill for the year 2003.

Belmont…………………………$6,832

Sharon…………………………..$6,086

Westwood………………………$5,870

Hingham………………………..$5,077

Westford………………………..$5,039

Westborough……………………$4,987

North Andover………………….$4,796

Holliston………………………..$4,788

Needham………………………..$4,775

MILTON……………………….$4,713

Walpole…………………………$4,091

Reading…………………………$4,074

Scituate…………………………$3,768

As you can see, Milton ranks 10th out of the 13 comparable communities.

Now let’s jump ahead to the most recent data, for 2005. For this ranking I’m adding an additional piece of data, the percentage of the tax levy each community gets from its commercial/industrial tax base. This information comes from the Department of Revenue and is from 2002, the latest statewide data I could find.

Belmont…………………………$7,686……………..5%

Westwood………………………$6,628……………...27%

Sharon…………………………..$6,628……………..6%

Westborough……………………$5,922……………...40%

Hingham………………………..$5,783………………13%

Westford………………………..$5,704………………17%

Needham………………………..$5,517………………24%

Holliston………………………$5,293………………….11%

North Andover…………………$5,288…………………17%

Reading………………………..$5,279………………….7%

MILTON………………………$5,064………………….6%

Walpole………………………..$4,499………………….15%

Scituate………………………..$4,151…………………...5%

For the current fiscal year Milton has dropped another place in the rankings and is now 11th out of the 13 communities. And of the ten communities ranking above Milton in average tax bills, all but two have a much greater commercial tax base to draw on. Yet, in spite of this these communities still tax the homeowner at levels higher than we do in Milton.

Now I suppose one could argue that these communities are wealthier than we are and can afford these taxes. So let’s look at these tax bills in the context of ability to pay. This next table ranks the communities based on the percentage of median family income (1999 data) represented by their average tax bill.

Belmont…………………….8.1%

Westwood…………………..6.7%

Sharon………………………6.7%

Westborough………………..6.3%

Holliston…………………….6.2%

Hingham…………………….5.9%

Reading………………………5.9%

North Andover……………….5.8%

Westford……………………...5.5%

MILTON……………………..5.4%

Walpole……………………….5.3%

Needham……………………..5.1%

Scituate……………………….4.8%

In percentage of income dedicated to the property tax bill we rank 10th out of 13 communities. All but two of the communities paying a higher percentage of income in property taxes benefit from a much larger commercial property tax base.

Each community decides for itself what level of taxation it wishes to bear. In fact, each voter within each community makes their own decision. In recent weeks, as we struggled with yet another budget crisis, we’ve been advised to lobby Beacon Hill for more money. Beacon Hill is not going to solve our problem, although they might help some. Commercial development, such as the Shops at Milton Centre will not solve our problem, although it will help some. The comparable communities we’ve looked at have commercial tax bases we can only be envious of, and which we probably can never duplicate. They still find it necessary to tax themselves at higher levels, and at a higher percentage of income, to fund services they desire. Only we can solve our problem, and that solution involves either taxing ourselves more to pay for the services we desire, or living with fewer services. And if the decision is the latter, we need to have a frank discussion about how these service cuts are going to be apportioned across all town services.

Quarry Hills and the Moderator’s Race

Diane Agostino has attempted to make the Quarry Hills development project an issue in her campaign against incumbent Moderator Brian Walsh. This effort is disingenuous, since the issue has nothing to do with the Moderator’s race. Elected officials studied the issue and made, in hindsight, a very wise decision on the matter. Even if the position of Moderator had been involved in the agreement, Brian Walsh wasn’t Moderator at the time.

I have received an email, an anonymous email, in response to my commentary about Ms. Agostino and her campaign. Among other claims, it asserts that our current financial situation is due in part to the agreement made by the Board of Selectmen during Ms. Agostino’s tenure on that board. Here is the pertinent section from the email.

“The truth sometimes takes time to reach daylight. Look at the Big Dig or better yet the landfill deal. Quarry Hills Associates (QHA) refusal to pay $44,000 in taxes and a measley $52,000 or less annually for golf fees is clear proof the truth will prevale. Agostino stood alone to advise Milton residents the QHA deal was just another benefit to a small group of political connected individuals. The education of Milton children has been reduced by the a substantially limited income stream from a non-qualified business partner, QHA.”

I asked Kathie Dunphy, who along with Rick Neely negotiated and signed this agreement as Selectmen, to comment on the claim. She emailed me as follows:

“Quarry Hills is a good deal for all Milton taxpayers, including Mrs.Agostino, although she does not appear to be able to admit it.

