Two topics of concern emerged at the Finance Committee’s budget forum Tuesday night: the sustainability of annual payroll cost increases of around 6 percent, and the role of the Finance Committee in regard to warrant articles 5, 6, and 7 for new programs from the selectmen, the Library Trustees and the School Committee, respectively. Most of the forum attendees were from other town boards, with just a sprinkling of civic-minded citizens.
Bragan provides financial context
Town Administrator Tim Bragan kicked off the meeting with a summary of the projected revenues and spending that resulted in the $786,000 Proposition 2½ override question for the town election on April 1.
In his “state of the state and town” commentary, Bragan spoke of the unresolved battle at the state level to fund local aid to cities and towns, with Gov. Deval Patrick hoping to rely on gaming and gambling to boost local aid, and Speaker of the House Sal DiMasi dead set against that approach. This debate, plus the downward moving state economy, resulted in a decision by town officials to budget a very modest increase in local aid for fiscal year 2009.
Not all the news from the state was bad news. Bragan explained that the double-digit increases to health insurance originally projected during budget planning never came to fruition as they have in previous years. According to Finance Director Lorraine Leonard, the actual increase is only 5 percent. This unexpected savings brought the overall override number down from the $934,600 estimate of a month ago.
As projected, local aid will account for 19 percent of the overall revenue for the town, which is only slightly higher than the five-year average of 18 percent, but well below the 26 percent of fiscal 2003. That was the last year before the 2000 Census results, which reflected changes in population and demographics, caught up with Harvard.
At the town level, according to Bragan, the remaining 81 percent of overall revenue is made up of 73 percent real estate taxes and 8 percent local receipts from excise taxes, fees, permits and licenses. He said that, compared to the fiscal 2008 11 percent increase in revenue from real estate taxes, they are projecting only a 7.5 percent increase for fiscal 2009. He said that the excise tax, the next largest revenue source after property taxes, is supposed to be in an “up” year in its cycle, but is in fact showing a decrease in the number of bills sent out and in total revenue.
The realities of Harvard’s budget
Finance Committee Chairwoman Debbie Ricci summarized the fiscal 2009 spending increases, not including the new spending requests in Articles 5, 6 and 7. Town and school salaries and wages increased $626,000; $153,000 increase to benefits, and a $20,000 increase to the cost of retired teacher benefits. Out-of-district Special Education expenses went up $111,000, energy $47,000, and all other costs $70,000.
Ricci said that the cost of personnel for the schools increased almost $500,000, without any new hires. When asked by resident Paul Green about the average salary increase across the whole town, Ricci replied 5.8 percent.
“Can we expect the same increases looking forward?” asked Green.
Ricci said that it has been around 6 percent the last few years and that her committee has been using 6.5 percent for planning purposes.
“It’s not sustainable, or am I missing something?” Green responded.
“No, you’re not,” agreed Finance Committee member Steve Colwell.
Override figures
Ricci explained the components of the $786,000 override to be voted at the Town Election:
- $484,000 to maintain level services
- $200,000 to build in the fiscal 2008 salary increases funded from free cash by a vote at Special Town Meeting last fall
- $102,000 for new programs to be voted separately in Articles 5, 6 and 7 at Town Meeting
Voting the override
If the omnibus budget, which has a shortfall of $684,000, and the three articles totaling $102,000 all pass at Town Meeting, their implementation is contingent on passage of the override at the polls.
Ricci said that if any of the three articles should fail to get voter approval, residents would only be taxed up to the amount that did pass at Town Meeting. Explaining her committee’s “no position” on the three articles, she said, “They are basically for new programs and we’ve decided that we should let the taxpayers make this decision. We’re increasing the structural deficit we already have.”
Override articles
The new programs consist of $12,505 to add 10 hours per week to the Council on Aging (COA) director’s current 30 per week; $15,715 to fund after-school monitors and substitute coverage for paid leaves at the public library; and $73,780 for school personnel and books. Superintendent Thomas Jefferson further defined the school request as roughly $55,000 to fund a new special education teaching position, plus about $10,000 in benefit costs for that position, and $9,000 for new textbook costs.
Although the Finance Committee is stating “no position” instead of making a recommendation on the three articles as is customary, the committee has written introductory commentary and “pros” and “cons” for each article. In the case of the COA and library requests, the commentary starts by explaining the committee’s concern with the “ever-increasing personnel costs in our budget and the continual need for large overrides,” and states the committee’s belief that “the taxpayers should have the opportunity to vote on whether or not to increase programs that add to our basic infrastructure.”
COA Chairwoman Carlene Phillips was clearly upset about the choice of wording in the “cons” for Article 5.
“You’re giving a bias—I feel totally broadsided,” she said. Particularly angry about the statement that “COA staff time has almost tripled since 2005,” Phillips complained that this missed the whole context. “We’ve been playing catch-up,” she said.
Library Trustee Roy Moffa was equally angry about the Article 6 commentary, which suggests the library did not account in its planning for the effect of the larger space on staffing needs.
He said that the words are misleading and that they never had a chance to comment on them.
“Words do matter,” he said, “because they come from you and you put it in print.”
FinCom position
This discussion prompted Paul Green to ask if the Finance Committee, Board of Selectmen, and School Committee were going to be in agreement on supporting the override at Town Meeting.
“I’m asking for a preview,” he said, “Things go better when the town is together.”
Ricci said that the Finance Committee has not actually voted on whether to support the override. When the members voted to take “no position” on the three articles, they were assuming two overrides, one for $634,000 and the second for $102,000. Now that the selectmen have chosen a single override number that includes the funding for the three articles, the Finance Committee would be in some way supporting the articles by supporting the override.
