Services depend on tax hike OK, officials say

By John Laidler
Globe Correspondent / March 27, 2011

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Voters Tuesday will consider a proposed tax increase that Winchester officials say is needed to ease cuts to town services next year and avoid deeper cuts in fiscal 2013 and 2014.

The $1.44 million Proposition 2 1/2 override on the town election ballot would permanently raise the town’s annual property tax cap to help fund general operating expenses in various town departments.

The override, backed by selectmen and the school and finance committees, would add $204 next fiscal year to the tax bill of an average single-family home valued at $757,000.

Town officials say the override is critical to Winchester’s ability to keep its level of services largely intact at a time when the town, despite years of economizing, is seeing its costs rising faster than revenues.

The town’s administration recently prepared alternative three-year plans to stabilize Winchester’s finances, one that includes the override and one that does not. Both plans call for service cuts and greater efficiencies, but the level of cuts would be much deeper without the tax increase.

Mark Twogood, the assistant town manager, said that given rising health care and other costs, the town could not achieve enough savings to avoid major service reductions without an override. He and acting town manager Mary Ellen Landon prepared the three-year plans and have endorsed the override.

“We feel in order to preserve those services that these additional funds are needed,’’ Twogood said.

The vote marks the second time this year that Winchester has taken up a proposal to exceed the limits of Proposition 2 1/2, the state law that caps a municipality’s annual tax increase at 2.5 percent plus revenue from new growth.

In January, voters approved an $18 million debt exclusion, temporarily raising the tax cap to repay debt on the project to build a new Vinson-Owen elementary school. That vote added $106 to $211 per year for the next 25 years for the average single-family home’s bill.

Unlike the case for the January vote when there were organized committees for and against the debt exclusion, there is only a vote-yes committee this time.

But Town Meeting member John Natale, who chaired the group that opposed the debt exclusion, said he opposes the current override plan for similar reasons.

“Like everyone else, the town has to live within its means,’’ he said.

Natale said that is not the case now, citing what he calls excessive salaries and overly generous benefit packages for town employees compared with the private sector, and Town Meeting’s vote about a year ago to spend $984,000 on a new ladder truck he contends the town did not need.

“I think Winchester and Massachusetts and the US government have to be more frugal and make things work and use them,’’ he said. “We just can’t spend money we don’t have.’’

But Twogood said that over the past 20 years, the town has seen significant cost reductions.

“The DPW is half the size of what it was back 15 years ago. There’s been substantial reductions in Town Hall staff,’’ he said.

Twogood said that despite negotiated union health concessions, Winchester faces a 9.4 percent, or approximately $900,000, increase in health insurance costs next fiscal year.

The budget also must absorb higher costs associated with special education and rising school enrollment. The town anticipates a $250,000 drop in state aid, and estimated local revenues are largely flat.

Defeat of the override would result in a fiscal 2012 budget $728,000 below what is needed to maintain existing services, $380,000 of that on the school side, according to Twogood.

On the municipal side, the result would be the elimination of the equivalent of three full-time jobs and cuts in overtime in the police and fire departments that could reduce shift coverage. The schools would need to cut the equivalent of 3.5 full-time teaching positions, according to School Committee chairwoman Sarah Girotti.

Should the override pass, the selectmen’s plan calls for restoring $545,000 of the cuts, including all of the school money but none of the three jobs on the general government side.

The remainder of the $1.44 million would be placed in reserve for the next two fiscal years.

Any budget decisions ultimately rest with Town Meeting, which convenes April 25.

Twogood said defeat of the override would require another $2.5 million in cuts in fiscal 2013 and 2014. The School Department alone is projecting the loss of 24.5 full-time equivalent jobs during those two years, according to Girotti.

Thomas Howley, chairman of the Board of Selectmen, said having multiyear plans in place that provided for cost savings and protection of the town’s cash reserves was key for the board in supporting an override.

Officials say that protecting the town’s cash reserves is a key to maintaining Winchester’s Aaa bond rating from Moody’s.

“We would never have decided to request additional tax revenue from the citizens of Winchester unless we had first taken care of those elements,’’ Howley said. “If additional revenues are not there, the cuts have to be substantial.’’