The more that I review information about school and town finances, the more I’m convinced that our problem isn’t our expenses but rather our lack of revenue, including diversified revenue sources. As mentioned in past articles, the district has seen state aid for education essentially flip-flop since 2003 going from 60 percent state and 40 percent local to 40 percent state and 60 percent local. This means that our revenue source from the state has not kept up with expenditures and has forced us to look for additional revenue from our member towns. This has happened, despite the district’s budget being less than it was in 2003 (meaning that the district has not simply transferred the loss of revenue to the towns but rather has cut expenses dramatically over the years). As we’ve tightened up the budget, it has also reduced our Excess and Deficiency (E&D) fund meaning that the district has less money remaining to offset town assessments. Thus the cost of education to the towns has actually decreased as a percentage of total town expenditures proving that the schools are not the primary driving factor in town tax increases. In fact, according to the Pioneer Institute, in total our towns spend less on education than over 90 percent of the 351 cities and towns in Massachusetts.
In fact, although town expenditures have climbed significantly faster than school expenditures, our aggregate town spending on town services also ranks quite low in the state (by Pioneer Institute data, our aggregate spending on town services also ranks lower than over 90 percent of cities and towns in Massachusetts).
These low expenditures for both the schools and towns is of course reflected in our tax collections and residential tax levy, both also lower than more than 90 percent of cities and towns in Massachusetts. In fact, according to the Department of Revenue (DOR) and the Pioneer Institute data, our average per capita income and average per household property tax bills are lower than 70% of the 351 Massachusetts cities and towns, yet our towns have greater financial resources available to them than nearly 85% of all cities and towns in Massachusetts. In part this means our towns have been putting money into ‘savings’ at a greater rate than the majority of other municipalities in the state, thus proving to be fiscally prudent and protecting against emergencies.
The problem in all of this is that we’re still collecting the majority of town income from residential property taxes and individual excise taxes and thus have a projected total new growth rate that is also lower than nearly 90% of all Massachusetts cities and towns. You only have to look at the shuttered mills in our towns, the closing of local businesses, and the decline in job opportunities within our towns to see that it wasn’t always this way – once upon a time, these towns were thriving communities.
While we should continue to look at efficiencies in school and town services, it is simplistic to think that the solution to our economic malaise is to count on decreasing our budget expenditures to make up for the lack of a tax base. That’s the cause of our inability to fund needed infrastructure improvements and provide services that may increase our attraction to individuals and businesses. What we need is action: action to bring broadband to our homes and businesses; action to make our towns more enticing to businesses; action to make our towns more attractive for investing; action to make our towns more attractive to visitors and tourists; and action to diversify our revenue sources. The school district stands ready to assist in addressing these needs in our towns and will be addressing how our own revenue sources can be both increased and diversified to begin solving the problem of revenues.
