Thursday, October 09, 2008
The Budget Mess and How to Solve It
[Update: I got some numbers mixed in up reading all the comments and articles at the Reporter -and things were actually more bleak than what I originally thought. I've updated the blog to reflect that. My apologies.]
Honestly, I'm not even going to link to the Reporter, and all the many budgetary articles (and sordid comments) that go along with it. We all know the budget problems - and they're not good.
Let's just deal with the facts:
Fact Number 1. We're facing a budget shortfall of around $1.3 million. That's a pretty hefty number, but not so huge that it can't be tackled in a way that can save this town's elementary schools - the one area on the MCAS where Swampscott scores among this state's elite.
Fact Number 2. The town unions voted against the GIC, which would have saved around $500,000 a year. That doesn't make them "greedy," just shortsighted. There are very real reasons for the union to vote against the GIC, but they still missed the bigger picture. It would have been a quid-pro-quo they could have collected on in the future, when times were better. Plus, it would have saved jobs. Most importantly, it may have healed the bad blood between the town, its elected officials, administration and teachers. That bad blood is making this entire town stink.
Fact Number 3. We're sitting on two properties worth approximately $5 million combined, along with several others that will be sold off. The sales can't be used on the general budget, but the property taxes they'll bring can be used for those purposes. How much will those property taxes be worth? If town meeting passes the recommendation, they'll be in excess of $500,000 - going a long way toward solving our fiscal woes. If Town Meeting doesn't pass the recommended plans, it will be just as damaging to the town as the town employees voting down the GIC.
Fact Number 4. If $1.3 million or something close to it is what it'll take to keep Hadley open, that's a few hundred dollars per taxpayer over an entire year. That's not a huge number to keep our integrity and maintain our record of elementary-level excellence. At worst, Swampscott is set to reach its fair share of Chapter 70 funds in two years - which will mean hundreds of thousands more in school spending. It won't be that much longer before the town will get the $500,000 annual income in property tax revenue from the Greenwood/Temple projects. This isn't a time for any nuclear options, such as closing Hadley, but rather it's a time to do what it takes to stay affloat - the metaphorical need to work overtime, not declare bankruptcy and foreclose on the house.
Conclusion: If we have to lay off a few town employees, we can always hire more in a few years, when our fiscal situation is better. We can't always open up a new school. That's the biggest reason there is to do whatever it takes to keep Hadley open.
It'll take some time to sell the town's vacant properties, but not so long that they couldn't make a difference in next year's budget (even if its number will be significantly reduced compared to what they'll bring in 5 years from now). That could help alleviate some of this pain, though only a small fraction. Thankfully, despite the the state's fiscal difficulties, our local aid won't go down in next year's budget - as politicians will be loathe to reduce municipal aid. All this means better days are ahead, but Swampscott needs vision and courage to get there.
Honestly, I'm not even going to link to the Reporter, and all the many budgetary articles (and sordid comments) that go along with it. We all know the budget problems - and they're not good.
Let's just deal with the facts:
Fact Number 1. We're facing a budget shortfall of around $1.3 million. That's a pretty hefty number, but not so huge that it can't be tackled in a way that can save this town's elementary schools - the one area on the MCAS where Swampscott scores among this state's elite.
Fact Number 2. The town unions voted against the GIC, which would have saved around $500,000 a year. That doesn't make them "greedy," just shortsighted. There are very real reasons for the union to vote against the GIC, but they still missed the bigger picture. It would have been a quid-pro-quo they could have collected on in the future, when times were better. Plus, it would have saved jobs. Most importantly, it may have healed the bad blood between the town, its elected officials, administration and teachers. That bad blood is making this entire town stink.
Fact Number 3. We're sitting on two properties worth approximately $5 million combined, along with several others that will be sold off. The sales can't be used on the general budget, but the property taxes they'll bring can be used for those purposes. How much will those property taxes be worth? If town meeting passes the recommendation, they'll be in excess of $500,000 - going a long way toward solving our fiscal woes. If Town Meeting doesn't pass the recommended plans, it will be just as damaging to the town as the town employees voting down the GIC.
Fact Number 4. If $1.3 million or something close to it is what it'll take to keep Hadley open, that's a few hundred dollars per taxpayer over an entire year. That's not a huge number to keep our integrity and maintain our record of elementary-level excellence. At worst, Swampscott is set to reach its fair share of Chapter 70 funds in two years - which will mean hundreds of thousands more in school spending. It won't be that much longer before the town will get the $500,000 annual income in property tax revenue from the Greenwood/Temple projects. This isn't a time for any nuclear options, such as closing Hadley, but rather it's a time to do what it takes to stay affloat - the metaphorical need to work overtime, not declare bankruptcy and foreclose on the house.
