Northampton is caught in a downward fiscal spiral and some are content to frame its context as one of outside forces imposing their will on the city. Blame is cast on the national economy, cuts in state funding and rising health insurance costs. It's too bad president Obama and governor Patrick cannot wave magic wands and fix broken funding mechanisms while all else goes haywire in the country. Though these cuts are very real and not debatable, the city's override conversation is now framed around the schools and public safety and how much we can do as residents for so little. It's all been boiled down to about a cup of coffee a day, the same strategy governor Patrick is prone to using to argue in favor of his tax increase proposals.
Yet municipal finance is one of the most complex topics for experts to understand let alone ordinary citizens. So in this case the job of local politicians who favor the override is to simplify the complex maze of fiscal rules and regulations into bite size morsels that are easy to digest for the average person.
For example, the 28 words of the proposed override question where it concerns the senior citizen exemption are such, "To fund increases in property tax exemptions granted to qualifying seniors who meet certain age, whole estate or total assets, annual income, and residency requirements pursuant to M.G.L. Ch. 59 S. 5, (41C)…"
That's a pretty simple description, no? Now here are the 1,254 words that comprise the actual law that governs the senior citizen exemption (emphasis added):
http://www.mass.gov/legis/laws/mgl/59-5.htm
"Forty-first C, Real property, to the amount of four thousand dollars of taxable valuation or the sum of five hundred dollars, whichever would amount in an exemption of the greater amount of taxes due, of a person who has reached his seventieth birthday prior to the fiscal year for which an exemption is sought and occupied by said person as his domicile, or of a person who owns the same jointly with his spouse, either of whom has reached his seventieth birthday prior to the fiscal year for which an exemption is sought and occupied by them as their domicile, or for a person who has reached his seventieth birthday prior to the fiscal year for which an exemption is sought who owns the same jointly or as a tenant in common with a person not his spouse and occupied by him as his domicile; provided: (A) that such person (1) has been domiciled in the commonwealth for the preceding ten years, (2) has so owned and occupied such real property or other real property in the commonwealth for five years, or (3) is a surviving spouse who inherits such real property and has occupied such real property in the commonwealth five years and who otherwise qualified under this clause; (B) that such person had, in the preceding year gross receipts from all sources of less than thirteen thousand dollars, or if married, combined gross receipts with his spouse of less than fifteen thousand dollars, provided, however, that in computing the gross receipts of an applicant under this clause ordinary business expenses and losses may be deducted, but not personal or family expenses; and provided, further, that there shall be deducted from the total amount received by the applicant under the federal social security or railroad retirement and from any annuity, pension, or retirement plan established for employees of the United States government, the government of the commonwealth, or the government of any city, town, county, or special district, included in such gross receipts, an amount equivalent to the minimum payment then payable under said federal social security law, as determined by the commissioner of revenue, to a retired worker seventy years of age or over, if the applicant is unmarried, or to a retired worker and spouse, both of whom are seventy years of age or over, if the applicant is married; and (C) that such person had a whole estate, real and personal, not in excess of twenty-eight thousand dollars, or if married, not in excess of thirty thousand dollars, provided that real property occupied as his domicile shall not be included in computing the whole estate except for any portion of said property which produces income and exceeds two dwelling units. A city, by vote of its council and approval of its mayor, or a town, by vote of town meeting, may adjust the following factors contained in these provisions by: 1) reducing the requisite age of eligibility to any person age 65 years or older; 2) increasing either or both of the amounts contained in the first sentence of this clause, by not more than 100 per cent; 3) increasing the amounts contained in subclause (B) of said first sentence whenever they appear in said subclause from $13,000 to not more than $20,000 and from $15,000 dollars to not more than $30,000; 4) increasing the amounts contained in subclause (C) of said first sentence whenever they appear in said subclause from $28,000 dollars to not more than $40,000 and from $30,000 to not more than $55,000; and 5) by further excluding from the determination of whole estate up to 3 dwelling units. In the case of real property owned by a person jointly or as a tenant in common with a person not his spouse, the amount of his exemption under this clause shall be that proportion of four thousand dollars valuation or the sum of five hundred dollars, whichever would result in an exemption of the greater amount of taxes due, which the amount of his interest in such property bears to the whole tax due, provided: (A) that no exemption shall be granted to any joint tenant or tenant in common unless the gross receipts from all sources whatsoever of each joint tenant or tenant in common is less than thirteen thousand dollars or, if married, the combined gross receipts from all sources whatsoever, of each joint tenant or tenant in common and his spouse is less than fifteen thousand dollars, provided, however, that in computing the gross receipts of an applicant under this clause ordinary business expenses and losses may be deducted, but not personal or family expenses; and provided, further, that there shall be deducted from the total amount received by the applicant under the federal social security or railroad retirement and from an annuity, pension, or retirement plan established for employees of the United States government, the government of the commonwealth, or the government of any city, town, county, or special district, included in such receipts, an amount equivalent to the minimum payment then payable under said federal social security law, as determined by the commissioner of revenue, to a retired worker seventy years of age or over, if the applicant is unmarried, or to a retired worker and spouse, both of whom are seventy years of age or over, if the applicant is married; and (B) that the combined whole estate, real and personal, of each joint tenant or tenant in common is less than twenty-eight thousand dollars or, if married, the combined whole estate, real and personal of each joint tenant or tenant in common and his spouse does not exceed thirty thousand dollars, provided that real property occupied as their domicile shall not be included in computing the whole estate except for any portion of said property which produces income and exceeds two dwelling units. No proportion of the exemption shall be denied to any applicant otherwise qualified for the reason that another joint tenant or tenant in common receives a proportion of the total exemption. Household furnishings and property already exempt under the clauses Twelfth, Twentieth, Thirty-first, and Thirty-fifth shall not be included in computing the whole estate for purposes of this section. Where a portion of the real property occupied as a domicile of an applicant under this clause is located within a municipality other than the municipality in which the applicant is domiciled, and where the value of said property, or the taxes, assessed by the municipality in which such applicant is domiciled would result in his receiving less than the maximum exemption provided by this clause, that part of the property of such applicant within such other municipality shall be exempt to a value, or to an amount of tax, sufficient to grant the applicant the total maximum exemption provided by the clause. This clause shall take effect in any city or town upon its acceptance by such city or town for fiscal years commencing on or after July first, nineteen hundred and eighty-six, or for fiscal years commencing on or after such later July first as the city or town may elect. In those cities and towns which accept the provisions of this clause, the provisions of clause Forty-first and Forty-first B shall not be applicable; provided, however, that any amount of money annually appropriated by the commonwealth for the purpose of reimbursing cities and towns for taxes abated under this clause, clause Forty-first and clause Forty-first B shall be distributed as provided in said clause Forty-first."
