Monday, November 26, 2012

Taxpayers Aren’t Santa



Note: At last week’s town council meeting the town manager noted that December 3rd’s meeting would address the annual setting of the tax rate. He reminded us that the rate was determined by the town budget which had already been settled upon last spring. In light of this I thought it appropriate to reprint a post that The O’Zone first published on December 6th of last year. If so inclined, you may wish to examine the comments that were made by certain readers at the time.



__Taxpayers Aren’t Santa__

December 5th's [2011] Southbridge town council meeting illustrated the upside down nature of town government.

Councilors and citizens were informed that they had no choice regarding the property tax rate. Their only choice was whether there would be a single rate for all property owners or different rates for industrial, commercial and residential properties.

Now, whether you're a household or a business, the first thing you do when you prepare a budget is determine your income. Then you formulate a budget that fits within that income.

Not so for town government. First you establish your budget and later you set the income you will extort from the taxpayers.

I believe that it is time to institute a change that will correct this topsy-turvy situation.

The Town Charter provides in Section 4-2-3 that "The manager shall:
(d) prepare, assemble and present to the council the annual town operating and capital  budgets, shall present said budgets to the council in a format acceptable to the council and cooperate with the council in all financial matters."

Given that the budgets must be “in a format acceptable to the council" I would propose the following addition to the town bylaws:

"4-102.5 The annual operating and capital budget submissions of the town manager to the town council shall include a projected impact upon the existing property tax rate given information available at the time of the vote on the budget. Any increase from the projections when the proposed tax rate is actually presented to the council shall trigger a mandate that the budget be amended to conform to the revenue assumptions presented when the budget was adopted unless the council suspends by a 2/3 vote said mandate."

This provision will restore sanity to the budgeting and taxing process where town officials must act like responsible adults rather than children expecting that Santa will fulfill their every wish.

23 comments:

  1. "Collecting more taxes than is absolutely necessary is legalized robbery."

    - Calvin Coolidge

    ReplyDelete
  2. "I place economy among the first and most important virtues,
    and public debt as the greatest of dangers to be feared.”

    - Thomas Jefferson

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  3. McDonalds original comment? Precious. "I would be pleased to do nothing" is more like it !

    ReplyDelete
    Replies
    1. Amelia Peloquin went beyond her original comment when she was running for election. She wrote on your blog “Ken, I would support your proposed by-law for requiring projected tax rates during budget season.” This was in an article called “Peloquin Responds to “What I Want To Know” – Part II”.
      http://ozonesouthbridge.blogspot.com/2012/05/peloquin-responds-to-what-i-want-to_20.html

      Delete
  4. The problem is, as it has been for some time, salaries and benefits keep rising and are in no way tied to the economic performance of the town. If the budget were only allowed to increase by the rate that the town economy improves and if we placed primary importance on maintaining and improving our schools, you'd see a greater emphasis placed on economic development. As it stands now, there's no incentive for the town to improve its economic position. People pay lip service to economic development but when push comes to shove, economic development is hard work but people get pay and benefit increases no matter what. This has to change.

    ReplyDelete
    Replies
    1. Rich:
      I agree with you 100%. You may recall that I also a addressed this issue only a month after the article reprinted above in a piece titled Let's Pay for Performance in Southbridge Town Government: And Let’s Start at the Top.
      The two of these suggestions working in tandem would constitute meaningful efforts at reforming the performance of town government. However, I can’t help at this point but to be skeptical that such a goal is congruent with the existing objectives of those in control.

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    2. There are reasonable people on the council that could make this happen. They'd have to withstand the inevitable Doom & Gloom predictions of the town manager and the parade of cronies he'd arrange to prevent this from happening but this would be a big step toward making the town work for its citizens rather than its employees.

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    3. There are not enough reasonable people--that's the problem. Stupid voters keep electing stupider councilors.

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    4. Not every citizen in town gets a raise like the elderly and capped salary workers like myself. I don't see why all town employees have to get a raise.

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    5. The rationale is the town has to give raises to retain its employees. This ignores the fact that many, if not most, town employees make more than the average Southbridge tax payer and it also ignores the fact that the benefit package you get from the town is better than what most companies provide these days. The administration refuses to recognize this and the council is unwilling to put it's foot down. Let's hope a majority of the council wakes up and realizes we're headed for our own fiscal cliff once the landfill closes.

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    6. At least if they get a raise they can pay for the increase of taxes where others cannot. I think that everyone should help and be thankful that they have a job, not just rely on getting a raise each year.

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    7. Do Remember to Re-elect Councilor “Regal Regis”...The Town Employee Councilor!

      Projected Personal Mantra:

      Tax & Tax, Spend & Spend, Re-elect Reg & Re-elect Reg.

