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Proposed override won’t be sustainable

March 12, 2012

It’s been said that the proposed $3 million municipal/school override that residents will be voting on at the June town election will serve as a “sustainable” way to balance the town budget in the long run.

Don’t be fooled. This override won’t be sustainable, and it will just make problems worse.

In 2001, voters approved a mammoth $3.7 million override that was to be divided between the municipal and school budgets. The goal was to avoid major financial shortfalls during the 2000s, and for awhile it worked. The school department even saw budget surpluses between 2005 and 2007.

The good times apparently stopped sometime around 2007.

That year, town leaders once again asked residents to approve an override to help avoid future budget shortfalls. Town Hall proposed a $3.7 3.9 million override, but voters promptly turned it down with 48 percent turnout in a special election.

The schools began to see red ink all over their balance sheets, so more revenue hikes followed. In 2009, school leaders raised fees and lunch prices. In 2010, Town Meeting approved a local meals tax increase to help cut a multi-million-dollar school budget shortfall. In 2011, Town Meeting plundered the town’s Free Cash account to bail out the schools facing yet another budget gap.

Yet after some of the largest town tax increases in a generation, Walpole schools still don’t seem to have enough. This year, they’re asking for $3 million more from the taxpayers.

If the tax increases of the past 11 years weren’t enough to keep the town solvent, it’s legitimate to wonder whether a tax increase this year will have similar results.

Override supporters have said that this year’s override is necessary because of a significant decline in state and federal aid over the past decade that has essentially canceled out the $3.7 million in additional funding from the 2001 override.

On its website, Walpole Pride, a pro-override PAC, notes that the 2001 override “provided great strength and stability for the district,” but reports that “since then Walpole has seen State Aid decline by $2 million, Federal Medicaid revenue decline by $500,000, [and] State Prison Mitigation funding ($750,000) become unpredictable at best.”

It’s been well-established on 180 and elsewhere that starting with Mitt Romney in 2003 and continuing into the administration of Deval Patrick in 2007, two different Massachusetts governors waged a full-fledged assault on local aid. The effects have been devastating for cities and towns.

Nevertheless, it’s difficult to find evidence for Walpole Pride’s assertion of a $2 million decline in state aid. According to the Mass. Department of Revenue, the town of Walpole received around $8.5 million in total state aid in FY 2002, just $200,000 higher than the $8.3 million Walpole received in total state aid in FY 2012. While that does represent a decrease in funding over ten years, it’s hardly a $2 million reduction that override advocates are crowing about.

Between FY 2002 and FY 2012, Walpole’s allotment of education funding from the state has actually increased by about $2 million. That’s not a huge increase over ten years, but it’s still an increase.

Though the prison pork barrel earmark disguised as “mitigation money” has indeed become “unpredictable” in recent years, it was first implemented in 2004, several years after the initial override vote. Walpole lost prison mitigation funding for about four years, between 2008 and 2011, representing about $3 million in reduced revenue over that span. During the time it was available, however, it brought in almost $3 million total in additional revenue that hadn’t been available when the override was first approved. Over a decade, the prison mitigation money has had a net pay off for the town, even though it was cut for four years.

Walpole Pride claims that the 2007 override vote was prompted “due to the warning signs of this declining state revenue.” Even if we believe the talking point that state revenue has indeed plunged, it’s worth noting that town officials apparently didn’t act accordingly.

During the past 11 years when state aid has supposedly dropped like a rock, municipal officials had multiple opportunities to negotiate new contracts with the town’s municipal labor unions.

Even though they knew in 2007 that state aid was starting to fall, the union contracts they negotiated at the time included unaffordable longevity bonuses and mandatory annual raises for every town employee. Officials not only included these costly provisions in each budget, but also boasted about these union contracts as “fair,” “responsible,” and “prudent.”

Evidently, town officials simply didn’t think the reduction in state aid was significant enough to warrant major scrutiny of the town union contracts and personnel costs. Now that they are pushing for an override for the second time in five years, town officials seem to be outraged about the state aid reductions. Where was this outrage a year ago and five years ago when union contracts were being re-negotiated?

If this override does pass, there’s no evidence that state aid reductions won’t continue to occur over the next decade. The economy shows no signs of recovering anytime soon, and state tax revenue continues to come in at a sluggish rate. It’s quite possible, and in fact entirely expected, that Walpole will continue to see even more declines in state aid which, judging by the past 11 years, means Walpole will be on track to get another override vote sometime in the early 2020s.

School Committee Vice Chair Nancy Gallivan told 180 that this override will be different from the 2001 measure because she thinks there’s hope in the next several years for a reduction in unfunded and underfunded mandates that are sapping the school district’s resources. Gallivan also says she believes the Walpole Teachers Association, the union that represents the district’s teachers, may be willing to negotiate significant reductions in their benefits and compensation in the next ten years if they see that taxpayers are willing to step up and pay more.

Both the WTA and the reduction in mandates will help make this year’s override sustainable, according to Gallivan. Unfortunately, this might be more wishful thinking than anything else.

It’s true that State Auditor Suzanne Bump has begun cracking down on unfunded and underfunded state mandates on cities and towns, and there is evidence that legislators are moving towards fully funding these initiatives. It’s all great news, but it’s not a reason to increase taxes now.

Once these mandates are peeled back and school districts like Walpole are given some breathing room in their budgets, an override won’t be needed. We shouldn’t jump the gun and hike taxes now if we know that there’s a good chance our problems will be solved in a few years anyway.

As for the union concessions that Gallivan believes might be achieved, these concessions should be occurring override or no override. It’s a fact that it takes two parties to sign a contract, and Walpole officials shouldn’t be agreeing to union contracts that they can’t afford. Even if an override does not pass in the next ten years, every town union should be expected to give up more.

One Comment leave one →
  1. Jirair Akopian permalink
    March 28, 2012 2:34 PM

    We need to get some independent auditors! This way they can audit every penny “managed” by town. My kids attend public school, but I would agree on override if I knew that the money is being managed properly! Why did we build the library again?!
    I wish I was an accountant! Anyone knows what is required to get auditors involved?
    Enough of obviating scares onto people!

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