In the past 18 years, Harvard has approved a total of 19 overrides to meet its annual budget. Only 16 of the 351 communities in Massachusetts have passed more; 100 communities have needed none. And the pace is picking up in Harvard—overrides were needed in five of the last seven years alone. What is it about Harvard and the way it structures its operations and finances that causes us to face such deficits year after year after year?
To answer this strategic question, Town Administrator Tim Bragan proposed the formation of an independent task force last spring. The selectmen, Finance Committee, and School Committee agreed, and the Financial Impact Analysis Team (FIAT) was created. The team spent a year analyzing the causes of Harvard’s structural deficit and what could be done about it. Their work is complete, and the resulting 46-page report can be found on the town website.
In a nutshell, what the FIAT found was that the town’s structural deficit is far more a function of revenue shortfall than a problem of uncontrolled growth or wasteful spending. To be sure, there are many strategic opportunities for more efficient and effective operations. And the town leadership deserves kudos for exploring and implementing many of the ideas that came from FIAT discussions. Many of them will provide immediate relief this year and for the near future. But, as noted in the report, optimizing the spending structure by itself is just a stopgap measure; the deficit gap will continue to widen unless we also expand our revenue sources.
In fiscal 2009, 72 percent of the town’s budget is funded through property taxes. And of that 72 percent, residences foot 96 percent of the total, with businesses contributing only 3.4 percent. In contrast, towns and cities across Massachusetts have commercial and industrial developments that, on average, comprise 14 percent of the tax base—four times that of Harvard.
Why does Harvard have such a high residential tax burden and such a low commercial tax contribution compared to others? Because we have chosen to favor residential development over commercial development. Every master plan created for the town since 1969 has pointed out the long-term advantages of additional commercial development to achieve a more balanced tax base. But we’ve consciously rejected that strategy, and instead have decided to eliminate the industrial district and shrink the commercial district, significantly restrict the amount and types of development that can occur in the commercial district, and effectively bar all types of residential development except single-family homes on large lots. By doing so, the town has attracted the type of development that is the most costly to service—single-family homes that appeal to families seeking high-performing schools.
Consider this: on average, commercial and industrial properties consume only 28 cents in services for every dollar they pay in taxes, while single-family residences typically consume $1.71 in services for each dollar they pay in taxes. Can Devens solve this revenue problem? Maybe, but the issue with relying on Devens is that we are still far from understanding just what we will get (if anything) or when we will get it.
For these reasons the FIAT has proposed Warrant Article 22 which would form an Economic Development Analysis Team (EDAT) to develop the revenue potential within Harvard’s existing commercial district. We believe that the EDAT could chart a course for responsible, smart commercial growth by working to define objective commercial needs and a plan for attracting business to meet those needs. This is much more than a zoning issue, but rather involves considering what kind of commercial development we desire (e.g. a supermarket or a pharmacy), and then identifying all of the issues that need resolution to facilitate such development. This approach provides us with the opportunity to control our own destiny by deciding what businesses we want to attract—the ones that give us the local services we are currently lacking and the ones that give us the best revenue-versus-expense tradeoff.
And just what is the potential revenue gain from commercial development? The 2002 master plan estimated that our existing commercial district could support 6.5 times our current commercial floor space. But let’s think smaller. If we merely doubled our commercial/industrial tax base (still much less than everyone else on average), we could generate another $655,000 in revenue—more than three times the fiscal 2009 override.
This is not a call to do yet another study to gather dust on the shelf. Rather, it is a call to take the first step toward defining and implementing an action plan for the thoughtful development of our town’s commercial district.
It is important that residents vote for this article only if they really believe we need to make a change, and are really ready to support a well-reasoned proposal 12 months from now. The town should not waste volunteer time and effort to create a plan if voters are not willing to consider any meaningful changes in our land use strategy.
A vote against this article is a vote against change and a vote to keep increasing residential property taxes through perpetual overrides to pay for town and school services.
Harvard has a serious, long-term financial problem; our educational quality and public services cannot be sustained based on the current revenue stream. We know the state can’t bail us out; we have no idea how, when, or even if Devens can bail us out. We can’t just save our way out of it for the long term. Hence, we have a critical choice in front of us: perpetuate the current land-use pattern of the town and be prepared to pay for it with an ever-escalating residential tax burden driven by frequent overrides, or accept some measured but permanent changes to our commercial district to create a more balanced tax base that reduces the residential tax burden. Residents should choose wisely, and stay committed to that choice.
Bill Johnson is the vice-chairman of the Harvard Financial Impact Analysis Team
