SUNDERLAND — A Proposition 2½ override question will be on the May 6 election ballot that is proposed as a way to bring in more tax revenue in preparation for expanding budgets.
“Expense growth is outpacing recurring revenue. There’s no persecutor here, there’s no villain — this is just budgeting. It would be really helpful for the town, looking to the future, if this override passed,” said Selectman Scott Bergeron.
“It would increase the current tax rate by 86 cents,” from $14.34 to $15.20, said Town Administrator Sherry Patch.
Since 1998, rates have decreased overall, going from a high of $17.08 in that year, to a low of $12.08 in 2008. Since then, rates have seen a roughly 50-cent increase every year.
Bergeron called the override a “reset,” noting that just because the town is able to increase taxes to that amount doesn’t mean it will. Currently, the town is able to raise between $140,000 and $160,000 in additional revenue, including property taxes and new growth.This year’s budget
This year, the town has a projected $7,562,987 budget — recommended by the Selectboard Tuesday, to be voted on at town meeting April 28 — a $284,522 increase from the $7,278,465 budget approved by residents last year.
Bergeron said the budget has a “$180,000 structural gap” in revenue, reduced to $50,000 by nonrecurring money, Bergeron said.
Driving increases are rising school expenses, up $152,301. Of that, the elementary school’s budget has risen $124,148, with a total operating budget of $2,500,338.
Employee benefit and insurance costs have also increased by $91,279. Of that, $65,369 more in employee medical costs — and the Police Department by $10,771.
With the override — required to raise property taxes above a 2.5 percent yearly limit following passage of a tax-limiting initiative by Massachusetts voters in 1980 — town officials are hoping to expand potential tax revenue by about $300,000 per year, or a little more than $50 per $100,000 in assessed property value.
“The checkbook grows by about 2.5 percent, and then add the value of new growth — Sunderland is pretty static. We don’t have a lot of new construction,” Bergeron said. With that, Elementary School Committee Chair Douglas Fulton noted that “local aid from the state has been a declining percentage of overall funds over the past decade.” Increasing school costs
The proposed override, unanimously passed through the Finance Committee, is intended to counter increasing school costs, which take up about two thirds of this year’s total projected budget. And those numbers aren’t expected to come down in coming years.
“We’re educating more kids, and it costs more money to do that,” Fulton said. “Proposition 2½ is a blunt instrument. It’s not a fine-tuned one, as it doesn’t take into account population shifts. That’s why there is an override provision, to make an adjustment. In my opinion, the Selectboard is doing the right thing to meet this head on.”
Over the past eight years, the school has seen a 14 percent increase in students. In the last two years, “the town has brought in about $300,000 in additional tax revenue, funding roughly $400,000 in additional elementary school costs” over that same period, Fulton said. Countering the deficit, town and school officials have been able to level off prospective budgets using money left over from previous years, insurance claims, and other funding sources.
“The elementary school had been using a buffer built up in their incoming school choice funds to keep down requests to the town budget,” Fulton continued, however, that money has almost dried up and there’s no more financial buffer.
This year, Fulton said the school is spending $425,000 from school choice money but only taking in about $350,000. “You can do the math, we’ll come out in the negative and we don’t have a buffer to do that again in future years,” he said.The future
“We know we will not have these nonrecurring revenues, we know we have expense growth; we’ve heard it from the elementary school, we’ve heard it from Frontier; and it’s not exclusive to education,” Bergeron said.
Thus, with declining state aid, shrinking rainy day funds, more students than ever and rising costs across the board, next year town residents could shoulder even more of the financial burden and have less revenue to pay for it.
If the override fails, school officials will have to make some cuts this year and drastic cuts next year. Bergeron warned of a 2009 repeat, when constituents voted down an override and town officials slashed $790,000 from the total budget, $300,000 from education, the rest coming “right across all the other departments we had control over,” he said.
“I was the chair at that time; I sat in front of a packed room, and we had to make reductions. Cuts were made, people were sent notice of layoffs the next day,” Bergeron said.
“And the double whammy,” Fulton said, “is that after those big cuts to the elementary school, many families decided to choice their kids into other schools, costing the town additional funds and creating a vicious circle. We can’t afford to make that mistake this time.”