The real value of the QHA deal is that the town avoided the cost of capping the landfill: $11 million in principal and interest or an average of $550,000 a year for twenty years.

QHA, not the Town of Milton, is responsible for methane gas, leachate, and settling of the old landfill.

Tens of thousands of truckloads of Big Dig dirt came into Milton through Quincy, not on Route 28-Randolph Avenue. We were spared noise, dust and truck traffic. The shorter route saved money for Mass. Highway—and all of us Massachusetts taxpayers.

Neighbors have traded the view of a dump for the view of a golf course and enjoy increased property values.

The two selectmen who signed the lease made sure that the work in Milton was done first, before QHA found out that building a golf course on two landfills was more difficult and more expensive than expected. When QHA had to go to the banks for more money, Milton had a capped landfill and a clean balance sheet.

Milton has a valid lease with QHA. QHA is subject to the terms of the lease. When all twenty-seven holes are completed, and as Milton's percentage share of the greens fees increases, this good deal will get even better."

I thank the anonymous emailer for allowing me to highlight yet another reason for returning Brian Walsh to the Moderator’s position on Tuesday.

Remember to get out and vote on Tuesday April 26. And remind everyone you know, and have them remind everyone they know, to do the same. That's the beauty of electronic communication!

Selectmen’s Meeting and Trash Stickers

At the Board of Selectmen’s meeting on Tuesday night the Town Administrator recapped the efforts currently underway to find more money for the Milton Public Schools before the Town Meeting, which begins on May 2nd.

Mr. Colton reported that consideration is being given to increasing the estimate for new growth by $200,000. The Warrant Committee’s budget currently assumes $600,000 in new growth. New growth for the current fiscal year was $839,000. Apparently a change in the projection is being opposed by the Assessor’s office.

An investigation of the possibility of tapping into the NSTAR mitigation funding has been unsuccessful. The Town Administrator read from a letter received from NSTAR which clearly communicated their expectation that the already agreed to terms of the Memorandum of Understanding would be honored.

Mr. Colton also reported that discussions are being pursued with Curry College and Milton Academy about a payment in lieu of taxes.

Finally, trash sticker fees were discussed, with two of the Board members expressing a willingness to consider an increase. It seems, however, that they are not willing to move on this issue unless they see it as part of a package of new revenue large enough to significantly reduce the drastic cuts faced by the schools and thereby convince the School Committee to not seek an override.

So here we are 10 days from Town Meeting and the School Budget remains by far the most seriously impacted by the currently proposed budget. Serious efforts are being made to find more funding. But as the days pass, the probability increases that equity will be sought on Town Meeting floor, or that an override will be proposed. More on that later.

Two final comments on remarks made at this meeting about trash stickers. The Town Administrator said that some people might find it “extraordinary to allocate trash sticker fees to the schools.” I suppose that’s one way to look at it. On the other hand one could, I think, more properly say that the increased sticker fees permit us to re-allocate general fund revenues that had to be used to cover the gap between the cost of a service and the fees generated to pay for it. At this very moment, I don’t think anyone would seriously argue that these funds, freed up by a trash sticker fee increase which more properly funds that service, should go anywhere but to a decimated school department budget.

It was also noted that the decision by the Board to not increase these fees two years ago might be a blessing in disguise, since such an increase would preclude doing so now, just two short years later. But an increase two years ago would hardly have been a one- time revenue boost. We would still be enjoying the benefits of this increase as we plan for FY 2006. And just as importantly, we would have had hundreds of thousands of dollars to allocate during the last two years.

Raising trash sticker fees certainly has political costs. But not raising them also has had costs. There is no question that greater reductions to staff than would otherwise have been the case resulted from not raising these fees earlier.

Election 2005 - Moderator's Race

Diane Agostino is mounting her fifth campaign for Town Moderator, her fourth against incumbent Brian M. Walsh. In reference to her four prior losses during the League of Women Voters debate, Ms. Agostino blamed the losses on the difficulty of going against a “political faction”. She also used the terms “closed camp” and “sororities” to describe what she apparently believes is some kind of syndicate controlling the votes of the 2500-4500 citizens who have voted against her in four prior runs.

Is Ms. Agostino correct? Do we have our own little Tammany Hall here in Milton? Is Brian Walsh “Boss Tweed”, manipulating a machine that has become so efficient that his margin of victory last year exceeded 1100 votes? Or have the voters of Milton merely rejected Ms. Agostino’s message. Have they simply decided Brian Walsh is better qualified for the job?

