A question has been gnawing at me for a few days now, and it’s burrowed itself into the back of my mind like a tick.
The question was posed on the Grafton News Facebook page, after the Grafton News ran a story detailing possible school position layoffs in fiscal year 2019, coming just nine months after the Grafton Teachers’ Association (GTA) and the school committee agreed on a new contract giving the teachers a 2.4% cost of living (COLA) raise retroactively for FY17, and then 2% COLA increase per year through FY20.
The question posed was this: “Simple question, if you don’t have enough money to pay for what you have how can you give raises?”
Dammit, that’s such a simple and great question. The really short and simple answer to that simple question is that the government fiscal apparatus is designed in such a way as to make common sense management of income, costs and expenses nearly impossible.
Why is this?
Boil spending decisions down to their most basic elements: You have your income and your expenses. Because of Proposition 2.5, the amount of money a town can raise in income every year increases by roughly 2.8%, give or take, which is a 2.5% increase in your levy (tax) capacity, plus whatever income you generate in new growth. This is mandated by the Commonwealth of Massachusetts, and there ain’t a damn thing we can really do about it. The communities that have thrived since the implementation of Prop 2.5 tend to have wealthy residents who own expensive homes, a thriving industrial or commercial tax base, and the capacity for new growth. By and large, we’re somewhat deficient on all of those things. We’ve got a little wealth, growth and business… but we could use much more.
Conversely, while our income is limited, our expenses are not. Ideally, if you wanted to run a community that never had to propose an override, you’d set your expense side growth at 2.8% and forget it. But we can’t do that because we’re subject to the same laws of capitalism that private enterprise is.
Healthcare is expensive everywhere, and our costs increase by at least 6% annually. You wonder why we give teachers raises when we know we’re running out of money? Because we want to be able to compete with other communities to hire good teachers, and retain the good ones we already have.
And then there are the costs that the state mandates for us. Special education is an enormous cost driver for communities. It is right and just that we provide special education students with the best education and environment possible. But we didn’t have that mandate in 1980 when Prop. 2.5 was passed. It’s a different world now, and it’s crushing communities around Massachusetts.
[Note to Charlie Baker and Democratic Gubernatorial candidates: I don’t care about your thoughts on Donald Trump. I want to know what you’re going to do about unfunded local mandates.]
Ironically, Massachusetts communities are caught between the twin pillars of conservative economic policy in this state: adherence to free market principles, but a mandate for limiting taxes locally. If Beacon Hill is going to artificially limited our income, but mandate certain expenses, the least it can do is foot the tab for the parts of those expenses that never were meant to be fit under Prop. 2.5.