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Dear Select Board: Consider this override solution

prop2.5 250

Arlington's annual budget season has begun, and the town's Finance Committee faces two nights a week of scrutinizing town budget proposals until it issues its report to Town Meeting in April. That work has continued since 1895, when the town was much smaller. It has continued after 1980, when it was much larger and when Proposition 2 1/2 set limits on town spending

The Fincom's work continues now in the face of a looming override when voters are asked to fill in the town's funding gap. The amount has yet to be determined, but you see when red ink occurs, as projected by the Jan. 18 spreadsheet presented to the Long Range Planning Committee.

Whether the Select Board calls for an override this year or next likely depends on the amount of state aid allotted to Arlington in Gov. Healy's budget, Town Manager Sandy Pooler says. 

The amount of that aid won't be known until about March 1, but Healy told members of the Mass. Municipal Association last Friday that she will try to provie aid estimates earlier. Right now, state revenues have risen an estimated $540 million higher than last year, according to some sources. Consider the size of the state's "rainy-day fund," reported here >> and here >>

While we wait, I urge the members of Select Board to pay heed to a suggestion about how to control an override.

Foskett's comments

Offering that advice was Charles T. Foskett, then-chair of the Finance Committee, in the Fincom's report to the 2022 Town Meeting. He began with the good news:

"Arlington’s long-range planning process has been from one viewpoint, a success. It has provided fiscal stability that we lacked in the early 2000s, avoiding the threat of annual overrides inflicting on both town and school staff the anxiety of job insecurity, and allowing elected town and school officials, executive leadership and department heads an orderly environment for planning and delivering town services."

He followed with what he sees as a problem:

"From another viewpoint, the process has become problematic, demanding more frequent and/or larger overrides. This arises from an underlying principle in the planning process that allows the assumption of a long-term spending rate that is higher than the annual taxes that are collected in a given year.

"The plan assumes that town budgets can grow at 3.25% per year, and that school budgets can grow at 3.5% per year for general education and 7% per year for special education."

Some assumptions

Do these assumptions, developed since the 2011 override, hold up? Officials involved, including the Select Board, need to discuss that.

Foskett continues: "Arlington has a new superintendent of schools and later this year will have a new town manager. Perhaps this is an opportunity to rethink our planning approach."

This leads to the Fincom chair's idea:

"One path might be to start off with a buffer reserve from the upcoming override. Then, in the plan for each fiscal year, allow the budget in an upcoming fiscal year to grow only by as much as the revenue-collection increase of the prior year, comprising the increase in base nonexempt tax-revenue growth, new-building tax growth, local receipts growth and growth in state aid (Chapter 70 and unrestricted government aid) or a planned number, whichever is lower."

The Select Board should discuss this as a possible direction for fiscal policy.


Why follow this path? Foskett explains: "This growth will have been previously collected and be in a reserve fund, thus the increase is already funded."

He allows for two exceptions -- student population growth and increases in health insurance, "which could be addressed by overrides when necessary.

"An approach like this would require focus on efficiency by both town and school management and could mitigate the much-discussed 'structural deficit.'”

I encourage the members of the Select Board to step up and place this on a future meeting for discussion.

 Jan. 5, 2023: Fincom prepares for its annual budget scrutiny

This opinion by YourArlington Editor Bob Sprague was published Tuesday, Jan. 24, 2023. The source for the chart is the U.S. Census Bureau data from State & Local Government Finance Data Query System. It shows that before Proposition 2 1/2, state taxes exceeded the national average but local-government spending did not.

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