Let’s look at what the Agostino campaign is saying about the candidacy in the first couple of weeks of the contest. The message is similar to that of past campaigns, so we should be able to make an informed judgment about the question posed.

The Milton Times edition of April 14th contained a Candidates Guide to the 2005 election. Each candidate provided information about themselves and their views. No editorial control was exercised by the newspaper. Here is Ms. Agostino’s opening paragraph.

“Are you surprised that once again, Milton’s expenses exceed our income? Our politicians did not advise us that our annual overrides would only provide enough money to extend services from one year to the next”.

Where to begin!

How about expenses exceeding income? The Warrant Committee has presented a balanced budget for Town Meeting’s consideration, as it always does. By definition, a balanced budget brings expenditures into line with income. As for annual overrides, Ms. Agostino should know the difference between a capital override, such as we had last year for school construction, and an operating override to help fund our annual operating budget. The last such operating override was four years ago. And anyone who knows anything about Milton’s fiscal situation has stated that periodic overrides will be necessary just to maintain our current level of service, unless we find other sources of revenue.

The second paragraph of the statement begins:

“As an independent Moderator, I will appoint an independent Warrant Committee capable of developing a comprehensive financial plan to secure Milton’s financial future”.

Gee, how about a chicken in every pot!

Now I don’t know what is meant by “independent” here, nor what this quality of “independence” has to do with financial planning, but I do know that it is not the Warrant Committee’s responsibility to secure the financial future of Milton. As a four year member of the Warrant Committee, Ms. Agostino should know that. I also know that if securing a community’s financial future was as simple as allowing Ms. Agostino to appoint a committee, she would be far too busy elsewhere to be helping us.

But in the final analysis, the thrust of Ms. Agostino’s campaign is a negative appeal to voters fears and frustrations. She attacks the appointees to the Warrant Committee as incompetents. She offers the same judgment against the members of the School Building Committee. She maligns the Selectmen with whom she served, continuing to fight debates she lost year’s ago. She accuses her opponent of being “owned” by the League of Women Voters and the IBEW Local 103.

I think it is safe to say that the answer to our question about Ms. Agostino’s four losses for Town Moderator is not to be found in the existence of some political cartel with mysterious powers to control Milton voters. It resides with claims made which are contrary to fact, with empty promises, with the seemingly vindictive need to fight old battles, and with a temperament ill-suited to the role of Town Moderator.

For five years Ms. Agostino has been contemptuous of highly talented, experienced and hard working volunteers who serve the Town of Milton. Her characterization of their skills can be seen for the politically motivated attack that it is by reviewing the credentials of some of these appointees at:

http://www.miltonmoderator.com/

More On Overrides

Kathie Dunphy reminds me that there was a debt exclusion override in 1988, one year before the town's first operational override.

The very best explanation for why Milton is faced with the frequent need to consider overrides was provided by Glenn Pavlicek in his comments as Warrant Committee chair in the 2001 Warrant, a year in which the Warrant Committee lead the Town to consider an override.

"The principal goal of any budget process is to balance the organization's expenditures with its revenue. Even looking at the problem at this large a level, we quickly find the fundamental problem that the Town of Milton is facing. Over the last few years, Milton has seen its revenues increase at a rate of about 3.5% annually. Indeed, if you examine the revenue chart inside the front cover of this warrant, you will see that, excluding the proposed override, the Town's revenue is again projected to grow at just under 3.5%. The problem is that, for Towns near Boston, this amount of growth is insufficient to maintain a constant level of service. The factor that the Commonwealth uses to maintain a constant level of service for Towns near Boston (a "Municipal Cost of Living Index"--if you prefer) is 4.7%. In simplest terms, this 1.2% differential means every year Milton's revenue comes up about $600,000 short of what is necessary to do what was done the year before."

So we can see we have a systemic problem with our revenue keeping up with the cost of merely maintaining service levels. In a period of time as short as three years, you are looking at an erosion in basic service levels of 3.6%, or $1.8 million of cuts from level service. This is no doubt what caused Town Treasurer Kevin Sorgi to note a few years ago that the town would need to have overrides every few years to maintain services.

Unfortunately, in the few years since Pavlicek wrote his explanation things have gotten worse. The economic decline we have experienced has reduced revenue growth significantly below the 3.5% annual rate of the former period. Here are the rates for the three years following:

FY03 2.90%
FY04 .98%
FY05 2.70%

Even if our growth rates had stayed at the 3.5% level, in the four years since our last operating override we would be looking today at a loss of almost 5%, or $3 million to base service levels.

