This is a rebuttal to Patrick Mehr's guest commentary in June 2006. Mr. Mehr opposes most of the 2006 lexington override initiative. I'll just go point by point, rebutting each erroneous statement. Let me start by stating what I think the real issue is. I think the total spending and revenue in Lexington is actually a little bit low, even with the override. Proposition 2.5 was a bad idea, and I think it distorts the finances of every town, as they try to figure out how to survive on revenue that, in terms of real dollars, shrinks every year. (It would have made more sense if Proposition 2.5 was "Proposition inflation", limiting tax increases to match inflation. (With an appropriate definition of inflation, not the CPI, which is lower than the inflation observed by salary-paying entities.) Even a "Proposition inflation" would be a problem, in the face of externally mandated expenses, drops in state aid, and other factors that are beyond our control. The real problem is that property tax is regressive, and even reasonable property tax increases are disproportionately rough on low-income residents. That includes senior citizens. There are apparrently several ways that seniors get a break, however. - Tax deferrals (Postpone paying property taxes until the house is sold or inherited.) (65-or-over, income limited to $40K) - Tax exemptions ($1000, 65-or-over, income and asset limited.) - Senior CPA abatelment (65-or-over, income limited) - Circuit breaker ($840, 65-or-over, income and house-value limited) Some of the income, asset, and house-value limits may be too low to really solve the problem (for example the circuit breaker suddenly goes away if your house is worth over $600K.) But I also wonder if someone who is not taking advantage of any of these breaks really is justified in complaining that they cannot afford the taxes. I would support implementing the residential exemption, which would be revenue neutral, and would shift taxes from lower-priced homes to more expensive homes. This works by subtracting 20% of the average residential value from the assessed value before multiplying by the tax rate. In the meanwhile, I think the right solution is to raise taxes as needed. I think the only reasonable thing to do in this election is to pass the overrides. But as a community, we need to find ways to restructure the taxes. Now for the point-by-point rebuttal. www.townonline.com/lexington/opinion/view.bg?articleid=507040 Lexington needs sound, creative fiscal policies By Patrick Mehr/ Guest Commentary Thursday, June 1, 2006 After long reflection, I have decided to vote "no" on the school and municipal questions (#1, #2, #4) and "yes" on maintenance (question #3). Although counterintuitive at first glance, this is the best way to send the message to our Board of Selectmen and School Committee that to preserve Lexington's excellent schools and municipal services, they must change their dangerous and unsustainable financial policies. The current financial policies are neither dangerous nor unsustainable. The message that we need to send is that we are willing to raise taxes to track student population growth and inflation. Instead of implementing several proposed money-saving opportunities, a majority of our current leaders seek $5 million in permanent new taxes (despite the possibility that Lexington may receive $800,000-$1.2 million in additional state aid). They also plan to use $2 million of the town's reserves to balance the 2007 budget, a harmful strategy since dipping into reserve funds is not sustainable over time. This is a false choice. The current leadership has pursued money-savings, possibly too far. Some physical plant work has been dangerously deferred. Moreover, large unnecessary tax increases put too much pressure on many residents, making Lexington less diverse and more like a "ghetto for millionaires". The tax increases are not large. The 2006 budget, without an override, is about $131 million. In addition to the 2.5% increase allowed under prop 2.5, the four override questions propose an additional $5 million, or a 3.8% further increase in the budget. We didn't have a budget override in 2006, and so that 3.8% increase is really an increase for two years, and is only 1.9% per year. Combining the 2.5% with the 1.9%, the actual rate of increase for the budget over the past two years is thus closer to 4.4% than the 13% that some opponents of the override have cited. Inflation for consumers is currently around 3.5%, but the actual inflation rate town budgets has been higher due to expenses for health care and educational mandates. It is amazing that we can keep the town on an even keel with only a 4.4% increase in revenues. The total story is a little more complex. - Debt service is exempted from proposition 2.5 - The CPA added some additional tax this year (but not for the lowest income sniors) - The relative value of commercial property has dropped compared to residential property. We shouldn't complain too much, since lal that commercial property helps subsidize our schools. There will always be some cyclic variation in the value of that property, however. Even so, what we were voting on was a 1.9% increase per year, not 13%. Lexington plans to redistrict system-wide in 2007 to better balance our student population across school buildings. In anticipation of that, we should reassign a few dozen Lexington and METCO elementary students to different schools and create some combined elementary grades - as Lexington had in the past - this September, to eliminate 12 under-enrolled classrooms and save $700,000. First, I don't believe the numbers. The 12 classrooms and $700,000 figure sound like they were made up from thin air. Even if it were true that we could eliminate 12 classrooms by this plan, combining elementary grades sounds like a bad way to save money. Children learn different things at different ages, and combining the grades would mean that children would be seeing the wrong material on different days. Our schools spend $3 million annually on natural gas, fuel oil and electricity, but no energy savings beyond efforts already started - mainly at