Fees

[Sam Silverman]

Many years ago, in the dense mists of antiquity, in 1957, I came to that small town called Lexington, as I started a new job. The population was somewhat less than it is today, but was steadily increasing, matching the population increase of Greenland. It finally stabilized at about 30,000 +/- 2 or 3 thousand. The property taxes continued to increase at about 5% a year, more or less. But the town expenses,  especially those for the schools, kept increasing at greater levels. So problems arose: how to pay for increases without increasing voter dissatisfaction too much. So at first this was solved by eliminating school programs, or introducing fees for service. Thus some programs were saved, and items like school buses. But problems continued. The Commonwealth came to the rescue, with the allowance of what were called enterprise programs, for water, sewer, recreation. These programs had been formerly included as integral parts of the town budget. As such they provided certain tax ad advantages as offsets -- how this worked I don't know, not being a tax attorney. As fees for service, however, those tax advantages disappeared. I remember at one town meeting asking Jackie Smith, then a Selectman, if they really weren't what had been called property taxes earlier. She agreed. So, by simply changing the name they became revenue enhancements.

But even this was not enough. So developers began to argue that they would reduce the residents taxes by these large industrial payments. They never provided actual proof that this would happen -- in fact, it never did happen. A resident's property tax continued to increase at the same average rate over time no matter how much these commercial developments contributed to our budget. So these revenue enhancements turned out be ways of spending more than otherwise would have happened. Even the passage of a state law limiting something or other to 2.5% a year seemed to have no effect -- debt was excluded from the limitation. And what used to be a fearful thing at town meeting became a normal and increasing thing over the years.

So there is a constant search for revenue enhancements to the town budget, often labelled as fees for service. Now the logical (and absurd) outcome of the process is to put, for example, all school programs, history, mathematics, etc., on individual bases of fees for service. Thus a parent can choose the subjects that he wants his children to be taught -- thus eliminating the resentment he may feel at subjects that he believes don't belong in the curriculum.

And, by the way, I think I heard at the Special Town Meeting  that planning for future property taxes was based on an annual increase of 5%.

So, to summarize: any proposals for fees for service are basically proposals for revenue enhancements outside, and in addition to, the normal budget. In my opinion we don't need additions to a budget disguised as fees. We need rather to look at keeping expenses down -- more efforts at conservation, or provision of solar power, as examples, and making such efforts a primary focus of our planning.

Sam Silverman, Pct. 5

[Charles Lamb]

On 9/28/16 3:25 PM, Sam Silverman wrote:
> Even the passage of a state law limiting something or other to 2.5% a
> year seemed to have no effect -- debt was excluded from the limitation.

Hi Sam,

I'm not sure what your statement above means. Debt service is not
excluded from Prop 2 1/2. Maybe you are inferring that the name of one
type of Prop 2 1/2 override, a 'debt exclusion' is exempt from the
limits? There are two flavors of Prop 2 1/2 overrides: operating and
debt exclusions, but both must be passed by referendum since they, by
definition, will cause an increase the overall property tax levy by more
than 2 1/2% per year. But aside from Prop 2.5 debt exclusions, in
general much of our debt service is in-levy and subjected to the limits
of Prop 2 1/2.

Charles Lamb
Member, Capital Expenditures Committee

[Joel Adler]

Sam,

           One way to increase the equity of the residential tax load is to increase the equity of the commercial property assessments. I pointed out from the floor of Town Meeting that we are about to pay $4.3 million for the Liberty Mutual building, a property that the Town of Lexington has judged to be accurately assessed at $1.9 million. This is not an isolated case of what appears to be a consistent process of under assessing our commercial properties. The only feedback I received after my statement, came from a knowledgeable TMM who complimented me for raising the issue, as we both left Battin Hall at the end of festivities. 

            Joel Adler Pct. 1 TMM

   "Everyone is entitled to his own opinion, but not his own facts."    Daniel Patrick Moynihan

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[Glenn Parker]

On 9/28/16 3:25 PM, Sam Silverman wrote:

And, by the way, I think I heard at the Special Town Meeting that planning for future property taxes was based on an annual increase of 5%.

Sam,

At the moment, there is a single year in the current financing model (FY 2019) with an predicted annual increase of 4.9% in the tax bill for a home of median value ($786K).

This was covered in Rob Addelson's presentation under Article 2 during the most recent Special Town Meeting.  In that presentation, Mr. Addelson discussed the funding plan for all major capital projects through FY 2025, which will be expensive and result in significant new debt service.  This model includes the use of funds we have been appropriating into the Capital Stabilization Fund.  Assuming Town Meeting votes to apply these funds as modeled, it will help to smooth out the spike in debt service that peaks in FY 2020 under the current projections.  Without the Capital Stabilization Fund, there would be at least 3 consecutive years with annual tax increases in the 5% range.

For decades, Lexington has deferred increasingly critical updates to its public infrastructure.  That may have helped to keep tax bills low, but it also meant putting the men and women who work in our Fire Station and Police Station at risk.  It meant allowing Hastings Elementary School to operate for years in a truly sub-par facility (to put it mildly).  It meant increasingly difficult compromises to satisfy growing state mandates for public education.  On top of that, we have had unexpected capital needs, e.g. rebuilding Estabrook Elementary School due to PCB contamination.

The opening topic was fees, though I'm not entirely sure why.  The serious revenue, i.e. the revenue that will pay for this new infrastructure, is coming straight from property taxes, not fees.

Still, if we're really looking to keep expenses down, then fees are a fine way to do that because they tend to discourage the frivolous use of Town resources.  When a janitor has to stay past normal working hours to facilitate a meeting at the high school, should that service be delivered free to the meeting organizers?  Should you and I be paying for it as part of our tax bill instead?  Isn't this a fairly obvious situation in which to apply a fee?  If no fee applied, then wouldn't every other group be encouraged to take advantage of the service, even though it cost the Town more and more?

-Glenn Parker, Pct. 3

[Ephraim Weiss]

Joel,

In accordance with current state law, businesses are assessed in a different manner from that of residences.  Residences are assessed at market value.  Businesses are assessed based on some business characteristic, which enables them to get a much lower assessment than market value.

Businessmen seem to have much more to say about laws than residents.

If you’re unhappy about this arrangement, this inequity can only be changed through legislation.  So get your state legislators involved, and put pressure on your legislators.

-  -  Eph Weiss

P.S. - Somebody please forward this to Mike Barrett, who is not in my district.  Thanks.

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[Elaine Ashton]

On Sep 28, 2016, at 3:25 PM, Sam Silverman <smp...@verizon.net> wrote:

So, to summarize: any proposals for fees for service are basically proposals for revenue enhancements outside, and in addition to, the normal budget. In my opinion we don't need additions to a budget disguised as fees. We need rather to look at keeping expenses down -- more efforts at conservation, or provision of solar power, as examples, and making such efforts a primary focus of our planning.

I think, in terms of CC fees, they are looking to keep expenses down as, the Rec Department is looking to have a sustainable schedule of revenue which will support both the CC and the needed staff considering that town budgetary concerns are looming in the near future. Even though I mentioned that the ELCA would not be a group who could afford to splash out for regular meeting space (though for the annual use of the cafeteria for the Candidate’s session, I’m sure we would find $200 for that), I cannot begrudge the efforts to make some town services pay for themselves as, with rising enrollment and LPS consuming roughly 75-80% of town income at this point, it’s a difficult situation which I’m hopeful will be resolved in the best manner possible considering the coming fiscal challenges.

Elaine

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