The Town of Stoneham, after a failed override attempt, has voted through its school committee to eliminate all High School athletics. It is a devastating cut to make, and it has people taking notice statewide. From the Gobe story announcing the cuts-
Stoneham has already endured a series of town and school cuts in recent years, as health insurance, utilities, special education bills and other mandated costs have risen faster than the tax increases allowed under the Proposition 2 1/2 limit. In each of the last two years, the Board of Selectmen imposed a $160-per-household trash collection fee to raise revenue. But the trash fee proved unpopular, and officials pledged to eliminate it if voters passed the $3 million override.
This cut, whether it stands for this year or not, will be replicated in one form or another throughout the state as one city after another finally hits the fiscal wall. There will be unpopular cuts to programs, but the municipal labor force should be ready for some enduring shocks as well. It is unfortunately true that many feel that cities and towns are crying wolf, and I believe some feel that cities use the fiscal crisis as a negotiating ploy. Our problems are real, and the impacts in the future will be painful. Link to the Globe story here.
Bill Manzi.com 
Your Honor,
As you can tell from our discussions, I agree with you. The wall has been hit.
The municipal revenues are derived from property taxes and the State Cherry Sheet (Municipal welfare) fed off the state income tax). So the Property owner gets a double hit. My income tax may, in fact, go to another municipality depending on how it’s alloted.
Now the Governor has his Municipal partnership act with a dubious affect.
What will a city budget look like in ten years, Your Honor? Unless the economy of the state grows, there will be major financial problems.
Looks like my promised property tax cut and the citizen approver tax reduction is in jeopardy.
All done without a Republican in sight. (Weld through Rommney were RINOs) You can’t be elected in this state with out promising the folks something.
Got any ideas??
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This issue is unfortunately becoming a harsh reality for many cities and towns. As costs rise, there are two choices: raise revenues or cut services. Either requires unpopular decisions.
Special education bills are mentioned specifically. This is an extremely costly piece of the education system that could be looked at… I am not intending to slight special needs students, but the cost of funding one special needs student could fund an entire athletic program. What I believe is happening now is political correctness in the extreme: handicapped children are getting the Cadillac services while athletes (or musicians, or artists, or the recipients of other programs) are getting a Hyundai.
Obviously the best solution would be to ask the federal government to live up to their promise to fund special ed services 100%, but we know that isn’t about to happen. Is cutting of special ed services an option? Yes, it is politically unpopular, but is it becoming a necessity? IDEA requires a “free, appropriate education,” but have we gone above and beyond?
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The Stoneham Selectman have voted 3-2 to keep the trash fee and raise it to $200 from $160 in order to try to save the athletic program. Whether that happens is still open, however. Read the Herald story at this link.
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Jules,
It is hard to know where to start. What will muncipal budgets look like in ten years? Hmmm, how about this for an answer. It depends. Lets look at the Special Ed post above. The writer calls for reform of Special Ed. We can have that debate at some point but a critical issue is the state and federal mandates, be it in Special Ed or elsewhere. Cities can no longer take the outrageous UNFUNDED mandates from the state and federal governments. Even partial funding of mandates is wholly unacceptable. Now that I have gotten that rant out let me go back to your question. If the funding system remains the same then I envision dramatic cutbacks in municipal employment, with services being cut until government is forced to outsource what is routinely done today by municipal employees. While I do not advocate outsourcing that financial wall will lead to the inevitable drive to escape the twin burdens of health and pension costs, by shifting those elsewhere. If, on the other hand, we begin to talk of a grand bargain in which education costs are largely removed from the property tax, then I believe there is hope for financial revival. I just don’t believe that the property tax can sustain k-12 education over the long haul. More to come soon!
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Your Honor,
I often wonder what would happen if Methuen were to function without state or federal mandates. Are we reaping the rewards of having regulatory and financial partners?
If all State and Federal requirements and funding were ended, could Methuen run itself?
I submit this as a question.
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Your honor,
I believe we are reaping the rewards of Federal and state Largess. We may or may not get funds, but we certainly get a great deal of regulation that costs us plenty.
The teacherlady has proposed the only avenues open to redress tight budgets are to raise taxes or cut services. How about changing the way we do business. One major cost component is labor, especially benefits. The city must place municipal employees on the same footing as the citizens who pay their way. Retirement must go to programs like 401k plans ( the city can contribute a share), healthcare cannot be fully funded for retirees and active employees must pay a larger share.