Clarke - are in the budget. Lowering thermostat settings, closing windows in the winter and adding inexpensive HVAC controls in some buildings can reduce our energy use by 20 percent, saving $600,000. This $600,000 figure also came out of thin air. If the schools could save significant money by lowering the thermostats, they would do it. Currently in Estabrook most of the ventilators are not working, resulting in air quality which is below state-mandated standards. The only workaround we have right now is to open the windows. It would make sense to fix the ventilators, but that wouldn't really save energy, since it doesn't matter whether the cold air comes in through a window or through a ventilator. Estabrook needs more ventilation, not less. An annual "student activity fee" of $500 at the high school would bring in $1 million in a less painful and more equitable manner than by permanently raising taxes on all Lexingtonians, including already strapped long-time and elderly residents. This one is ridiculous. Charging high school students $500 to attend school is just wrong. It may be less painful for some, but it is more painful for others. It is certainly not equitable, unless you think that students should be paying for all of their education. On the other hand, we could take this proposal to an extreme. We could charge a "fire department activity fee" so that fire department budget is covered by people whose houses catch fire. We could charge a "police activity fee" for those who get robbed. We could charge a senior center activity fee for retirees, to pay for the senior center. We could install toll gates all over town to collect a "road activity fee". This direction is silly. Expenses for town services should be distributed across the town. Functional laser printers, pencils and other supplies are discarded at the end of each school year. We must review our school operations and compare ourselves with other school systems ("benchmarking") to identify new cost savings, for example: should janitorial services be outsourced to save money? Do we really need "technology specialists" to assist with computer technology? Are libraries organized optimally across the schools? Hogwash. The schools are not throwing away valuable supplies and equipment. Everyone I've talked to at the schools is very sensitive to the problem of saving money. I don't believe outsourcing the janitorial staff will save much (if any) money? It might cost more. Regarding the technology specialists: If we are going to have computers in the schools (which some may think is a bad idea), we are going to need people to keep the computers running. Regarding the libraries: The complaints I get from my children are that the libraries don't provide enough services. It doesn't sound like there is much opportunity to save money there. If you want to get rid of our schools computers and libraries, why don't you come out and say so? We must reduce the high share (87 percent) of employee health benefits we cover. Many Lexington employees and retirees now forgo the benefits offered by their spouse's employer, and instead take Lexington's benefits which are far more generous. We don't know the size of the problem - our leaders don't "watch the store" closely enough - but using reasonable assumptions (perhaps 300 families take Lexington's benefits instead of another employer's, each costing us $8,600 annually), we unnecessarily spend $2.5 million each year. When will the recommendations of the Health Benefits Review Committee be implemented? These numbers are pulled out of thin air. Where is the evidence for how many families use Lexington benefits instead of others. An $8600 benefit is comparable to what many companies pay, so why should I believe that most employees prefer Lexington's benefits to those of their spouses? If you are going to spout this kind of nonsense, come up with some real numbers. How many employees have a family using benefits? How many have a family not using the benefits? How many have no families at all? And according to the Health Benefits Review Committee, the town manages its health care costs well. Higher benefits are counterbalanced by employees having accepted lower pay increases than they would have gotten otherwise. None of the recommendations of the committee involve squeezing families out of the system: http://ci.lexington.ma.us/Selectmen/Reports/FinalHBRCreport91205.pdf Our leaders don't do multi-year budgeting, something any well-run business does as a matter of course. With a one-year time horizon, options to save money are limited. Collective bargaining agreements, school enrollment projections, retirement dates for our employees and major building upgrade needs allow long-range budget planning, better timing of new initiatives and additional savings not otherwise possible. Surprisingly, Lexington is not a business. In fact, our leaders do perform multi-year budgeting and planning. But the reality is that the actual revenue for any business or government won't be known in advance. The other reality is that any well-run town must, in stable state, pass frequent budget overrides because proposition 2.5 would otherwise cripple the town. It is true that the town's short-sighted planning has resulted in unpleasant surprises, and in some cases seems to have been stupid. For example, the decision to skimp on maintenance on the older school buildings may have made sense when the state was giving out grants to replace old buildings with new buldings. After all, why sink money into the old building which will be torn down in a few years? But it seems less likely that the older school buildings will be replaced now. Now that money saving effort looks like it will cost us more, since fixing something that is broken is typically more expensive than maintaining it in the first place. To me, failing to maintain the buildings seems like poor stewardship. But I can understand why the decisions were made. Even if we had passed this override we would still be skimping on maintenance for the older buildings. The way we budget now, the renovation of our School Administration building, estimated