Comparable Communities Financial Data
At the special town meeting on Monday a town meeting member asked for comparisons for Milton and similar communities. It seems like a good time to update some data I’ve published a couple of times over the last 3 or 4 years. I’m adding to it a deeper look at community expenditures that I first prepared along with other Warrant Committee members 5 or 6 years ago.
First, what is a comparable community? I’m using a list developed by the School Long Range Planning Committee for inclusion in that document. The communities were selected by an ad hoc group comprised of myself, Treasurer Kevin Sorgi, School Committee Member Mary Kelly, then Warrant Committee member Natalie Monroe and Co-Chair of the School Long Range Planning Committee Greg Hall. We agreed unanimously on the following criteria.
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.
Twelve towns closely fit the criteria: Belmont, Westwood, Walpole, Scituate, Sharon, Hingham, Holliston, North Andover, Westborough, Westford, Reading, and Needham.
Here is a series of data comparisons for these communities. The source for this data is the Division of Local Services of the Massachusetts Department of Revenue.
Average Single Family Tax Bill, Rank Order
Town------------------------------------Avg. Single Family Tax Bill
Belmont-------------------------------------$8951
Westwood----------------------------------$7928
Sharon--------------------------------------$7833
Needham-----------------------------------$6907
Westborough------------------------------$6784
Hingham-----------------------------------$6515
Westford-----------------------------------$6415
Milton--------------------------------------$6217
Holliston-----------------------------------$6157
North Andover----------------------------$5896
Reading------------------------------------$5858
Scituate------------------------------------$5182
Walpole------------------------------------$5159
Medium Family Income in Rank Order
Town-----------------------------------Med. Fam. Income
Needham--------------------------------$107,570
Westford---------------------------------$104,092
Westwood-------------------------------$103,242
Sharon-----------------------------------$99,015
Hingham--------------------------------$98,598
Belmont---------------------------------$95,057
Westborough---------------------------$94,610
Milton-----------------------------------$94,359
North Andover-------------------------$91,105
Reading---------------------------------$89,076
Scituate---------------------------------$86,058
Holliston--------------------------------$84,878
Walpole---------------------------------$84,458
Tax As a Percent of Income
Town--------------------------------------% of Income
Belmont--------------------------------------9.4
Sharon----------------------------------------7.9
Westwood-----------------------------------7.7
Holliston-------------------------------------7.3
Westborough--------------------------------7.2
Hingham-------------------------------------6.6
Milton----------------------------------------6.6
Reading--------------------------------------6.6
North Andover------------------------------6.5
Needham-------------------------------------6.4
Westford-------------------------------------6.2
Walpole--------------------------------------6.1
Scituate---------------------------------------6.0
% Non-Residential Assessed Value
Town-----------------------------------------%
Westborough--------------------------------40
Westwood-----------------------------------14.4
Westford------------------------------------13.9
Hingham------------------------------------13.3
Walpole-------------------------------------13.1
Needham-----------------------------------12.7
North Andover----------------------------12.2
Holliston-----------------------------------11.1
Reading-------------------------------------8.6
Sharon---------------------------------------7.8
Belmont-------------------------------------5.8
Scituate--------------------------------------4.4
Milton----------------------------------------3.6
The Municipal Revenue Growth Factor measures the year to year growth in revenues.