Services should be turned out for bidding. At least there is a degree of cost control as the labor costs are under different rules.
Municipal budgets cannot continually run up against the maximum prop 2 1/2 limits. What does Stoneham do next year. raise the trash fee to $250, then $300, and then…well you get the idea.
I have a question for you; What would happen if Methuen were to withdraw from all State and Federal programs and fund its own operations?
I have one more question; Are you saying that removing education from the property tax is to shift the burden to the state? (if so, very, very bad idea for the kids).
What we have is unsustainable.
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Jules,
With regards to your first post the answer is no, we could not operate without state and federal assistance. Again the property tax is not sufficient to fund general government, schools, and libraries no matter how strongly the belt is tightened. I will deal with your questions on employees in a new post.
Bill
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Jules,
There is no question that private-sector remedy’s are in the cards for the future. Pension reform is inevitable, with fixed benefit systems likely out the door, replaced by 401-Ks. Additional health care reform may be coming, starting with an ability to have localities participate in the State Plan (GIC). I also believe that spending to protect political turf must go. So called “backroom” administrative functions are replicated throughout local government, and this work duplication must stop. I will do a post on a major consolidation of one of those functions in Methuen in the next few days. There are indeed ways to stop costs from rising, and I do agree that just looking at the revenue side leaves a lot of money on the table. This is however a democracy, and change must be agreed upon by all of the players, including municipal unions. I know that reality can be cumbersome, but it is our system of government.
Bill
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Your Honor,
If union employees are protected by state and federal law, giving them an advantage that trumps city negotiations.
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Jules,
Not sure I understand the question. City negotiations are not trumped, but rather we must not use tactics that fall outside of federal or state labor laws. If we do then we can be sued.
Bill
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Your Honor,
The question is; are union negotiations and final contracts transparent (All citizens can see the results), or are they private?
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Your Honor,
Please read Taylor Amerding’s column in the July 1st Eagle Tribune. It supports my view since the June 28th entries.
This is not partisan. This is about managing the budget process.
Hope you are having a pleasant 4th.
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Jules,
All contracts are public, with all of their provisions open to public inspection. Full transparency.
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Jules,
I read Taylor’s column this morning. Nobody can deny that part of our general problem at the municipal level has been giving out muncipal labor contracts that are not sustainable. Even if we feel that certain jobs should be compensated at higher levels than in years past (for example seeking to attract teachers to the profession by increasing salary)the property tax can no longer afford it. We all realize that the benefits associated with these agreements are also not sustainable. In an earlier post I agreed that fixed benefit pension plans offered by the state and municipalities likely will go by the wayside. Read Rep. Campbell’s press release, which talks of incremental reform by the state on health care and pensions. Change is coming, even though many are in denial about that change. In a democracy however such change is likely to be incremental!
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Your Honor,
Thank you for the information.
The insurance inclusion was the only real help the state could provide, as long as the unions don’t have a veto.
All towns have to look at retirement benefits. The citizens have to keep these municipal and state workers at full retirement for the rest of their lives. Like the rest of us they need to save for their own retirement. Municipal contributions to a 401k plan.
I see the local taxes as just more revenue to grow the budget.
Thank you for the minority links.
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Your Honor,
Thought you would like to know I wrote an angry e-mail to Mort Kondracke for calling me a radical because of my opposition to the Illegal Immigration bill on the Beltway Boys program.
Am I fair and balanced or what?
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Jules,
The State legislation does indeed contain a union veto over muncipal participation in the GIC.
Bill
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Wow! Someone calling you a radical. Morton can be pretty full of himself at times, although I like seeing Mclaughlin stifle him on the McLaughlin Group.
Bill
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Your Honor,
I appreciate the moral support regarding my indignation with Morton.
If the the GIC can be vetoed by the local union then I see difficulty ahead. The choice then is their’s and not yours. The plan head better be pretty good.
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The State plan has had a significantly lower rate of price escalation, which not only benefits the City but the employees as well. What the State plan allows however is for certain plan features to be changed unilaterally by management. That is not true at the local level. If they bestowed the same management rights on mayors and managers our rate of price appreciation would be (in theory) lower.
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Your Honor,
We will have to watch how this cost cutting program works out.It will be implemented piecemeal.
Good luck.
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