Big surprise, our local budget is a hot topic in our current local elections. I listened to neighbors from both sides (pun intended, one lives to the left, and the other lives to the right) tell me about what was going on. Our local newspaper had a good article about the fuss. But, one official interviewed really got my attention! They said that our local real estate tax had been going up, and would continue to go up in the future, at the MAXIMUM legal rate, every year! Doesn't that get your attention?
I have updated my numbers, and I have come to some conclusions. First - the increase in costs has been very significant. Revenue has had to increase to match it. If you look at those graphs alone, you might be right to feel a little panic. I know I did. But I still wanted to know what this meant to me. So, I translated all the numbers that are being tossed around into something I can grasp - what it will cost me. Last year my taxes were close to 1.5% of my property value. For every 100,000 of my house value, that means I paid $1,547. Since my house is valued at $300K, I paid 3 times that, or about $4600. In another ten years, at the maximum rate of increase, I will be paying about $6,000 dollars. Assuming my house value does not go up, which today seems to be a reasonable assumption. I do not believe you will find many residents of Harvard who will be hurt by paying out another 1500 dollars. Still, the dramatic rise in costs is more than worthy of attention.
Another conclusion I have reached is that the Selectmen who are groaning loudest about what we are spending are also the most responsible for the position we find ourselves in today. This is also true for the candidate who is groaning right along with those Selectmen. Remember, this group has been in the majority for many years. You know the saying "Penny-wise, and pound foolish". After having looked at 30 years of annual reports, it looks to me like that is a good description of this group. They are postponing necessary maintenance, "nickle and diming" legitimate spending, when they would be getting better return in the long run by showing more concern for long-term thinking.
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Initially, I wondered what the numbers really were. I figured they might tell me something. I went down to the library, and pulled out town records. Let's take a look at what I saw.
Ok - so here are the tax rates for the last 25 years (orange line). We only this year got back to the previously highest rate - from more than 10 years ago. The blue line is property valuations. Note that these have gone stagnant over the past few years. This is important to pay attention to. {On 17 May I updated these graphs. They now read left-to-right, just as we are accustomed to!}
Now let's look at our spending. The next two graphs only go back 10 years, but we get the idea.
General fund spending is all the stuff we want our city to do. Police, fire, trash, water, roads, building maintenance, town government, etc. Schools are our biggest expense category. Notice that general expenses and school expenses continue to rise.
Here you see our revenue by source - property tax, local fees and licenses (the biggest contributor to this is car tags), and money received from the state.
I had been told one reason we were having money trouble was because we were getting less from the state. The numbers I see make me think this isn't a very big part of the problem. Relative to total income, what we get from the state is pretty stable. The local revenue is from town car tags, trash fees, fines, tickets, licenses - stuff like that. It is also pretty stable.
Now I can see why the town official said what they did. The graphs tells us a lot. Cost is going up. Income from fees and licenses is stable. Income from the state is stable. Property values have gone stagnant. Which means there are only two ways to pay for the increasing cost. One is to borrow more, and the second is to continue to raise property taxes.
What does this really mean to me? Remember the numbers that showed how much I would pay? Here they are in a graph. {This graph still reads right-to-left. But see my next post. I think that is more useful to understand what we are looking at.}
Since 1960, the town of Harvard has completely changed. In 1960, there were about 1,000 people in our village. Today there are more than 5,000. New properties have been built, and values have increased. In the chart above, we can see the affect of that - a relatively constant growth in value.
One of the reasons I got involved in this was because our Town Hall has become a point of contention in this debate. People are disagreeing on how much should be spent to renovate the town hall. Over the past 50 years, some temporary measures have been taken to accomodate our growth. Some of them were meant to be - or should have been meant to be - temporary. Some were short-sighted.
Our town hall has some extremely critical condition issues. These are serious problems which could result in loss of the town hall altogether if they are not taken care of. The exterior envelope has major issues. Moisture is getting in to the frame of the building. One can not tell the extent of the current damage from these conditions until after work will have started. I think most people are already aware of this. The Town Hall has been subject to deferred maintenance for more than 50 years. How else can you explain that, in this day, the walls are not insulated! I do not think you can find a single standing house in our town that you could say the same thing about. It has also been the object of temporary measures that have begun to take on an air of permanence, because of the simple fact that they have been in place for so long. One example of this is the temporary office structures on the 2nd floor of the town hall. The town hall has also been the subject of some bad spending decisions. I refer here to the addition put on some years ago, that is now the cause of greater maintenance issues.