at $3.5 million in 2005, has already increased by 40 percent, the reconstruction of our DPW facility is in limbo and there is no clear plan for an adequate Senior Center. These are not short-term budgeting issues. The problems in these three areas have been well known for years. If you propose to squash the funding that would keep up with inflation, where do you propose to get the money to solve these problems? The "yes" campaign has traditionally been well endowed. In 2004, it spent $76,000, more than six times the $12,000 spent by the "no" campaign. The "yes" campaign received 12 donations of $5,000 apiece (covering 79 percent of its expenses), 11 from individuals and one from the teachers' union. The $5,000 contributors were on average 40 years old and live in homes assessed at more than $1.5 million (http://lexopengov.com/2004Override.aspx). The "no" campaign received four large donations ($500 to $2,000 apiece, covering 30 percent of its expenses) from individuals on average 73 years old who live in homes assessed at just more than $600,000. Perhaps this difference in funding reflects the values of our community So what data did Mr. Mehr decline to tell us about his analysis? The proponents were roughly equally split between democrats, republicans, and unenrolled. There were four large (more than $500) donations to the "no" campaign. There were 35 large donations to the "yes" campaign. The sum of all small "yes" donations (less than $500) was more than twice the sum of all the "no" donations (including both large and small donations) In addition to the support of the relatively wealthy financial services sector employees, the yes campaign was supported by engineers, professors, social workers, homemakers, doctors, and others. What does this mean? It does not mean, as Mr. Mehr implies (but doesn't have the courage to actually say out loud) that the Yes campaign was funded by rich young people and the No campaign by poor underdogs. The data indicates simply that the Yes campaign enjoyed broad support. On the other hand, you cannot derive much demographic information from the four people who supported the No campaign. Its just not enough data to conclude anything. Are older voters more likely to support the No campaign? Not according to Mr. Mehr's data. Are owners of small homes more likely to support the "no" campaign? Not according to the data. Do relatively less wealthy people support it? Not according to the data. A handful of wealthy Lexingtonians spent large amounts of money to support an override. Such donations would be better spent to start a Lexington High School endowment (as Brookline High School and Boston Latin have), the income of which would mitigate the need for tax increases. According to Mr. Mehr's own analysis, the Yes campaign donated $26,334 to the food pantry, the friends of the council on aging, and the PTA scholarship fund. The Brookline endowment has apparently raised $1.2M since 1981. That is laudable, but it is no substitute for adequate tax-based funding for schools. $1.2M over 25 years is $48,000 per year. In contrast the override requests are in the millions. It seems wrong to suggest that money spent on political campaigns would be better spent elsewhere. In 2003, when the proponents of overrides failed to campaign effectively, the override was defeated, causing all sorts of problems in the fire department, police, library, and especially the schools. As I recall, the 2004 Yes campaign won by close to 2-to-1. What was the difference? Voter turnout. I suspect that campaign spending and editorials don't change anyone's mind, but that it does affect voter turnout. In the 2006 campaign, the No campaign made extremely effective use of misinformation. I don't know if it swung the election, but I have heard override proponents repeating Mr. Mehr's nonsense as though it were true. The No campaign propagated some very effective memes. It would be more useful for the override opponents and proponents to wokr together to spend their effort to enact the following progressive tax scheme. The selectmen promised to study how to make our tax system more equitable (with a tax increase on larger homes - those assessed above $700,000, the townwide average - and a tax cut on smaller houses), but they did not proceed. Mr. Mehr didn't specify, in his editorial, how this would work, probably due to word-count limitations from the newspaper. Apparently, the way this works is that a town can exempt the first 20% of the average assessed value on owner-occupied principal residenses. Implementing such an exemption would shift taxes from low-valued houses to high-valued houses. According to Mr. Mehr's calcuations (which seem plausible), a little less than 2/3 of the homes enjoy reduced taxes, and the others would see a tax increase. This tax shift would make the property tax more progressive, and it sounds like a good idea to me. Given public commitments to use question #3 funds exclusively for building maintenance, I will vote "yes" on the maintenance question to save us money in the long run. We have badly fallen behind with insufficient maintenance of our buildings, and that costs us dearly in expensive emergency repairs and wasted energy. At least you understand that some expenses are necessary. The best way to support Lexington's superior education system and public services is to vote "no," "no," "yes" and "no" on Monday. Our leaders must implement operational cost savings before asking for additional taxes. Lexington deserves more creative and sound fiscal policies. The opponents hope that if they keep saying "no is best, no is best, no is best", then it will be true. Sorry Mr. Mehr. Repeating a falsehood doesn't make it true. The best strategy for Lexington is to regularly pass the overrides that are necessary now, and will continue to be necessary in the future. Lexington property values are high because we have a good school system. The opponents propose to shoot themselves in the foot by hurting our schools, which will lower the value of their houses, possibly by more than they would save in property tax. It's penny-wise but pound foolish.