Wednesday, March 21, 2007

Where Did the Money Go?

This is a question many people are asking. I’ve been asked numerous times in the past week or so. The “money” referred to is of course the $2.4 million resulting from last year’s successful override. And the question is being asked because we once again face significant loss of services despite having passed the override such a short time ago.

The fact that it is asked, however, reveals that many of us still don’t understand the nature of our fiscal problem.

The answer to the question couldn’t be simpler. The money went precisely to the places identified during last year’s override campaign. It went toward preventing the loss of numerous DPW employees, the closing of the recycling center, the loss of streetlights and yard waste collection. It forestalled the loss of 6 police patrol officers and a cut back by 1/3 of police patrols. It pays for 2 or 3 firefighters who would otherwise have been lost, necessitating the part-time closure of a fire station. It protected the services to our children provided by 28 teachers; prevented the premature closing of the 1909 wing with the attendant consolidation into just two elementary schools; and it provided the money to open the new Collicot and Cunningham schools. This doesn’t even cover all the smaller departments whose service levels were maintained.

These services and others are in place today because the $2.4 million pays for them. Our financial problem is not caused by how override money is spent. It’s caused by an imbalance between our revenue growth and the growth in costs. And the problem seems to be getting worse.

Let’s try to understand the problem as follows. Community services are provided by people, so employee costs are the main component of a town’s budget. Employees get raises on an annual basis, probably in the range of 4 – 4.5 % when factoring in longevity. I conservatively estimate that today we need about $ 2 million more each year to cover raises for town employees and keep the level of service they provide the same. But this “carry-forward” cost will go up each year as the base increases by the level of raises. In other words, next year it will take $2,080,000, the following year 2,163,200, and so on, just to maintain the same number of employees.

Now let’s consider the second largest growth item, employee benefits. Benefit costs for our employees have been growing at double-digit rates for some years now. For the coming fiscal year these costs are increasing over $1 million.

So just to maintain our staffing levels and pay for their benefits we need over $3 million in new revenues yearly. The increased revenue for the coming year is in the range of $1.5 million. The problem should be obvious. Now add in all the other inevitable increases –the growing costs of many expense items, the growing costs of government mandated SPED in the school budget, the growing costs of repairing or purchasing town vehicles, and many more.

More disturbing than the systemic nature of this problem is the fact that it appears to be getting worse. It is mitigated somewhat during boom economic times by increases in state aid. And it gets worse during recessions when state aid decreases. But we are somewhere in between right now and the problem is significant even shortly after an override. Cost increases grow each year and revenue increases seem stagnant or down.

Our leadership is simply not dealing with this reality, one that has been apparent now for some years. So don’t be surprised when some level of crisis occurs on a yearly basis. Until we find ways to control our costs and increase our revenues the reality will not change.

And until we get new leadership, that will not happen.


Anonymous Anonymous said...

"where will it end??"
is what the folks who seriously don't get it always ask.
every time we hear this we need to be VERY clear with them--IT IS NEVER GOING TO END!!
we have no commercial tax base.
you can't have it all!
We are going to raise taxers EVERY year OR reduce services (period)
...suck it up people that's the reality...

Mr. GetReal

BTW--did Berne do something wrong?
if Glenn and MS. Lambert are running for a single seat against Mr. Lovely won't Glenn and Berne split the PLU (people like us) vote and make way for Lambert??
Do we really want this??

8:13 PM  
Anonymous Anonymous said...

You get two votes, use one for Glenn and one for Beirne.

7:56 AM  
Anonymous Anonymous said...

Mr. Mathews,
Why is it that no one is mentioning the elimination of Spanish in Grades 1 and 2? Is it because people do not want to address the disparity in public education in this town? I am tired of having to fight for my children every year. If there is no Spanish, there should be NO FRENCH. Bottom line.

4:32 PM  
Anonymous Anonymous said...

How about the comment form Dora - "it's not like there not going to get Spanish, there just going to get it starting the third grad." How about just eleminating the language programs for everyone until third grade. Fair for one, fair for all. I was asked to make a decision for my child. I was given two choices. I made mine. If we were to cancel the French Imm. program, how much do you think we would here????

12:29 PM  
Anonymous Anonymous said...

Enough with the Elite French Program. What is with this town. Music for all. Forget the fight for language. It is causing more of a division in this town than it is worth.

Trying to do what is right for my kids.

12:51 PM  
Anonymous Anonymous said...

as a house hunter this is a bit of a lesson.
we were looking in milton for a home and came across this.

if this is a sign that all milton residents need to be involved and aware of all town developments then we get it. but it sounds as if everyone is living in a place where property taxes are the major source of town revenue and are the only way many services can exist or be paid for,including the level of schooling.

its a very difficult tax situation to be in year after year, knowing that it cannot be offset by any business or other means, and is always on the verge of increasing faster than any other town around you...
its very sobering.

11:36 PM  

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