Taxes and Fees

Back to the Revenue Task Force report.

The report does a nice job of answering a relatively simple question: What are the sources of city tax dollars, and how do they compare to so-called comparable towns (Ashland, Bedford, Holliston, Ipswich, Lynnfield, Melrose, Newburyport, North Reading, Swampscott and Wakefield.)

These are all FY06 figures.

According to the report, on average, property taxes account for 75% of General Fund revenues for those comparable communities. Newburyport tax payers shoulder a higher burden with 80%.

On a per capital basis, Newburyport taxes are higher than average, roughly $2,060 vs. $2,024. I can’t figure out how to publish a chart here so go to page 23 on the report. The $36 difference means we pay approximately $627,000 more in taxes than folks in the comparable communities.

However, before you go screaming, aha!

Newburyport collected $24 fewer dollars per capita in licenses, permits & fees AND $27 less per capita on charges for services. This amounted to $960,000 fewer dollars into the city’s coffers in 2006. (One caveat, I don't know how user fees at schools play into this.)

So are we overtaxed for our properties or undercharged for our services? I've maintained that it's the latter, particularly when it comes to parking, and the data seems to back that up.

It will be interesting to see if the mayor and city council have the desire and political will to address any fee inequities. After all, the city could use the $300,000 that's apparently going uncollected.

Raising fees isn't a decision made by a ballot box so this can't be passed onto voters, at least not directly. The final word comes from banging of a gavel or the signing of some document at the corner office of City Hall.

Those same voters, however, might have a thing or two to say the next election cycle.

To be fair, I'm sure some will point out that the current breakdown is fair. Fees are considered a regressive tax as higher and lower income folks pay the same amount. It can be argued that the folks with a nicer home can afford to pay more for an equal share of city services.

But if we lean too heavily on property taxes people who are house rich but cash poor may get squeezed from their homes. Plus, is that fair?

More coming from the report.

.

Revenue Task Force Report-Teacher Salaries

I'm not a teacher basher.

I've got great respect for the profession. I may occasionally covet their summer vacations, but I recognize the work can be difficult if it's done right. I don't resent them their salaries, particularly because of the level of education that we require these folks to have (and the school loans that go with those educations.) If we want to get bright minds to teach our kids, we must pay reasonably well or lose them to better-paying professions.

Despite this still deep respect, I was struck by one item on page 20 of the Revenue Task Force Report. The chart--a fairly typical line graph you'll find done in an Excel document--compared Newburyport's average teacher salary with the group of comparable communities used throughout the report. (Ashland, Bedford, Holliston, Ipswich, Lynnfield, Melrose, North Reading, Swampscott and Wakefield). The chart presents annual average teacher salaries since fiscal year 2002.

I was surprised to see the line representing Newburyport's average teacher salary never fell below the state average. The info on the chart contradicted the explanation I've always heard about the reasoning behind the significant salary bump in the 2002 teacher contract. As I was told, the school committee, reacting at least partly to a state Department of Education report that the city's teachers were among the worst paid teachers in the state, negotiated a generous contract that bumped up salaries to competitive levels. In my eyes this is a sound strategy to keep our best teachers in house.

But here's the problem. That apparently wasn't true. From the report:

In 2003, data published by the DOE indicated that the average salary for Newburyport teachers placed them in the bottom 10% statewide. Based on this data, the School Committee negotiated a contract to align teacher salaries with competing districts. In January 2008, the DOE published adjusted salary figures (shown above) which pushed the average FY02 Newburyport teacher salary above the statewide average.

Yikes. So when the school commmittee negotiated the 2002 contract to remedy the problem of rock-bottom teacher salaries our teachers actually were getting paid above statewide average? That's not going to play well, nor should it.

The little note ends with this...

While this information was not available to the School Committee before the most recent contract was negotiated, it should be considered in the current round of negotiations.

It certainly should. If I'm painting an incorrect picture of the situation I hope someone will let me know. The report correctly notes that things like layoffs of less experienced teachers can cause the average to rise as their smaller salaries are cut from the equation, and I'm told Newburyport has cut more than 70 full-time positions over the past five years.

But my reading of the report, particularly the statement mentioned above, leaves me with the impression that the discrepancy isn't the result of layoffs. Sounds like the school committee got ahold of some bad DOE information.

.

Revenue Task Force Report

Quite an opener.

Findings

The task force members unanimously agree that:
1) Newburyport currently does not have funds to sustain the level of municipal services currently being provided.
2) Costs continue to rise at approximately 5% annually with revenues limited to a 2½ % local property tax increase plus the dollars generated from new growth and local aid from the state and federal government.
3) The city does not anticipate a significant increase in state or federal assistance this year.

Ay caramba.

Revenue Task Force

I came out to bury the Revenue Task Force, not to praise it.

Well, not bury it. I was just a bit underwhelmed by the principal conclusions of the task force that have been in the papers.

* Override/debt exclusion
* Sell city property
* Convince employees to join the state-sponsored health care program
* Dip into the state's rainy day fund.

Each suggestion is reasonable, but I didn't think we needed a three-month study to come up with them. So I was left underwhelmed although I appreciated the work that went into coming up with those rather obvious solutions.

But even though I never wrote that post I take it all back. Why? I actually read the actual report. Fascinating stuff. Very thorough. Very interesting.

I'll say right now newspaper reports don't do the actual report justice. There's much to think about, talk about and act on in those 55 pages.

This should be read.

I'm going to do my best to offer some insights on the report in upcoming posts.