Your View (site blog, not mine personally)
Oh, oh ... overrides, debt exclusions and other issues on the horizon
Current, future ballot issues
Included on the ballot will be costs for a feasibility study for the high school, a likely addition at Thompson and middle-school renovations at either Gibbs or Ottoson.
A ballot vote to authorize the town to borrow money for a new high school will happen after we have better numbers from the feasibility study (which is expected to take at least a year). It isn’t clear when we would go to voters for a solution to expected overcrowding at Hardy, or if we can shift enough students with buffer-zone expansions to avoid that project.
Complicating matters is the strong possibility that the town will need to go to the voters for a debt exclusion for Minuteman if the building project is approved. Arlington's share of a new Minuteman building is expected to be between $34 million and $40 million. Here is the timing for Minuteman:
· Over the next 60 days, the towns that are part of the Minuteman regional district, including Arlington, will vote on whether to approve the new building.
· As soon as one town says no (which everyone expects to happen) the Minuteman School Committee is likely to call a regional vote to approve the building. This vote is expected to happen sometime in mid-May.
· If the vote passes by a majority of residents across all towns, then Arlington will have to find a way to pay for the building, which means that we will need to ask voters for a debt exclusion.
Debt exclusion, overruide explained
A brief explanation of the difference between a debt exclusion vote and an override vote. A debt exclusion is similar to a mortgage. To fund a project -- e.g., new building or large-scale renovations -- the town borrows money for either 20 or 30 years. Taxes are raised to pay for the financing of the debt.
Similar to a mortgage the amount we need to pay each year is fixed, which means that the real cost of the project to taxpayers will decrease over time, because inflation will erode the value of those fixed payments. Also, similar to a mortgage, the cost will eventually go away, albeit in 30 years.
An override is an increase to the tax base. In 1980 voters in Massachusetts passed proposition 2 1/2, which is a restriction on how much the average taxes in a town can go up each year. The only exception to the 2.5-percent cap is new growth. Arlington has very little new growth, but what it has ensures that tax receipts can effectively go up by around 3%. In towns with lots of open space for new business development (Burlington, for example) their taxes receipts can go up by much much more, which allows them to avoid overrides.
Other towns, such as Arlington, have less open space on which to build and so need periodic overrides because the cost of services are going up by more than 3 percent a year. Arlington will always have what is known as a structural deficit (costs going up by more than 3 percent a year) as long as costs for health insurance, pensions, and special education are going up by more than 3 percent a year, which they are.
Additionally, the cost of educating Arlington's students is currently going up by more than 3 percent a year because of our rapid enrollment growth.
In 2011 Arlington passed an override that was expected to last three years. Because of sound financial planning in the town we are now in the fifth year of that three-year override, but eventually we will need to go to the voters for another one. According to the town’s current five-year financial plan the latest another override can happen is in 2020.
So, Arlington is facing many tax increases in the future: Our need to fund building projects to handle school-enrollment challenges, the Minuteman building, our new high school building and an upcoming override vote.
Passing these tax increases will not be easy. They will require troves of dedicated community members. We have done it before, and we can do it again, but no one should underestimate the amount of work it will take.
This informational newsletter was republished Tuesday, March 15, 2016.
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