543WVN #417: Special Town Meeting on tax relief likely
- Oct 5, 2011Special Town Meeting on Tax Relief Likely
Dear Wayland Voter,
There was no argument with the proposition that Wayland holds too much money as free cash and some should be returned to taxpayers.
"We need tax relief," Selectman John Bladon said, and nobody disagreed. There are two options, he added: the Board of Selectmen calls a Special Town Meeting or petitioning citizens call it.
Significant differences on cause and cure emerged at a well-attended joint meeting of the selectmen and the Finance Committee on Monday Oct. 3. In the aftermath, citizens ignored officials' request to be patient for a week.
By Tuesday morning some residents were seeking the 200 petition signatures necessary to require a meeting in November to decide the issue.
Some officials had indicated that a Special Town meeting seemed inevitable, whether called by petitioners or the Board of Selectmen. The selectmen encouraged dialogue between proponents and officials during the next few days in hopes of reaching a consensus at the next Board of Selectmen meeting on Oct. 11.
If Special Town Meeting voters decide to apply some free cash to the current budget, the decision would have to reach the state Department of Revenue before the end of the year to become effective in the current fiscal year.
Wayland holds $10.3 million in free cash, 15 percent of the budget. That's apparently the highest proportion of any comparable Massachusetts municipality.
Wayland also has the fifth highest tax rate in the state and is on track to rank even higher under the current budget. The tax bills Wayland property owners received recently are calculated at a projected rate of $20.71 per $1,000 of assessed valuation. That's up about 7 percent from the Fiscal 2011 rate, supporting a budget that's 7 percent higher. The budget increase was attributed largely to the borrowing that voters approved to build the new high school.
Special Town Meeting action could lower those figures; residents would see the result in spring tax bills.
So, what to do? The Finance Committee had discussed taking limited action within its authority that wouldn`t require a special Town Meeting, but simply a FinCom vote to raise the revenue estimate and thus submit a lower tax rate for state approval. Members considered figures ranging from $850,000, to about $1 million.
The FinCom will meet Thursday night and could have a specific recommendation for the next Board of Selectmen meeting.
Resident Donna Bouchard began asking the Finance Committee to consider holding a Special Town Meeting on the surpluses several weeks ago, citing a recommendation in the Abrahams Report, the consultant study that suggested improvements in financial procedures.
The FinCom's suggestion is to proceed methodically with measured actions over more than one year. This could result in asking for an operational budget override above Prop. 2-1/2 limits for Fiscal 2015 rather than 2016 as now contemplated, members said. Halving free cash to about 7.5 percent of budget was discussed. Some nearby towns have current free cash percentages much lower than that. The FinCom's plan would allow for budget increases over the next several years without having to ask permission from voters at the ballot box.
Range: $850K to $5M
The FinCom approach was not enough for many of the citizens who spoke during a nearly 90-minute discussion.
Former selectman George Harris responded by recommending that $5 million be returned to taxpayers immediately. Others pointed to reserve funds aside from free cash that could be tapped if required. Tony Boschetto, a CPA and Wayland resident who advocated tax relief in a recent Wayland Town Crier guest column, estimated total reserves at $15-20 million. FinCom members and selectmen disputed the figures.
(Reserves held by the Water Department, for example, are part of an enterprise fund supported by customers and thus unavailable for town use. Any declared excess in the overlay reserve account held by the Board of Assessors could eventually become free cash.)
The tax rate isn't the only determinant of owners' tax bills, but a notably high rate is widely considered a negative indicator for buyers and sellers. Some who spoke Monday night emphasized the need for relief by citing sales in their neighborhoods, in some cases houses selling for hundreds of thousands of dollars less than previous recent sales. Several local realtors were among the residents in the audience.
Officials didn't disagree with residents on the extent of the problem, but they asserted that an overreaction would create problems in the future. Their explanation goes something like this:
The town must have a balanced budget. To achieve that it must allocate enough money to cover unforeseen events. Therefore turning back a small percentage of a $70-million budget at the end of a fiscal year is a sign of prudence. Furthermore, a surplus in any given year can be caused by events that aren't likely to be repeated. A large immediate cut in the tax rate could lead to large increases in future years if expenses aren't cut.
On the other hand, some residents say that officials in recent years crossed the line between prudence and hoarding. Whatever the intent, they say, the result was stashing money and deciding against asking voters for overrides. Instead of amassing huge reserves, they say, give taxpayers the decision to say yes or no to overrides.
Donna Bouchard, who wrote a memo containing a wealth of financial detail that was acknowledged by officials as authoritative, told the Monday meeting that tax relief is "a one-time benefit for the town" and a "wonderful opportunity" at a time when some residents are hard-pressed and a double-dip recession is possible.
Selectmen said they hope that any Town Meeting article to reallocate free cash will be narrowly drawn so the entire budget won't be open to changes. (The citizens' petition does not call for reopening the entire budget but only adjusting the funding sources for already approved line items.)
The Oct. 11 Board of Selectmen meeting could be an indicator of the choices confronting Special Town Meeting voters.
-- Michael Short
The Oct.3 meeting is available at WayCAM: