Dire straits push town to its first override vote

Email|Print|Single Page| Text size + By Matt Gunderson
Globe Correspondent / June 19, 2008

This rural town on the edge of the New Hampshire border has never had a Proposition 2 1/2 override vote since the state law limiting property tax increases went into effect in 1982. But with the town facing a bleak financial situation this season, the years of respite are over.

Residents are preparing to vote next Monday on a $1 million override that has some seniors "terrified" about being forced out of town, said Sharon Mercurio, the local Council on Aging director. On top of that, officials are already projecting a $1.8 million deficit the following year - an even worse financial predicament than the current budget cycle - if the proposal to raise the local tax does not pass next week.

The town has passed numerous debt-exclusion measures in the past for capital projects that don't permanently raise the levy ceiling, but Monday's override vote has longer-term implications. Under the Proposition 2 1/2 statute, towns cannot raise property taxes by more than 2.5 percent annually, factoring in new growth, unless voters sanction an override at a Town Meeting and at the polls. The proposal before voters seeks to increase the town's levy limit by $1 million.

Pepperell's predicament is a familiar one across the state this year, as some 40 communities seek overrides to increase their levy ceilings amid hard times, said Geoff Beckwith, director of the Massachusetts Municipal Association. Of the 34 or so communities that have acted on overrides so far this year, about half of them have passed, he said.

The difficult fiscal situations have pushed a number of communities like Pepperell into override mode for the first time, illustrating an unhealthy economic movement across the state, added Beckwith. "Reliance on overrides and increasing reliance on property taxes is not a good trend for communities," he said.

Beckwith said his organization, in addition to advocating for more local aid for cities and towns, is pushing state legislators to allow communities to impose local restaurant meal and hotel taxes, for additional revenues. The state collects taxes from these sources now, but the communities don't see any of this money, he said.

Town Administrator Robert Hanson said he believes Pepperell had been able to avoid an override for many years because of the town's prudent fiscal management and tight-fisted spending. But the fiscal conservatism has been unable to avert the snowballing impact of a stumbling economy, he said.

Excise taxes and new residential growth have plummeted in the last year, creating a tailspin of economic forces pushing the town down, Hanson said. On top of that, the town's gas, electric, and health insurance costs have mushroomed, he added.

"There's been no new growth," said Hanson. "And people aren't buying the big luxury cars that bring in the big excises, so you are also losing money there."

For an average-priced home of $350,000, the proposed override would raise the local tax bill by about $250, Hanson said.

For many seniors in town, the hike would be exorbitant, as their gas, heating, and electrical costs continue to soar, said Mercurio.

"Social Security [payment] isn't going up," she said. "A lot of them are fearful of losing their homes."

Local senior Ann O'Donnell said she knows of several elderly residents who might be forced out of town if the override passes. She said she doesn't blame the town so much as the state, which, she says, needs to start kicking more money back to cities and towns in the form of local aid.

"I think we need to talk to the representatives," said O'Donnell. "That's the only solution."

If the override fails on Monday, town officials would hold a special Town Meeting to either use stabilization funding to cover the $1 million deficit, or to make cuts to the town budget, said Hanson.

The latter scenario wouldn't be pretty, Hanson said.

"The cuts are going to be severe," he said.

Matt Gunderson can be reached at

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