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Officials see little chance for tax hikes

By Rachel Lebeaux
Correspondent / January 15, 2009
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Despite facing hefty budget shortfalls in the midst of what many are calling the worst economic crisis since the Great Depression, officials in some area communities are already abandoning the idea of asking residents to approve tax increases this year through an override of the state's Proposition 2 1/2 law.

"Given the difficult economic uncertainties Medway will likely face, a Proposition 2 1/2 override would be too burdensome to consider," Medway's Board of Selectmen wrote in a letter to town department heads last month.

"Personally, I believe there is no prayer of going to the public in this economy, with everything else going on, and looking for an override," the board's chairman, Glenn Trindade, said recently.

Under the 1980 state law, municipal officials can increase annual property taxes by more than 2.5 percent only with the approval of voters.

More than 20 area communities placed override requests on their ballots last year; roughly half of them passed.

Higher taxes can be a difficult sell even in good economic times, officials said. This year, towns and cities face lower revenues from such items as motor vehicle excise taxes, and were warned by the state that local aid could dip by as much as 10 percent for the 2010 fiscal year, which starts July 1.

In Medway, which passed a $1.9 million override in 2004, projections show the town's revenues might fall about $600,000 short on an approximately $40 million budget, Trindade said. If the state cuts local aid by 10 percent, Medway's coffers could be down another $1 million.

Still, selectmen do not plan on asking residents for more money. "For better or for worse, we will have to live within the tax levy we have now, as well as whatever comes from state aid," he said.

The town has more than $1.7 million in free cash as well as $2 million in its stabilization account, the state-recommended 5 percent of the operating budget, Trindade said. But he added he is "adamant" that officials not do a wholesale raid of the accounts.

Balancing the budget "is going to mean some really hard decisions," Trindade warned, noting that there could be layoffs among town employees, including teachers and police officers.

When projected costs are exceeding a municipality's revenues, officials can ask residents for a permanent tax increase through a general operating override, or a temporary increase through a debt-exclusion override, which expires when a specific capital improvement or equipment purchase is paid off.

Last spring in Franklin, residents voted against a $2.8 million override, after approving a $2.7 million tax increase the year before. This year, a financial plan committee is preparing a three-year projection to better prepare for the town's fiscal needs. An initial draft should be available by early next month, according to the Town Council's vice chairwoman, Deborah Bartlett.

Bartlett wouldn't rule out the possibility of an override request, saying, "I don't think we're thinking that far ahead yet."

However, "it's hard to know, with everything so volatile at this point," she said. "I think people are scared . . . and we don't know how they will feel about committing to more money than they're currently committing."

It's clear that revenues in Franklin will once again fall short of expenses, Bartlett said, and "without more money, we're not going to be able to provide the same level of service as today."

Officials are searching for ways to consolidate services and save money, but "everything that's simple we've already done," she said.

In Ashland, where voters turned down overrides the past two years, leading to layoffs and the closure of most school libraries, the town's Finance Committee wrote a letter to department heads asking them to prepare level-service budgets for next year.

New initiatives can be outlined and justified separately, the letter stated, but "have in mind that, given our present financial constraints, any appropriation for new programs may impact the level of service provided by existing programs."

Town Manager John Petrin is meeting with department heads while assembling a preliminary plan for next year. Selectman Paul Monaco, the Ashland board's chairman, said a request for a Proposition 2 1/2 override is not likely.

"I would think the board would be extremely reluctant to put one on the table this year, based on the economic conditions and what's happened the past two years," Monaco said.

Wayland voters have been willing in the past to vote for tax increases, but town officials are not planning to ask for an override this year, said Michael Tichnor, chairman of the Board of Selectmen.

Last year, residents passed a $1.9 million operating override and a $1.93 million debt exclusion, which was used for town vehicles, buildings, and school technology equipment.

"It's been very difficult the past several years due to Proposition 2 1/2, as well as increases in healthcare, pensions, and utilities," Tichnor said.

Anticipating a $500,000 reduction in local aid for fiscal 2010, the town's Finance Committee is asking the School Committee and other town departments to trim their budgets by $350,000 and $150,000, respectively.

Wayland officials also are working with neighboring Sudbury to try to find shared efficiencies, Tichnor said.

"We've always been sensitive to property taxes in town," Tichnor said. "It's a brutal challenge."

In Weston, which passed a $1.2 million debt exclusion last year, "We don't anticipate an override this coming year," said Douglas Gillespie, chairman of the Board of Selectmen.

He credited the town's relatively healthy condition in large part to its joining the state's Group Insurance Commission, which Gillespie said should provide an initial savings of $1.5 million on healthcare premiums. "There are enough savings there to offset any budget issues," he said. Gillespie did not rule out another debt-exclusion request, which he said the town puts on the ballot nearly every year.

"We try to have a very open budget process, and the general attitude has been" that residents don't want to cut the level of services, he said. "Until the townspeople change that message, we're finding economies and not sacrificing service levels," he said.

But Gillespie still expressed caution about requesting a tax increase.

"The economy is what's going to change that attitude," he said. "This could be the spring that the discussion changes."

Meanwhile, in Marlborough, which has never had sought a Proposition 2 1/2 override, the financial picture is in "excellent shape" thanks in part to nearly $15 million in free cash and stabilization funds, said Arthur Vigeant, the City Council president.

"Obviously, we need to keep an eye on things, especially since we expect a $2 million to $3 million reduction in local aid," Vigeant said.

Marlborough, where the general budget is expected to come in around $125 million, "has been very fortunate and tight with the purse strings," he said.

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