      Delete
    8. You don't pay taxes, they take taxes!

      Combine the words The IRS = Theirs!

      Delete
  5. The "Town Manager" must love poor people...he's creating so many of them.

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  6. The Town of Southbridge is my shepherd,

    I shall not want.

    It makes me lie down in Town owned pastures.

    It leads me beside quiet waters in banned fishing areas.

    It restores my soul through its control.

    It guides me in the path of dependency for its namesake.

    Even though our town plunges into the valley of the shadow of debt,

    I will fear this evil,

    For Clark and the town Council will not be with me.

    The Guns, back hoes and unlimited spending will leave me on food stamps,

    Their spending and increased tax rates do not comfort me.

    They leave me at a table of Michelle Obama approved foods at the community meals and soup kitchens.

    They anoint my head with hemp oil;

    My government regulated 16-ounce cup overflows.

    Surely mediocrity and an entitlement mentality will follow me

    All the days of my life,

    And I will dwell in a low-rent HUD home forever and ever.

    Amen.

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    Replies
    1. Nice Style! Got something with alittle more X-Mas jingle?

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    2. "The Guns"

      What is a Pistol's Life Expectancy? ... The HK P7 was designed as a police pistol and it's service life was designed about 2000 rounds.

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    3. Based on the original version as sung by Elvis Presley

      I'll have a tax burdened Christmas without you
      I'll be so tax burdened still thinking about you
      Decorations of red
      On a black Christmas tree
      Won't be the same
      If you're not a neighboring tax bearer with me

      And when those real estate values start falling
      And when those black memories start calling
      You'll be doing all right with your Christmas of white
      But I'll have a red, red, red, red, Christmas

      Ooh
      Ooh
      Ooh
      Ooh

      Decorations of red
      On a black Christmas tree
      Oh, won't be the same
      If you're not tax bearing with me

      I'll have a red Christmas, that's certain
      And when that overly taxed heartache starts hurting
      You'll be doing all right
      With your Christmas of white
      But I'll have a red, red Christmas

      Mmmm

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  7. i'm not a political wiz, still learning the basics.......but i keep throwing this thought around in my head, "what improvements have been made in this town in the past year to make another tax hike easier to swallow?" NONE that i can think of. the flow of trucks full of trash up and down the dump road has increased, which in turn has increased to noise, dust and paper trash blowing around 169. no fireworks on july 4th, no veterans day parade, a few strands of christmas lights still half lit on the trees in the town common (looks terrible) etc. etc.

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    Replies
    1. Leave the town manager alone! He’s exhausted! He just had his town crib redecorated.

      Delete
  8. Is Management Performance a Factor in Municipal Bond Credit Ratings?
    [The Case of Texas School Districts]

    Excerpts - (Introduction):
    “The objective of the research presented in this paper is to take advantage of bond finance data and performance measurement data available for Texas school districts to examine whether management factors are incorporated into the bond credit rating.

    *It is important for public officials and administrators to know if management performance has an impact on their borrowing costs.* Using the data from Texas independent school districts, a model is developed to estimate the bond credit rating that incorporates the effects of socio-economic factors, fiscal structure and strength of school performance on school bond ratings. Special attention is paid to empirically examine whether educational performance of school districts is reflected in its bond credit rating.”

    Excerpt - (Research Model):
    “The main purpose of our study as previously stated is to examine whether management factors influence school bond ratings after controlling for economic, demographic, and financial characteristics identified in the literature. We specifically explore whether school district performance influences the credit ratings of school districts.”

    Excerpt - (Conclusion):
    “One fiscal consideration is that NCLB links financial resources to the educational performance by the incentives it provides. Consequently, educational performance may begin to have a more direct influence on the allocation of fiscal resources to the school district and thereby affect its credit quality. *In particular, the high performing schools and districts are rewarded with bonuses from federal or state governments, while those with unsatisfactory performance have to devote resources to implement corrective actions.*"

    Source:
    http://www.tc.umn.edu/~zrzhao/myworks/Is%20managerial%20performance%20a%20factor%20in%20municipal%20bond%20credit%20ratings.pdf

    ReplyDelete
  9. While most working people get no raises and their benefits are cut (such as higher medical insurance cost or higher co-pays etc.) and our property values are going one way only... SOUTH.... the town employees seem to live in an alternate universe... where benefits get better and salaries rise.... must be nice! I will sell my house here as soon as possible and move out of this shit-hole, where the air smells like sewer, the roads are full of potholes and dump trucks and the water is not drinkable, unless you invest thousands into a fancy water purification system. I don't mind paying my fair share, but what you get in return for the taxes in this town is sad, to say the least.

    ReplyDelete

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