If approved, Northampton's tax override will perpetuate the political status quo

As the days dwindle down toward the June 16 vote on Northampton's proposed tax increase, the hysteria is building. In the Boston area the trend is that a majority of municipalities attempting local tax increases are successful. Eleven out of sixteen communities voted recently to override their local property tax levies according to the Boston Globe, Property Tax Hikes Winning Support. With that I'm going to step out on a limb and make the bold prediction that Northampton's override will pass 53%-47%, which would be pretty close considering there is no organized opposition to the measure. The YES committee has done a great job of banging the override drum and swarming the city looking for swing voters and I believe this will pay it dividends. Of course since there is no local public opinion polling this is just a gut check estimate, but that's all I got. Others feel that the override will fail because of the poor economic climate.

For the most part the YES rhetoric contains much fear and trepidation and many good people are supporting the override. Many good people are opposing the override too. Personally I believe the mayor is a gambler and that she is bluffing when it comes to cutting 33 teachers from the schools if the override fails. If that scenario does come about, the political pressure brought to her doorstep by parents will be intense and it will likely force her hand to cut other departments more deeply than she is letting on.

If the override passes the mayor has indicated that there is more than $1 million sitting in a capital stabilization fund that can be tapped, so brace yourselves for a sunnier day and headlines declaring RELIEF thanks to the mayor's, "strong leadership." The money originated from the city's free cash and was placed in the stabilization fund to make bond payments on the proposed new police station. According to an August 2008 email I received from the city's finance director, Christopher Pile, the balance of the capital stabilization fund at that time stood at about $1.745 million. Since that project is on hold those funds are now available for other uses. If the override fails, the mayor has stated that some of those funds would be used for unemployment compensation payments. In other words things might not be as bad as they have been framed and the mayor will come out looking like a fiscal hero in a campaign year. In my view her dalliances as a local thespian are paying off and the general public has been somewhat duped by Higgins and a willing media.

Nonetheless, duped or not, sacrifices will be made. Supposedly there will be cuts either way so the mayor and council should suspend all nonessential spending until economic conditions improve, though that is merely stating the obvious. That means for instance, when a controversial proposal like the BID arises, which in this case includes $35,000 annual payments from the city plus additional $50 thousand annual payments to the Academy of Music per the BID memorandum of understanding, the council should tighten its belt and say no as it did recently with the proposed police station. Of course I believe the city has already expended about $1 million on the plans for the station which should have been brought before the voters as a debt exclusion override before a penny was spent, but no matter. The point is the mayor and council have traditionally not adopted a pay-as-you-go mentality when it comes to spending and I hope that changes.

Another example are the Tax Increment Finance (TIF) agreements the city has been entering into recently. These agreements are designed to benefit businesses that might leave or not relocate to a community in the event of not receiving such a tax break. Kollmorgen recently applied for one and it will be approved. It seems that the mayor and council have created an expectation in the business community that TIF agreements are free for the asking. A partial result is that middle class residential property owners will continue to shoulder an increasingly disproportional share of Northampton's tax levy.

The table below from the January 2009 minutes of the Economic Development Land Use and Housing Comittee shows that the city has given back more than $82 thousand in property taxes to local businesses, businesses that very well might not have left the city were they not granted the TIF. The Kollmorgen TIF alone will cost the city an additional $51 thousand in lost property tax revenues, bringing the total of local property tax exemptions to more than $133 thousand.

Since the most lucrative and significant economic benefit to TIF businesses stems from state tax credits, the mayor and council should negotiate to have TIF recipients give back their local tax exemption, as did Wright Builders in the form of off site improvements to their project. This should be the norm in my view as the Kollmorgen TIF carries with it about $900 thousand in state tax credits. Of course the irony is that the city, which generally prides itself on its anti-war/anti-Bush posturing, is granting tax breaks to a defense contractor. Go figure.

Moreover, TIF agreements often project job gains or preservation. The table below should read, "Projected New Jobs Created," and should include an, "Actual Jobs Created," column. For example, not long after the Gazette was granted a TIF with the promise that they would create two new jobs, it fired nine employees (6 at the Gazette and 3 at the Valley Advocate).

When YES people ask for examples of unnecessary city spending it is clear that they have not done all of their homework in this regard, at least not to the same degree that they've studied state financing. (I've outlined other spending issues with the city in prior blog entries so I'll spare you the repetition.) For what it's worth, I will be encouraged if members of the YES committee scrutinize future spending decisions the mayor and council promulgate. Along with Higgins' stalwart allies I've noticed a lot of new faces speaking out in favor of the tax increase and I hope that their involvement in the community is not temporary. Not that they care, they will win me over should they expand their focus beyond the schools as we move forward. In this case the YES committee is collectively giving the mayor and the council a pass and I fear once the override passes many YES members will vanish into the woodwork of the community while mayor Higgins continues to drive the bus so to speak, seldom looking in her rear view mirror. I think the first question tax increase proponents could help address is, what should be considered essential when if comes to municipal spending?

One of the reasons I oppose the tax increase is because I believe if it passes it will perpetuate an atmosphere of adherence to the status quo and Higgins will view it as a mandate to proceed as she wishes. The YES people are essentially going to hand Higgins a mandate. Why is this problematic? Well, because Higgins has proven repeatedly that rules are meant to be broken. Take the Citizens Advisory Committee for the Northampton State Hospital (CAC) for example. A recent review of the CAC's March minutes (DOC) reveals that included as a member of the CAC is Jack Hornor, representing the city's Housing Partnership. A YES supporter, Mr. Hornor is a political confidant of the mayor and is actively involved in her campaign for re-election. He recently stepped down as chair of the city's Community Preservation Committee, a board the city council appointed him to. According to the founding legislation of the CAC (PDF, p. 5) one member of the Housing Partnership is required to serve on the CAC. Here's the twist, Mr. Hornor is no longer a member of the Housing Partnership (HTML). As the CAC has had but one chairperson since 1994 in Higgins, it is likely that she is fully aware of the statutory requirement, but has simply looked the other way which empowers one of her political supporters.

In the interests of best practices, how does a person that is not a member of a deliberative committee, a person that is not required to attend its meetings nor to cast a vote, represent that committee on another board charged with overseeing a multi-million dollar redevelopment project? Moreover, by allowing such a practice, a precedent is set with regards to committee appointments. For instance, perhaps I should apply to join the CAC as a representative for the Northampton Chamber of Commerce. Seeing as I'm not a member of the Chamber, I doubt that I would be approved, but you get the idea. As well, if Hornor is to represent the interests of the Housing Partnership then somehow the membership of the partnership must communicate with him. How precisely is that done? Is it possible that the Open Meeting Law could be violated? Maybe. Hornor's status on the CAC exemplifies one of the slippery slopes of government, where allowances are made for a chosen few and Higgins seems not to concern herself with appearances.

With the bells clanging loudly for ethics reform at the state level, why not start locally? As a consequence of Higgins' practice, Mr. Hornor is accountable only to himself and the mayor with regards to his votes on the CAC. Clearly the solution seems simple, either Mr. Hornor rejoins the Housing Partnership or the Partnership selects a sitting member to serve on the CAC as the legislation calls for. As was once said about Richard Nixon when he was the U.S. president, the mayor and Jack Hornor are not above the law and they should abide by it while working to change it if they don't like it. Unfortunately, passing the override will perpetuate this type of behavior by providing the funding for Higgins to continue business as usual during these unusual times.