As it is, things are even worse.

Trash Sticker Fees - New Revenue Opportunity

In 1999 Milton closed its landfill and was faced with a new cost to dispose of solid waste. That cost amounted to approximately $750,000 in the first year, and we were faced with the problem of how to fund this new expense. The Board of Selectmen offered residents a choice between an override or a “Pay as you throw” trash sticker program to pay for some of these new costs. The residents opted for a trash sticker program.

The sticker price was originally $1.50, and has been raised once since then, to $2.00. The last increase was for the fiscal year 2001, I believe. Since that time the fees have raised approximately $700,000-$725,000 annually. During the same period of time the cost for solid waste disposal has risen to over $1 million per year. This means that more than $300,000 a year which could otherwise be allocated to town services must be used to fund the difference between what is raised and what the program costs.

This deficit lead the Warrant Committee to twice recommend to the Board of Selectmen the raising of sticker fees to close the gap during a period when revenue was desperately needed and when the cost of solid waste disposal was likely to continue to increase. We continue to be desperate today.

Last year a member of the Warrant Committee conducted a survey of 13 South Shore cities and Towns who offer curbside pickup. Five of these towns incorporate the cost into their budgets, while 8 communities have a fee program. The fees ranged from $50-$310 per year, with an average of $185.

An increase in Milton’s sticker price from $2 to $3 would bring the annual cost to $156 for families whose weekly trash didn’t exceed a single trash can. Based on the average ticket sales for FY2002 and FY2003, this would generate an additional $345,000.

This amount of revenue would close the gap between the fee revenue and the program cost, and free up $345,000 to aid a school system in desperate need of the money.

I’ve been told that a suggestion to discuss a fee increase was raised at the last Selectmen’s meeting. I hope that’s the case.

Milton’s First Override

In 1989 the Warrant Committee took the town’s first override recommendation to the Town Meeting. Proposition 2 ½ had been passed 8 years prior. After reviewing favorable factors which had allowed the town to avoid an override scenario during those 8 years, the committee’s report stated:

“However, the Town has reached a point where there will be an annual conflict between providing an essential level of service versus complying with the provisions of the Proposition 2 ½ tax levy limit.”

The Committee then presented the possible personnel cuts which would be necessary should an override not pass. These possibilities included 4 or more cuts in Fire Department staffing, 2 cuts in the Police Department and 12 positions in the School Department.

The Town Meeting, and the citizens in a town-wide vote, passed the override, as they did the following year.

It is interesting to note that in the first instance of a possible need to reduce staffing to meet the levy limit of Proposition 2 ½, staffing cuts to all major departments were envisioned.

It’s Budget Time Again. How Other’s Do it.

The fourth budget under the current economic downturn has been submitted for the Town Meeting’s consideration.

And even more than under the prior three budgets, the impact on town services is being disproportionately borne by the 3,700 children who attend the Milton Public Schools. The School Administration’s first attempt to live within the proposed budget calls for the elimination of 40 + positions from the School’s payroll, as well as the closing of the 1909 wing of the High School, currently home to the Collicot and Cunningham Elementary Schools. At the same time, the proposed budget preserves the staffing levels in the two other large town departments, the Police department and Fire department. During the last 4 years, the cumulative losses in School staffing total 80+ positions.

A year ago just before Town Meeting, listening to the usual arguments that Public Safety must be preserved at all costs – another way of saying that the School budget can be our stabilization fund during economic hard times – I decided to find out how other communities were handling their budget crises. We were then in the third year of an economic downturn which forced cuts in state aid, and in some cases local receipts. Communities were struggling to meet rising costs with little or no increased revenue. And the result had been a significant downsizing of local government in Massachusetts. Communities all over the state were eliminating positions in significant numbers. How were other towns and cities going about making these drastic cuts in their service infrastructure?

The information which follows was gathered from online news databases, various organization websites, and telephone interviews I conducted with town officials from other communities with whom I had established contact during my years on the Warrant Committee.

Braintree:

Terri Ackerman – Executive Secretary

Despite the increase in income from instituting a trash fee of $162, which raised $1.2 million, 100 positions cut in ‘04 budget. Of these 70 were school positions, 30 were municipal positions. Seven of these positions were in the fire department, resulting in occasional station closings and occasionally taking equipment out of service. The Police Department was down 13 officers from its authorized strength levels, with 2 more vacancies anticipated. Two schools closed.

