Amherst is facing a major budget shortfall – again. Last Tuesday I went to a presentation by town, school, and library officials, plus our state representative and senator, about our predicament. According to the Finance Committee, the difference between the funds we know we will have and the cost of continuing to have the same services is about $3 million for the upcoming year.
If that were the whole picture, it would be bad enough. But it’s not. The next three years get worse and worse, unless there is a “robust” increase in Local Aid from the state. Since the new Governor has asked all his agency heads to produce budgets that cut five percent and ten percent from their budgets, large increases in Local Aid are unlikely.
The Finance Committee has been working diligently to produce information for decision makers -- officials and the tax paying public (us). A 29 page report on the Town’s website includes, among other things, a comparison of Amherst’s history and fiscal situation to other towns and the state as a whole. For example, one graph shows that while the average tax for a single family residence in Amherst has been consistently higher than the state average, the difference has grown, particularly starting in 2004. A table displaying the changes in the average evaluation and tax bills shows that between 2000 and 2007, single family houses in Amherst increased in value almost twice as fast as taxes; however, state-wide, houses increased in value half again as much as in Amherst, but the tax bills increased about as much (49.4% versus 46.1%). Other graphs show that there are towns where real estate taxes went up at a greater rate than in Amherst, and towns where they went up at a lower rate. We have not caught up to Longmeadow, although we seem to be gaining on it.
I commend the Finance Committee on its work, but we are missing the most importnat information. How do the incomes of people who pay real estate tax on their homes in Amherst compare to the incomes of people in Longmeadow? Or the other towns to which our taxes were compared? We should find out from census data, or offices at the University that study the state’s economy.
Services are delivered by people. In all these budgets the biggest costs are for those people. The biggest problem is rapidly increasing health costs. Neither of those is going to change. Unfortunately, it means when cuts have to be made, real people lose their jobs. Even if we get more state aid and pass an override, there will be cuts. The unions representing town and school employees are currently in negotiation for the next three year contract. I suggest they agree to skip cost of living (COLA) increases for a year or two. That would help save some jobs for union members, preserve some services, and demonstrate to the tax payers that everyone is making an effort.
Three years ago, the last time contracts were negotiated, we were facing hard times but the town had substantial financial reserves, built up over preceding years. The contracts agreed to reflected that fact. At the time they were being negotiated, I did a detailed comparison of Amherst contracts and those at the University of Massachusetts, the town’s largest employer. What I found was that Amherst paid better than the university and the difference was growing. A major reason was that most positions in town receive automatic “step” increases each year (the number of years varied by contract) in addition to the COLA. At the university, fewer employees had steps and the steps themselves were about half as large (averaging 2% instead of 4%-5%).
Since 2002, we have spent as much of our reserves as is prudent. We have also made cuts. But now we are down to the really hard ones. We need to bring in as much revenue as we can, insisting that the university and colleges pay for the services they receive, including fire, ambulance, and education for the children who live in family housing. We also need to make cuts as judiciously as we can. At some point, we will need to pass an override. But before anyone proposes it, we need to do all we can to reduce our expenses as well as to understand who the tax payers are and what their financial circumstances are. In other words, I’m less interested in how our tax rate compares to Longmeadow, than in how it compares to our incomes.