Town----------------------------------MGRF Avg/2005-2009
Westborough----------------------------------5.84
North Andover--------------------------------5.40
Hingham---------------------------------------5.33
Westford---------------------------------------5.10
Holliston---------------------------------------5.10
Walpole----------------------------------------4.99
Needham--------------------------------------4.66
Westwood-------------------------------------4.63
Scituate----------------------------------------4.40
Reading----------------------------------------4.30
Milton------------------------------------------4.20
Sharon------------------------------------------4.18
Belmont----------------------------------------3.83
Expenditures for Major Budget Segments As a Percentage of the Budget
Education
Town-----------------------------------------------% Budget
Sharon-----------------------------------------------59.65
Holliston--------------------------------------------58.69
Westford--------------------------------------------53.93
Scituate----------------------------------------------53.87
Westborough----------------------------------------53.25
North Andover-------------------------------------52.56
Belmont---------------------------------------------51.45
Reading---------------------------------------------50.94
Westwood------------------------------------------50.73
Walpole---------------------------------------------49.83
Needham--------------------------------------------49.78
Hingham--------------------------------------------49.31
Milton-----------------------------------------------45.97
Police
Town-----------------------------------------------% Budget
Milton------------------------------------------------8.22
Hingham---------------------------------------------7.06
Scituate----------------------------------------------6.32
Walpole---------------------------------------------6.22
North Andover-------------------------------------6.11
Belmont---------------------------------------------5.45
Sharon-----------------------------------------------5.22
Westwood-------------------------------------------5.18
Reading----------------------------------------------5.16
Westford---------------------------------------------5.08
Needham---------------------------------------------4.78
Holliston---------------------------------------------4.31
Westborough----------------------------------------3.63
Fire
Town-------------------------------------------------% Budget
Scituate------------------------------------------------8.42
North Andover---------------------------------------6.29
Hingham----------------------------------------------6.05
Needham----------------------------------------------6.01
Milton-------------------------------------------------5.99
Belmont-----------------------------------------------5.22
Walpole-----------------------------------------------4.84
Reading-----------------------------------------------4.78
Westwood--------------------------------------------4.35
Westborough-----------------------------------------4.32
Sharon-------------------------------------------------4.09
Westford----------------------------------------------3.02
Holliston----------------------------------------------1.34
Public Works
Town--------------------------------------------------% Budget
Westwood----------------------------------------------6.64
Belmont-------------------------------------------------6.47
Reading-------------------------------------------------6.28
Walpole-------------------------------------------------6.03
Milton---------------------------------------------------5.96
Holliston------------------------------------------------5.96
Hingham------------------------------------------------5.74
North Andover-----------------------------------------5.52
Scituate--------------------------------------------------5.51
Westford------------------------------------------------5.32
Sharon---------------------------------------------------4.72
Westborough-------------------------------------------4.56
Needham------------------------------------------------4.14
Debt Service
Town-----------------------------------------------------% Budget
North Andover-------------------------------------------14.70
Westford--------------------------------------------------13.76
Westborough---------------------------------------------13.47
Sharon-----------------------------------------------------12.89
Holliston--------------------------------------------------12.22
Westwood------------------------------------------------11.46
Reading----------------------------------------------------9.94
Needham---------------------------------------------------8.17
Hingham---------------------------------------------------7.67
Belmont----------------------------------------------------6.51
Milton------------------------------------------------------6.24
Walpole----------------------------------------------------4.19
Scituate-----------------------------------------------------3.33
Fixed Costs
Town------------------------------------------------------% Budget
Walpole----------------------------------------------------17.11
Milton------------------------------------------------------16.77
Needham---------------------------------------------------16.10
Reading-----------------------------------------------------14.94
Scituate------------------------------------------------------14.06
Westborough-----------------------------------------------13.74
Belmont-----------------------------------------------------11.27
Hingham----------------------------------------------------11.19
Westwood--------------------------------------------------11.18
Westford----------------------------------------------------10.43
Holliston-----------------------------------------------------9.90
North Andover----------------------------------------------5.34
Sharon--------------------------------------------------------4.91
A rough approximation of the amount of services provided can be gleaned from expenditures on a per capita basis.
Town--------------------------------------------------Exp. Per Capita
Westwood------------------------------------------------$3882
Westborough---------------------------------------------$3487
Westford--------------------------------------------------$3412
Holliston--------------------------------------------------$3155
Needham--------------------------------------------------$3092
Hingham--------------------------------------------------$2921
Belmont---------------------------------------------------$2912
Sharon-----------------------------------------------------$2909
Reading----------------------------------------------------$2899
Milton------------------------------------------------------$2641
Scituate----------------------------------------------------$2533
Walpole----------------------------------------------------$2512
North Andover--------------------------------------------$2389
So what general conclusions can we draw from this data?
In terms of taxes, we are 8th out of 13 like towns. Statewide we rank 43rd. In 1990 we ranked number 31, in 1995 number 35, in 2000 number 38, and in 2005 number 47. The override of 2006 halted a slide of 16 places in statewide ranking. As a percentage of income, we also rank 8th.
In the value of non-residential real estate subject to taxation we rank last. At 3.6% we are in the bottom 12 or so communities statewide.