So, recently, our Town Selectmen got various possible plans evaluated about how to manage the cost of the town hall. I was raised in the tradition of: "Use it up, wear it out, make it do, or do without." One took care of their tools. It is not a throw-away position. The Town Hall is one of the town's tools. It needs to be appropriately taken care of.
Now, if my memory serves me, we had basically three or four scenarios brought to us. One was cheaper - but not by much. Two were in the middle, and the last was more expensive. Our town voted already for one of the two plans in the middle. Maybe we should change our minds, maybe we shouldn't - but if that cheap plan does not take care of the maintenance issues, it is false economy! The people who are saying we should stick to the renovation we already voted to do, are saying that the cost difference, between the cheap plan and the plan our town voted in, is not significant in the big picture. Frankly, the numbers back them up.
The town has other needs that are being stuck, today, on the town hall, too - with predictably bad results. Records storage is a major problem. Our town is 5 times the size it was 50 years ago - and our space needs reflect that. If we do not exercise foresight now, we will pay a greater price 10 years down the road! We are seeing this today because maintenance was deferred in years past.
I think the folks who are shouting about the tax levy are right to be worried about it. But from talking to both sides, I also think BOTH sides are worried about this. I don't think we have anyone in the public discussion who is NOT worried about it - although the shouting people would like us to believe that there are people in the public debate who are not worried about these financial issues. We know that school costs will continue to rise, year by year. Increasing insurance rates, medical costs, and fuel costs are examples of pressures that keep general costs rising. Nobody is predicting that house values will increase again in at least the next 5 years. Still, we in Harvard are lucky - our values have decreased very little, if at all. We might even beat the general trend, and see some growth in value. But, we can also see that our property tax rates must go up for the foreseeable future.
You might conclude from what I have said, that I would be looking forward to voting for those in our town who are shouting the loudest against (among other things) spending money on the town hall renovation. You would be wrong. In going through all the annual reports to gather the information I have here, it seemed clear to me that some of the same people who are complaining about the Town Hall cost now were complaining about that cost in past years, and voting against spending on maintenance. Those votes are now costing us more money to repair, expensively, what could have been maintained, relatively cheaply, then. I am sure nobody intended for it to end this way - but sometimes a longer vision is the wiser course. It is a good thing to be wary of spending money - it is a bad thing to forego changing the oil on your car to save money.
We are in a pickle now. And it will take us at least 5 years to change our course. But, if we plan wisely today, we can work it all out.
I have updated my numbers, and I have come to some conclusions. First - the increase in costs has been very significant. Revenue has had to increase to match it. If you look at those graphs alone, you might be right to feel a little panic. I know I did. But I still wanted to know what this meant to me. So, I translated all the numbers that are being tossed around into something I can grasp - what it will cost me. Last year my taxes were close to 1.5% of my property value. For every 100,000 of my house value, that means I paid $1,547. Since my house is valued at $300K, I paid 3 times that, or about $4600. In another ten years, at the maximum rate of increase, I will be paying about $6,000 dollars. Assuming my house value does not go up, which today seems to be a reasonable assumption. I do not believe you will find many residents of Harvard who will be hurt by paying out another 1500 dollars. Still, the dramatic rise in costs is more than worthy of attention.
Another conclusion I have reached is that the Selectmen who are groaning loudest about what we are spending are also the most responsible for the position we find ourselves in today. This is also true for the candidate who is groaning right along with those Selectmen. Remember, this group has been in the majority for many years. You know the saying "Penny-wise, and pound foolish". After having looked at 30 years of annual reports, it looks to me like that is a good description of this group. They are postponing necessary maintenance, "nickle and diming" legitimate spending, when they would be getting better return in the long run by showing more concern for long-term thinking.
-------------------------------------------
Initially, I wondered what the numbers really were. I figured they might tell me something. I went down to the library, and pulled out town records. Let's take a look at what I saw.
Ok - so here are the tax rates for the last 25 years (orange line). We only this year got back to the previously highest rate - from more than 10 years ago. The blue line is property valuations. Note that these have gone stagnant over the past few years. This is important to pay attention to. {On 17 May I updated these graphs. They now read left-to-right, just as we are accustomed to!}
Now let's look at our spending. The next two graphs only go back 10 years, but we get the idea.
General fund spending is all the stuff we want our city to do. Police, fire, trash, water, roads, building maintenance, town government, etc. Schools are our biggest expense category. Notice that general expenses and school expenses continue to rise.
Here you see our revenue by source - property tax, local fees and licenses (the biggest contributor to this is car tags), and money received from the state.
