Last night, through a one-sentence memorandum directed to Superintendent Jay Cummings, the Town Administrator informed the School Committee that he was allocating to the schools a 4% budget increase for FY19. This is just over half of the 7.3% increase that Superintendent Jay Cummings says is needed to provide a “level service” budget, and well below the 5.25% the parties agreed upon after the 2014 override was passed. While the 4% budget increase represents $1.33 million dollars in new funds, it shorts the schools $1.1 million dollars needed to provide the schools the same level of service next year as they are providing right now.
While there are certainly avenues that the schools can explore to make up a portion of that gap, such as adding athletic fees, the schools still will be significantly short on funds next year. This will, in all likelihood as things stand right now, result in a reduction of 16 full time positions within the school department. And that’s just for next year. Based on reasonable financial projections, things will get worse in FY20.
Long time readers of this blog will not be surprised by this. While certain Selectmen have been telling town residents that we are in “great financial shape” for years, I’ve been trying to tell town tax payers that we have been running a structural deficit and this outcome was inevitable. While certain Selectman told you we “fixed” our financial issues with the 2014 override, I knew that the reality was that the override simply papered-over a hole that never went away. When I brought all of this up to the Selectmen at the November, 2016, joint meeting with the Board of Selectmen, the Town Moderator and the Finance Committee, I was shouted down, told I was wrong, told that we weren’t running out of money, and that I should stop scaring people.
But never was I trying to “scare” people. Like many of you, I have kids in this school system, and their futures are tied to the quality of this school system. The quality of the school system is dependent on the investment the community makes in it. The community’s investment in the school system likely will depend on whether they believe that their government is responsible with their money. So, if you were told for years that things were fine, and now are suddenly not, would you think that your government has been responsible with your money? Probably not. Would you want to give them even more?
So, I ably predicted all of this a couple years back. So what? It’s like predicting two plus two is going to equal four. It always was just a math problem. When 80% of your budget is salaries, and those salaries are increasing at over 4%, but you only bring in 2.8% a year in new money, you’re eventually going to be in trouble.
But here’s another prediction: the same Selectmen who told you that we’re in great financial shape and that things were fixed back in 2014 will reliably lay the blame for our current predicament at the feet of the school committee.
Here’s why that’s wrong.
It’s no secret where the override money went and what the cost drivers are. 80% of our budget is salaries and compensation. Salaries increase at over 4%. Healthcare increases at 6% if we’re lucky. Unfunded mandates from Beacon Hill, like special education, increase annually in some cases well over 6%.
So, when an opportunity comes along to establish salary levels that are within our means, the town should, with a united front, present all of the stake holders with budget projections showing just how little money the town has to spend on salary increases given healthcare increases, the rising cost of unfunded mandates, and capital needs.
Did we do that when the Grafton Teachers Association contract came up last winter? No, of course not. The Selectmen continued to tell people we were in great financial shape, and even dragged the town’s auditor, Shawn Scanlon, in to tell us we weren’t running a structural deficit. In the meantime, having informed the world at large that we were flush with cash, the Selectmen left the school committee to negotiate a new contract with teachers who were seeking 3% annual cost of living increases, which would get tacked on to annual step and lane increases, totaling compensation increases well beyond our means.
Having totally been left hanging out to dry by the administration, the school committee negotiated for 2% annual COLA increase. Still more money than we could afford, but less than the teachers wanted. But what was their leverage when the administration was telling people that there’s nothing to worry about?
It was all an enormous missed opportunity. We had a chance to demonstrate fiscal responsibility, and not only get public buy-in, but employee buy-in as well, by being open and honest about the situation. The Selectmen, through the town administrator, should have been party to those negotiations, and should have presented FinComm’s message that our long term situation was dire. But they blew it.
Prediction number two: you will be told not to worry because economic development will save us! I have my doubts.
When I ran for Selectman two years ago, we talked about increasing economic development. During the school committee race last year, they talked about increasing economic development. Whoever runs for Selectman this year will talk about increasing economic development.
If only talking about it made it so. The truth is that economic development requires a lot of work and not just a little bit of luck. If attracting a large tenant up off of Route 30 were something this administration could easily accomplish it would have done so already. Amazon isn’t walking through that door folks.
Recently, FinComm worked with the administration to come up with five-year financial projections. The projections for FY21 and FY22 showed seven figure budget deficits for the town. The administration revised the projections to show $1,000,000 in “new growth” for those years which miraculously made the numbers work. Could we generate $1,000,000 in new growth for two straight years? Well, if we did, it would mean making $43 million dollars in property improvements annually, without resort to tax increment financing, commonly referred to as a TIF. If Tim McInerney can pull that off, I’ll nominate him for town executive of the year.
Prediction number three: you’ll be asked to contribute more money through an operating override, either this year or next. This on the heels of a tax law that will prevent some of you for taking a deduction for your local property taxes.
This one is hard for me. On the one hand, like I said, I have kids in the system. They didn’t create this mess, but they’ll be punished for it all the same unless something changes.
On the other hand, I need to hear some very real concessions from the Board of Selectmen before I’d support another override. I would need to hear that they understand that structural deficits are real, and that we’re going to adopt policies with the assistance of the Finance Committee that will be aimed at controlling the costs we can control.
I’d need to hear from the administration that budget projections are important and should be done conservatively. In a Finance Committee meeting this fall, the Assistant Town Administrator questioned the value of five-year financial projections, saying, “We either have money or we don’t.” This needs to stop.
I would need to hear from them that we’re going to start holding state representatives and senators accountable for the costs of unfunded mandates. Yes, we should absolutely fund special education. It is a moral and social imperative. But Beacon Hill should be picking up any cost increase above 2.5%. Limiting revenue and mandating costs is a sure way to increase property taxes, which are regressive and pit our poorest residents (typically seniors) against our neediest residents (typically kids).
Finally, I’d need to hear from town leaders, or aspiring town leaders, who understand how budgets work and are willing to deal in specific solutions, and not general platitudes. No more telling us we’re in great financial shape. No more telling us you’re going to “talk to people” about this problem. No more one-sentence memos delivering soul-crushing news. No more touting the Government Finance Officers Association (GFOA) Distinguished Budget Presentation Award, without actually adhering to most of the GFOA recommended fiscal policies and practices. No more hording credit and dispersing blame.
The Buck stops with the Board. It’s time for them to take ownership of this mess and come up with a plan.