In annual revenue growth we rank near the bottom. Without the 2006 override, our 5 year growth would have been under 4% per year, significantly below our peer communities and the state average of 4.92%. Remember, .5% growth amounts to almost $350,000 at our budget level. That’s $1,750,000 over the five year period.
As for how we allocate our budget, we differ substantially from our peers in the following areas.
Education – We spend the lowest percentage on Education, by a significant margin.
Police - We spend the highest percentage on Police, by a significant margin.
Debt –We rank near the bottom on debt payments.
Fixed Costs- We are near the top on this category, which includes benefits, all insurance costs, and pensions costs. At almost 17 percent, it’s a budget buster.
Expenditures – We are hardly a spendthrift community. We rank near the bottom. If we spent the same per capita as the town just above us our budget would be $6,708,000 greater.
I have all this data on a spreadsheet. If anyone wants a copy, shoot me an email.
==============================================
Planning Board Master Plan Survey
At the strong urging and under the direction of Planning Board Chair Emily Innes, the Planning Board has taken a first important step toward revising our Master Plan. The citizens of Milton are encouraged to make their views known via a survey. The survey seeks to discover what it is the citizens of Milton want to see the planning process focus on – housing, open space, development, etc..
The survey is ideal for getting input from the greatest number of residents and avoiding overrepresentation of views of special interest groups. It is detailed. The open ended component allows for substantial responses to be developed. It could take a fair amount of your time to do a good job.
Fortunately, the software utilized by SurveyMonkey permits anyone to take the survey over a period of visits, when time allows. As long as you do not click “done” until you are actually done, you may return and work as many times as you wish. Simply click “exit the survey” and when you return you will be brought back to the place you left off.
If the data recapped above and the financial problems we have had in the last decade do not spur you to action, I don’t know what will. Make you opinion count. Tell your town leaders what you want them to do. Channel your frustrations and fears constructively on a matter of real importance to our town’s future.
Here is the website:
http://snipurl.com/cnxu1
You have until the end of March to finish it.
posted by Philip Mathews at 10:48 PM
24 Comments:
Phil, I am so happy that you have returned this EXCELLENT blog post to the front of the line. This is real data that no one can argue against. I plan to share this with as many people as possible, since it is the type of information that MUST be publicized to everyone. This needs to get reprinted again in the Milton Times and even the Ledger. What do you think?
This is a great post Phil. Precisely the kind of data we need to help diffuse some of the "swirl" regarding the budget etc. I have posted a link to this from my blog, MyTownMatters (http://02186.mytownmatters.com)
Welcome back, Phil. Your blog is an excellent go-to source for information. I'm sending your link to the Patriot Ledger. The results of your time-consuming research should have a greater audience. You should think about having your blog officially linked to the Ledger via their on-line version. Bravo on keeping us well informed.
Phil,
Thanks for the post. I think it is good that Milton is not at the top of the overtaxed towns. It would be great if it was at the bottom. In the end it's only stats. A high taxed town may have had a major project or it could be highly mismanaged. A low taxed town could be well run and maybe we should emulate them. My raise this year is zero percent which is what the property tax should be raised.
Your characterization of these towns as overtaxed is a very subjective opinion. For the most part towns are not overtaxed.
There is no evidence that any of these communities are mismanaged or have a "major project" impacting their taxes to a sizeable degree. A well run town could be either taxed at a low or a high rate. There is no necessary conclusion to be drawn about the quality of management based soley on the tax level.
The property tax should and will be raised by what the citizens decide it should be (over whatever prop 2 1/2 allows).
I was comparing these towns to other towns in the United States. Most people who live outside the Northeast would think we are overtaxed.
You also show no evidence that there are no "major projects" or that there is no mismanagement. I was just playing the devil's advocate to show that stats don't show the whole picture.
The tax should be cut in line with the level of service that is provided by the town.
Your opinion that the towns are not overtaxed is just as subjective.
Communities outside New England have a county form of government and pay most of their taxes to the county, not the town.
So you would be paying apples to oranges.
I don't need evidence for your contentions, you do. I follow these communities. An unsupported contention doesn't show us much of anything.