I had been told one reason we were having money trouble was because we were getting less from the state. The numbers I see make me think this isn't a very big part of the problem. Relative to total income, what we get from the state is pretty stable. The local revenue is from town car tags, trash fees, fines, tickets, licenses - stuff like that. It is also pretty stable.
Now I can see why the town official said what they did. The graphs tells us a lot. Cost is going up. Income from fees and licenses is stable. Income from the state is stable. Property values have gone stagnant. Which means there are only two ways to pay for the increasing cost. One is to borrow more, and the second is to continue to raise property taxes.
What does this really mean to me? Remember the numbers that showed how much I would pay? Here they are in a graph. {This graph still reads right-to-left. But see my next post. I think that is more useful to understand what we are looking at.}
Since 1960, the town of Harvard has completely changed. In 1960, there were about 1,000 people in our village. Today there are more than 5,000. New properties have been built, and values have increased. In the chart above, we can see the affect of that - a relatively constant growth in value.
One of the reasons I got involved in this was because our Town Hall has become a point of contention in this debate. People are disagreeing on how much should be spent to renovate the town hall. Over the past 50 years, some temporary measures have been taken to accomodate our growth. Some of them were meant to be - or should have been meant to be - temporary. Some were short-sighted.
Our town hall has some extremely critical condition issues. These are serious problems which could result in loss of the town hall altogether if they are not taken care of. The exterior envelope has major issues. Moisture is getting in to the frame of the building. One can not tell the extent of the current damage from these conditions until after work will have started. I think most people are already aware of this. The Town Hall has been subject to deferred maintenance for more than 50 years. How else can you explain that, in this day, the walls are not insulated! I do not think you can find a single standing house in our town that you could say the same thing about. It has also been the object of temporary measures that have begun to take on an air of permanence, because of the simple fact that they have been in place for so long. One example of this is the temporary office structures on the 2nd floor of the town hall. The town hall has also been the subject of some bad spending decisions. I refer here to the addition put on some years ago, that is now the cause of greater maintenance issues.
So, recently, our Town Selectmen got various possible plans evaluated about how to manage the cost of the town hall. I was raised in the tradition of: "Use it up, wear it out, make it do, or do without." One took care of their tools. It is not a throw-away position. The Town Hall is one of the town's tools. It needs to be appropriately taken care of.
Now, if my memory serves me, we had basically three or four scenarios brought to us. One was cheaper - but not by much. Two were in the middle, and the last was more expensive. Our town voted already for one of the two plans in the middle. Maybe we should change our minds, maybe we shouldn't - but if that cheap plan does not take care of the maintenance issues, it is false economy! The people who are saying we should stick to the renovation we already voted to do, are saying that the cost difference, between the cheap plan and the plan our town voted in, is not significant in the big picture. Frankly, the numbers back them up.
The town has other needs that are being stuck, today, on the town hall, too - with predictably bad results. Records storage is a major problem. Our town is 5 times the size it was 50 years ago - and our space needs reflect that. If we do not exercise foresight now, we will pay a greater price 10 years down the road! We are seeing this today because maintenance was deferred in years past.
I think the folks who are shouting about the tax levy are right to be worried about it. But from talking to both sides, I also think BOTH sides are worried about this. I don't think we have anyone in the public discussion who is NOT worried about it - although the shouting people would like us to believe that there are people in the public debate who are not worried about these financial issues. We know that school costs will continue to rise, year by year. Increasing insurance rates, medical costs, and fuel costs are examples of pressures that keep general costs rising. Nobody is predicting that house values will increase again in at least the next 5 years. Still, we in Harvard are lucky - our values have decreased very little, if at all. We might even beat the general trend, and see some growth in value. But, we can also see that our property tax rates must go up for the foreseeable future.
You might conclude from what I have said, that I would be looking forward to voting for those in our town who are shouting the loudest against (among other things) spending money on the town hall renovation. You would be wrong. In going through all the annual reports to gather the information I have here, it seemed clear to me that some of the same people who are complaining about the Town Hall cost now were complaining about that cost in past years, and voting against spending on maintenance. Those votes are now costing us more money to repair, expensively, what could have been maintained, relatively cheaply, then. I am sure nobody intended for it to end this way - but sometimes a longer vision is the wiser course. It is a good thing to be wary of spending money - it is a bad thing to forego changing the oil on your car to save money.
We are in a pickle now. And it will take us at least 5 years to change our course. But, if we plan wisely today, we can work it all out.