Conclusion: If we have to lay off a few town employees, we can always hire more in a few years, when our fiscal situation is better. We can't always open up a new school. That's the biggest reason there is to do whatever it takes to keep Hadley open.
It'll take some time to sell the town's vacant properties, but not so long that they couldn't make a difference in next year's budget (even if its number will be significantly reduced compared to what they'll bring in 5 years from now). That could help alleviate some of this pain, though only a small fraction. Thankfully, despite the the state's fiscal difficulties, our local aid won't go down in next year's budget - as politicians will be loathe to reduce municipal aid. All this means better days are ahead, but Swampscott needs vision and courage to get there.
Labels: budget, schools, taxes
Sunday, April 13, 2008
Whelan's Appeal and the Solution
Every once in a while, School Committee Chair David Whelan sends out a mass email essentially about how Swampscott is continually screwed by the State of Massachusetts in Chapter 70 funds compared to other cities and towns across the Commonwealth. We receive less money per children than towns that are comparable to us. Often, even wealthier communities than Swampscott do better in terms of Chapter 70 funding per child. Whelan almost always has a solid point, and the most recent email - "Another View of Chapter 70" is no different, but ultimately David's line of argument is doomed to failure.
Here's the gist of what he has to say:
The second flaw, the one that fatally wounds David's argument, is the fact that by comparing Swampscott to Lynnfield, Marblehead and others, he's actually pitting cities and towns against each other. For too long, that's how politics has worked on Beacon Hill - and as long as that's the way things work there, Swampscott is always going to be one of the big losers. Swampscott will just never have enough leverage to receive more than its fair share; it'll take another 3 years to receive just the 17.5% Chapter 70 funding (which is what David is asking for). David's arguments, while correct, end up in dividing his own natural base to be conquered - manipulated only by human nature. Bigger cities and towns, with more political clout than a freshman legislator, don't even have to work hard to protect the status quo, because natural allies like Swampscott, Marblehead and Lynnfield are already feuding.
A far more effective way of addressing the problems of state aid funding (or a lack thereof) is in underscoring its universal problems - which, if solved, would do even more to address the current nightmare than reforming Chapter 70's formula for every town. Each and every town across Massachusetts is facing difficult economic times - some far worse than Swampscott (and that's saying something). Ultimately, the real solutions to our economic problems are solutions that will positively effect each and every municipality across the Commonwealth - from Swampscott to Lynn to New Bedford to Pittsfield.
So, Ryan, if David's wrong - what should Swampscott be doing? Of course, that's the big question, isn't it? Well, Swampscott needs to work with municipalities that are facing similar problems - which is certainly something David is trying to do - but that alone isn't a winning coalition. Small, fairly-well-to-do towns that don't receive their fair share aren't going to overcome the stink at Beacon Hill. Does anyone honestly think there are state legislators who serve these towns that don't want to see Chapter 70 changed? Maybe some could do more, but if only towns like Swampscott represent the coalition for change on Chapter 70, we're tilting at wind mills.
Furthermore, since there just isn't enough money to go around, Swampscott's gains would be Lynn's detriment - and I don't think there's a whole ton of people in this town that think urban communities have too much money to fund their schools. Neither do towns that are similar to Swampscott, yet aren't screwed over by Chapter 70: they're facing difficult times too. It should be obvious that picking fights among communities facing similar problems, even if some are facing stiffer consequences, isn't a winning strategy for change. It would make more political sense to create larger coalitions and go after common solutions.
The biggest political winner, in my book, would be to create a .5%-1% income tax increase specifically geared toward funding schools across Massachusetts on a per-child basis. Every city and town would stand to benefit and it would be more than just a band-aid approach to a solution. It would also benefit towns like Swampscott most - it will act as a security net for when municipalities eventually get screwed over by arcane educational formulas, with little means for state recourse. At some point, most every city or town is going to get screwed over by difficult-to-understand and even-harder-to-change formulas, so every city and town stands to gain by a larger base funding mechanism.
If school committees across the Commonwealth came out in favor of such a measure, it would be a solution to the problem that everyday legislators could get behind. Ultimately, any state legislators fearing the T-Word could just blame it on Celluci, to boot, because he's the one who set Massachusetts up for failure by pushing through tax cuts that were too steep to meet core services. Restoring just some of them could fix the failed experiment while keeping the state fiscally grounded with a still-modest income tax rate compared to the other 49 states in the union. What other solution exists that won't set up scenarios where cities and towns become too busy fighting each other to work together, that actually addresses the revenue problem and does so in a way that would be quick to implement and wouldn't cost an arm and a leg? I'm all ears.