The taxes are in line with the services provided. That these towns are not overtaxed can be objectively assessed from comparable levels of taxation and as a percentage of wealth.
The comparison is more like tangerines to oranges but at the end of the day it's still a tax for services.
Taxes are assessed to the amount people are willing to pay. The services that are paid for with these taxes are provided at the maximum price that government will pay. If given a choice people would rather pay a lot less for the town services. The taxpayers are not given this choice. The only choice given is pay this higher tax or lose service.
Most services that are provided by government would cost far less if they were provided by a private company.
Comparing taxation as a precentage of wealth sounds stalinistic. Property taxation should be based on services rendered and the salaries and benifts for these services should be in line with private industry. I already pay state and federal taxes based on income.
The fact that people would like to pay less than the services cost is obvious.
I'd like to pay less for the food I eat. As with all things, the choice is pay the going cost or do without.
It is a libertarian fantasy that things would cost less if provided by a private company. There may be areas where privatization is feasible, but not for the full range of community services.
You have a rather strange view of Stalin!
If you don't think there is a correlation between wealth and the services communities, and individuals, choose to enjoy than I can't help you.
I'm not seeking help, I'm just trying to interject a different way of thinking.
I'm not a libertarian. I'm not advocating privatization. Although in this state I would bet most services would cost less if privatized. What I am saying is that public employees should receive benefits and pay in line with private industry. I know it is not easy to make the comparison from public to private in some instances but I would like to see this attempted.
You seem to be advocating that we should pay more for services which is why I am making the argument.
Most studies I've seen indicate they are fairly comparable. Lower wages are balanced off by better benefits.
I'm not advocating anything other than reality. The cost of things goes up. We will have to pay more for services, governmental or otherwise. Or reduce the services.
A simple choice which in the final analysis will be made by the residents of the town.
Years ago the better benefits balanced off the lower pay. Not anymore. Most studies show that the combination of wages and benefits is higher than private industry.
I am advocating for reality as well. Cost of things do go up but not as much as the cost of government has increased.
You're right, its only a simple choice that residents can make. Becuase that is all we get to make.
It's too bad the leadership doesn't make the more difficult choices.
This comment has been removed by the author.
Phil,
Getting back to your post...
One thing that separates Milton from most of these towns you have listed is that they all have a significantly larger commercial base. I have thought for years that Milton should increase their commercial areas for two reasons. One is so that instead of leaving town to purchase goods and services I could spend my money in Milton, saving gasoline. Two adding a commercial tax base would lessen the tax burden on residential property owners.
The main problem is that this seems to be an unpopular idea in this community. Especially in my neighborhood.
I agree. We do need to consider commercial development.
Have you taken the Planning Board's Survey to express those views?
By the way, another way of looking at the data is to note that despite a higher, and in some cases much higher, contribution from commercial taxes these communities still pay a higher residential property tax, both nominally and as a percentage of income.
I have taken the survey and I expressed my views in the previous post.
If that is the case then that could be used as an argument against an increase in the commercial base.
I think a combination of an increase in the commercial tax base as well as fiscal reforms in benifits awarded to government employees would greatly improve services in Milton.
Not if an increase in commercial taxes would obviate the need for an increase in residential taxes.
Benefits reform is needed. I don't know of anyone who would disagree with that.
But that takes time under state law. In the meantime, we'll need to make the choice between services and taxes.
Phil -
To me the most interesting number in the analysis is "fixed costs" . If this is truly "benefits, all insurance costs, and pensions costs" as you describe it begs a few questions. First, why are the benefits and pension costs not attributed to the department that incurs them? In a company those expenses would be allocated to the area that had the employees. For example the benefits costs for the Police and school departments would be allocated to those departments and not lumped into "fixed costs" . Second, benefits and pensions are not fixed costs but variable costs based upon the employee base. Third, what can we do to reduce these costs.
While I am sure there are many options available, I would like to see all employees of the town pay a normal portion of their health care premiums. From your earlier post it appears that town employees currently pay approximately 15% of their health care premiums. I believe the average American pays approximately 30% of their premiums (sorry no reference but I remember the number from a CNN story) if you look at the private sector alone the number is higher. This number has grown over the past 15 years. 15 years ago it was much closer to the town employees number.