Arlington:

Brian Sullivan – Town Administrator

In FY ’04 eliminated 99 positions, 59 school and 40 municipal, including 7 from the Police department and 9 from the Fire Department.


Winchester:

Brian Sullivan – Town Administrator until March 2004.

In FY ’04, 4 municipal and 2 school positions cut. In ’05 planning 6 municipal cuts and 20 school cuts.

Gloucester:

Donna Leete – Personnel Director

Ms. Leete negotiated a 0% contract with municipal unions in FY’04, and the city took $1.2 million from its stabilization fund. Despite this, 40 positions, or 10% of the municipal workforce, has been lost in the last 2 years, including 7 from the Police, 6 from Fire and 4 from DPW.

Belmont:

Mel Kleckner – Town Administrator

Hiring freeze for a couple of years. Municipal cuts in FY 04 10-12, including 2 Police. FY 05 anticipates four lost positions – dispatcher, town clerks office, accountant’s office. One Police position along with overtime and training, reduced patrol capacity and special assignments, and Police officers will substitute for crossing guards. Two consecutive school overrides have kept the schools level.

Stoneham:

David Berry – Town Administrator

In FY ’04 dipping into stabilization fund kept lost positions to about 33. 11 of these were municipal, of which 2 were Police. In FY ’05 anticipating 54 total positions to be cut, 28 on the municipal side. This includes 3 Police, 3 fire, 4 DPW, 2 in Town Administrators office, and 4 dispatchers.

Needham:

Kate Fitzpatrick – Town Administrator

School override prevented layoffs in FY’04. 36 municipal government cuts, including 5-6 from Police/Fire, and 10 from general government. For FY ’05 anticipate cuts of 1 from Police, 2-3 from fire, and 6-10 from schools.

Lynn:

Mass AFL-CIO Romney Watch

One of the hardest hit communities in the state.

Schools, 150 positions lost, school closings, programs eliminated. 30 full time employees in City Hall. 50 additional municipal side cuts, most in the fire department. 3 library branches closed. Court ordered city to restore $2.1 million to fire department. The city council refused at the recommendation of the Mayor who said that DPW, Police and School departments would suffer even more cuts. One fire station was closed and service cut backs occurred in two others.

Saugus:

Mass AFL-CIO Romney Watch

Positions lost include 17 teachers, nine police officers “fresh out of the academy”, six firefighters, two schools were closed. Two override attempts failed.

Peabody:

Mass AFL-CIO Romney Watch

Peabody lost 7 teachers, 9 custodians, 7 firefighters, 8 police officers and 5 DPW staff.

Revere:

Mass AFL-CIO Romney Watch

Revere lost, in the beginning of ’03, 13.5 teachers, 7.5 police officers and 11 firefighters. Additional cuts to teachers occurred in May.

Weymouth:

Patriot Ledger week of March 22, 2004

12 Fire fighter positions were cut in FY’03. The Police department is down by 8 positions in the last few years.

Boston

Boston Municipal Research Bureau

For the two year period ending in January of 2004, Boston has lost 182 FTE positions in the Police department and 87 FTE positions in the Fire department. The Boston Public Schools have lost over 700 FTE positions.


Professional Firefighters of Massachusetts – Statewide labor union
Lexington Fire Lieutenant Kenneth Donnelly

Since the attacks of September 11, 2001, budget cuts in local communities have forced the layoff of 600 firefighters statewide.

Massachusetts Municipal Association Survey

More than 1,000 personnel on the municipal side of local government were cut through layoffs or attrition in fiscal 2003 and 2004 in the 135 communities responding to the MMA’s Fiscal Pressures and Service Delivery survey. Another 360 unfilled positions were eliminated rather than filled in fiscal 2004. (Respondents account for 38 percent of all Massachusetts municipalities.)

Of these personnel reductions, 41 percent were in the area of public safety (police and fire) and 59 percent were in other municipal (non-school) departments.

=========================

What we see all across the state are reductions to staffing being made to reduce services to the level supportable by a reduced flow of revenue. And what we find when we look at the choices these communities are making for these reductions is a proportional distribution across the three largest departments – schools, police and fire. Even in Boston, the 6th largest metropolitan area in the United States, the public safety budgets have absorbed over 25% of the reductions contributed by the big three budgets.

So why are we in Milton managing economic distress almost exclusively through the downsizing of our school system, as we all the while proclaim our support for the schools?

The response I get to this question, when I get one, is that we decide what we think is best for Milton and it doesn’t matter what others do.

While that is obviously the case, it doesn’t really answer the question, does it.