Wow. From 1,254 words down to 28. That's quite a condensation.
Moreover, according to Kathy Silva, former two-time candidate for Northampton's Ward 5 city council seat, only a small portion of Northampton's approximately 5,200 seniors would qualify for the $500 exemption. Silva visited the city's assessor's office and alleges that as of today 107 seniors would be eligible. If true that's about 2% of Northampton's seniors or about .3% of the city's total population of about 28,500 citizens at large. Yet the simplified language is placed prominently in the question.
What it really boils down to in my view is trust and frankly, I am hard pressed to support increasing local property taxes in Northampton for an administration whose policies I frequently disagree with. As I see it most of the people responsible for the local, state and federal funding dilemma are still in power. Yes, George Bush and Mitt Romney are gone, but Obama and Patrick can only do so much as the state's and country's citizens are quickly learning, and they've recycled a good number of policy makers from past Democratic administrations as well.
To some that doesn't matter as more liberal social ideologies replace conservative ones, meaning that many who rampantly criticized the Republicans in power now just as fervently deflect criticisms launched at their own Democratic party leaders. This simple role reversal results in a zero sum game for the average citizen when it comes to spending. In short, do you want more guns or butter? The bottom line is that politicians of different political stripes are going to decide how to spend taxpayer monies through representative democracy, not direct democracy. This means if local pols are granted more taxpayer money through this override question, they will be content to run the city as they see fit, regardless of what you or I think as individuals.
With the exception of Redoubt, absent from the mainstream conversation on the local front is any mention of spending decisions made by mayor Higgins and her city council that might have contributed to the city's dilemma. But should we be looking in our metaphorical rear view mirrors? I think so. A few days ago I highlighted a handfull of the city's more recent spending decisions on my blog in a letter to Andrew.
If all goes well for the mayor's three point plan a budget gap projected at $6.1 million will be reduced to $1.4 million in a short time, pending the approval of the override by voters and the agreement of city unions to freeze the wage increases Higgins' negotiated with them not long ago and of course some layoffs. To me it's all just political theater as state and federal spending has been declining for years yet the mayor saw fit to negotiate said pay increases and to propose floating bonds for a new police station with money she does not have in hand to spend. This why I believe the mayor is a gambler and she's trying to hustle the taxpayer to some extent.
Here's more evidence of which I speak: less than two years ago during a time of declining state aid on June 22, 2007 journalist Dan Crowley of the Gazette wrote regarding the 2008 fiscal budget,
The city's $70.8 million spending plan for the next fiscal year is set in stone … With no discussion, the City Council swiftly approved the budget in a final vote Thursday … The mayor's budget represents a 4.7 percent increase over the current year's $67.6 million budget, with 56 percent of the revenues drawn from property taxes. With almost no net increase in state aid this year, it also relies on $1.2 million in reserves, leaving $745,591 in the city's stabilization, or "rainy day" fund. "We are using a significant amount of reserves," said Mayor Clare Higgins, of this year's budget, which goes into effect July 1. The mayor said she is hopeful that new construction growth in the next fiscal year will bolster the city's tax rolls. She also expressed confidence that the state Legislature would approve some sort of local option taxes for cities and towns over the next fiscal year. These two scenarios would mean less reliance on reserves, she said.
In other words, a short time ago when times were not quite as bad as they are now, Higgins gambled that things would improve and dipped into the city's cash reserves. In effect she rolled the dice and hoped for the best, but she lost in the end.
Then on March 13, 2008 Crowley wrote regarding fiscal year 2009,
And with the Legislature not approving a local meals tax option, which the mayor was hoping for last year, the city has few remaining avenues to plug what is today an estimated $2 million budget shortfall for the fiscal year that begins July 1. The city stood to reap about $1.6 million with a local meals tax option, and the mayor noted that she probably should have proposed budget cuts last year. "We hoped that would pass, and it didn't pass," she said of the meals tax.
So less than two years ago the mayor with council approval gambled and raised the city budget by 4.7% while hoping the state legislature would pass a meals tax and new construction growth would bail her out. Now the situation has deteriorated to the point where the mayor has a new gamble which is an override vote. In this way the mayor doesn't say no to the special interests that support her, while these same special interests align themselves with her policy decisions and encourage others to trust in her. As I've said before, the mayor favors direct democracy when it comes to cutting city services, but prefers representative democracy when it comes to spending on projects like the police station, senior center and so on.
I've been of the opinion all along that the override hype has been orchestrated by the mayor through an accomodating local media corps in order to scare the public into voting in favor, and it just might work. Even if it does pass though, the city faces structural problems with its finances that will not go away and override proposals and the accompanying hysteria will probably become a more frequent occurence. The problem is, what do most people actually know about the spending decisions made by city leaders, in detail? I think the answer is, not much.