Here's the gist of what he has to say:
How does Wellesley with almost three times the income per today’s Boston Globe get $105 more per child? How does Lynnfield get almost $600 [more] per child given their similar level of income per the referenced Globe article?Of course, as I've said, at no point is David actually wrong. There probably aren't two people in Swampscott who don't get that. Unfortunately, though, while David is right on the merits, his argument fails to overcome two fundamental flaws. The first is that there just isn't enough cookies in the cookie jar to go around since Celluci drove through this state's last major tax cut. No matter how the cookies are divvied up, there are going to be some towns and some kids who get screwed over. Heck, even the towns that do 'well' in Whelan's analysis are facing tough economic times - despite the fact that they benefit from the overly-complicated and fundamentally flawed Chapter 70 formulas. The fact that every city and town across Massachusetts is facing similar problems with the current formula means that there isn't a huge incentive for rank and file state legislators to fix Swampscott's problems - because in order for Beacon Hill to fix our problems, it's going to have to fix the bigger ones first (lest other towns register similar complaints to our current ones).
The second flaw, the one that fatally wounds David's argument, is the fact that by comparing Swampscott to Lynnfield, Marblehead and others, he's actually pitting cities and towns against each other. For too long, that's how politics has worked on Beacon Hill - and as long as that's the way things work there, Swampscott is always going to be one of the big losers. Swampscott will just never have enough leverage to receive more than its fair share; it'll take another 3 years to receive just the 17.5% Chapter 70 funding (which is what David is asking for). David's arguments, while correct, end up in dividing his own natural base to be conquered - manipulated only by human nature. Bigger cities and towns, with more political clout than a freshman legislator, don't even have to work hard to protect the status quo, because natural allies like Swampscott, Marblehead and Lynnfield are already feuding.
A far more effective way of addressing the problems of state aid funding (or a lack thereof) is in underscoring its universal problems - which, if solved, would do even more to address the current nightmare than reforming Chapter 70's formula for every town. Each and every town across Massachusetts is facing difficult economic times - some far worse than Swampscott (and that's saying something). Ultimately, the real solutions to our economic problems are solutions that will positively effect each and every municipality across the Commonwealth - from Swampscott to Lynn to New Bedford to Pittsfield.
A Better Way
So, Ryan, if David's wrong - what should Swampscott be doing? Of course, that's the big question, isn't it? Well, Swampscott needs to work with municipalities that are facing similar problems - which is certainly something David is trying to do - but that alone isn't a winning coalition. Small, fairly-well-to-do towns that don't receive their fair share aren't going to overcome the stink at Beacon Hill. Does anyone honestly think there are state legislators who serve these towns that don't want to see Chapter 70 changed? Maybe some could do more, but if only towns like Swampscott represent the coalition for change on Chapter 70, we're tilting at wind mills.
Furthermore, since there just isn't enough money to go around, Swampscott's gains would be Lynn's detriment - and I don't think there's a whole ton of people in this town that think urban communities have too much money to fund their schools. Neither do towns that are similar to Swampscott, yet aren't screwed over by Chapter 70: they're facing difficult times too. It should be obvious that picking fights among communities facing similar problems, even if some are facing stiffer consequences, isn't a winning strategy for change. It would make more political sense to create larger coalitions and go after common solutions.
The biggest political winner, in my book, would be to create a .5%-1% income tax increase specifically geared toward funding schools across Massachusetts on a per-child basis. Every city and town would stand to benefit and it would be more than just a band-aid approach to a solution. It would also benefit towns like Swampscott most - it will act as a security net for when municipalities eventually get screwed over by arcane educational formulas, with little means for state recourse. At some point, most every city or town is going to get screwed over by difficult-to-understand and even-harder-to-change formulas, so every city and town stands to gain by a larger base funding mechanism.
If school committees across the Commonwealth came out in favor of such a measure, it would be a solution to the problem that everyday legislators could get behind. Ultimately, any state legislators fearing the T-Word could just blame it on Celluci, to boot, because he's the one who set Massachusetts up for failure by pushing through tax cuts that were too steep to meet core services. Restoring just some of them could fix the failed experiment while keeping the state fiscally grounded with a still-modest income tax rate compared to the other 49 states in the union. What other solution exists that won't set up scenarios where cities and towns become too busy fighting each other to work together, that actually addresses the revenue problem and does so in a way that would be quick to implement and wouldn't cost an arm and a leg? I'm all ears.
Labels: budget, chapter 70, david whelan, Swampscott, taxes