I would like to see all town employees pay 30% of their health care premiums. The old argument that town jobs have low pay but great benefits does not make sense in today’s world. For the effort and workload most people would argue that town employees are well compensated.
By having all employees pay 30% of their health insurance premiums the town would certainly save money (they would save 15% of the cost of health insurance) the town may also end up with fewer employees requiring insurance. Because the towns plan has such a low contribution percentage this makes the plan a very inexpensive option in households with two working spouses. Typically if both spouses work they will have to choose whose employer to get health insurance from, very often the one with the lowest out of pocket cost will be selected. If one spouse is a town employee then in most cases the town’s plan will be the cheapest and be selected.
I realize for many employees this is a contractual issue and may not be able to be addressed until the next contract cycle. I also imagine it would be hugely unpopular with employees. The fact remains however that the average resident working in the private sector pays 30% or more of their premium costs, and has not seen a raise in over a year. What is the worst thing that would happen if the unions did not agree?
The Department of Revenue, Division of Local Services decides what are fixed costs, and requires communinities to report it that way.
According to the National Coalition on Healthcare, employees pay about 27% of their insurance costs. It's also a matter of the total cost of coverage.
The town is working on the total cost at the moment, trying to get the unions to join the less expensive state employees plan.
In Milton, non-school employees opt for town health insurance at a higher rate than school employees.
You are correct that it will take collective bargaining to change these percentages. At least under current Massachusetts law, which subjects health insurance benefits to collective bargaining. However, it is possible for the legislature to remove insurance from CB by changing the law.
Phil,
I think this year and the next year is going to result in a big change in benefits paid to public employees. Many California cities are declaring bankruptcy and in turn negating these contracts. Many Federal employees now do not receive a defined pension. The cost savings seen for changing the town over to the state medical insurance is relatively small. The cost savings of changing from a defined pension to a 401k would save the town millions.
Impossible you say, look at what has happened in San Diego.
Milton probably won't lead the way because of its small size and relatively wealthy tax-payers. Cities like Brockton, Lawrence and Springfield could reap huge savings. Those cities could hire more firefighters, more police more teachers.
Pensions are a ticking time bomb developed when people were lucky to reach age 62. The defined pension’s time has come and gone.
Verizon recently dissolved their pension system and converted over to a 401k. The negotiation with the union resulted in a layoff freeze with the union for five years and other benefits.
If the government decides to delay action on this benefit it is only delaying the inevitable. More cities will go bankrupt and the bankruptcy courts will have to do the politicians job for them.
The government should exist for the people.
It's dangerous to draw generalities between states on pension plans. Some states were dilatory in encouraging communities to transistion from a pay as you go system to one in which the long term liability is funded. Massachusetts communities have been in the process of fully funding their pensions for some years now. As of FY06, Milton had funded 78% of its liability and was on course to fully fund its actuarial liability by 2017.
That doesn't mean it isn't expensive to fund and maintain the current system. It does mean that an abrupt event such as happened in San Diego will not anytime soon precipitate action in Milton or statewide based on bankruptcies.
The impetus for needed reform will have to come from the immediate savings in contributions we can enjoy.
In the short term, the $1 million per year we can save from GIC membership is far more significant. That should then be followed by changes in the town's share of the premium.
San Diego was caught short- changing retirees on their benefits over a number of years and the compensatory costs of putting that right had a major impact on the system.
Phil,
Did you read this article today?...
http://www.boston.com/news/local/massachusetts/articles/2009/03/10/2_moderators_use_obscure_law_to_pad_pensions/
2 moderators use obscure law to pad pensions
Milton, Canton pair drew on political connections
Pensions are hard to get a handle on and difficult to police. In other words placing the pension system into the hands of government is essentially giving your teenager a bottle of vodka and keys to your car.
Even the Boston Globe has turned on them.
I reject the notion that pension fraud or abuse is somehow a result of anything inherent in government.
Anytime you place fiduciary responsibility in the hands of humans, whether in the public or private sector, there is a risk.
Well done commentary on Town Treasurer contest, Phil. Familiarity with one's way around Town Hall, scope of town government, and good personnel relations are important in this job -- not investment management or c.p.a type experience. Hence my vote, seasoned by almost 40 years experience in Milton Town government, goes to Charlie.
marvin
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