LONGMEADOW – The following article is submitted by Andrew Lam, M.D., vice chair of the Finance Committee in Longmeadow in an effort to explain Article 14 on the Town Meeting Warrant.

Longmeadow will consider many important articles at the upcoming (outdoor) town meeting on June 23, but arguably the most consequential may be article 14, which is a request to the state legislature to exempt Longmeadow from the Proposition 2½ tax ceiling. The purpose of this article is not to advocate for or against this measure -  it is to educate and provide information to help voters make their own best decisions. Longmeadow is at a crossroads, and from my experience as a member of Longmeadow’s finance committee for the last six years, I believe this decision, regardless of the outcome, will herald a momentous change in fiscal direction for our town.

First, some background. In 1982, Massachusetts adopted Proposition 2½, which instituted two important property tax limits. First, it specified that property taxes cannot go up more than 2½ percent  annually. Second, it placed a property tax ceiling on all municipalities - a town’s total property tax cannot exceed 2½ percent of the assessed value of all the taxable property in that town (not including debt and capital exclusions). You may have seen this described in terms of our “mil” rate, or tax per $1,000 of assessed property value - in these terms this 2½ percent tax ceiling is described as the $25/$1,000 mil rate cap.

Longmeadow’s current tax rate is $24.21/$1,000. We are thus approaching the $25/$1,000 cap and if we reach it Proposition 2½ prevents us from raising taxes any higher. The average home in Longmeadow, worth about $374,000, pays $9,055 in annual property tax. For the last several years, Longmeadow has borne the ignominious label as the town the with highest residential tax rate in the commonwealth.

There are several reasons for this. One is that our town provides citizens with a high level of services, particularly in our school system, whose approximately $36 million budget constitutes the largest portion of our $65 million general fund budget. Another reason is that Longmeadow is small and almost completely built out. There is very little space left for additional retail, industrial, or even home development. Many other cities and towns institute a higher tax rate for commercial properties, which helps them keep their residential tax rate lower, but Longmeadow’s relative dearth of commercial property precludes this from being a meaningful option for us. Although inflation has been remarkably low for many years, our town budget is heavily impacted by contractual increases in employee salaries, and mandated increases in health insurance costs and pension liabilities. These factors contribute to an inexorable increase in expenditures year after year, irrespective of the economy, housing market, cost of living or inflation. As a result, it has become very difficult for our town to consistently raise the revenue to meet the demands of a budget that rises even at a relatively modest clip of 3 percent annually. Each year, we almost always begin the fiscal planning season with projected revenues far behind what is deemed necessary to maintain a level degree of services for residents and students. This is why the tax rate has steadily gone up, and until a few years ago, practically always rose by the maximum 2½ percent, each year. This is also the reason why we are now approaching the $25/$1000 tax ceiling. If we hit the ceiling we will not be able to raise taxes further and this will necessitate significant cuts in town services and personnel.

The select board and finance committee, as well as a Tax Ceiling Task Force, recognized years ago that the current trajectory was not sustainable and that the proper course was to slow the rate of tax rate growth. The finance committee’s goal has been to keep Longmeadow’s intersection with the tax ceiling at least 10 years distant, and it has annually informed the select board what the maximum tax increase may be in order to achieve this. For the last three years, the select board and town manager have, in turn, approved budgets with tax increases below the maximum allowed 2.5 percent (this town meeting will consider a budget that reflects a 1.87 percent increase, for example). This strategy allows Longmeadow to make gradual cuts over the years to forestall hitting the fiscal cliff for as long as possible.

But at the same time, there is general consensus among town leaders that breaching the tax ceiling is inevitable due to the conditions already described above. And now that the negative economic impact of the Covid-19 pandemic may prove detrimental to the housing market, it is possible we may hit the ceiling far sooner than previously anticipated.

There are three possible solutions to the present dilemma: to significantly reduce spending; significantly raise revenue; or pursue changing the law to allow higher taxation. All of these options have been explored at length by the select board and Tax Ceiling Task Force. Frankly put, it is difficult for most governments to reduce spending, and Longmeadow is no exception. To make a meaningful dent in the budget would require eliminating dozens of positions over time - including teachers, firefighters, and police officers. This can certainly be done, but it is the rare and courageous politician who chooses to take such a stand in pursuit of true fiscal responsibility. I mean no offense by this - after over a decade of serving on various town boards and committees, I recognize that reducing our workforce means people, often our friends or colleagues, will lose their jobs. In a town as small as ours, these decisions can become very personal. Moreover, political leaders and town managers have a tendency to be judged by what new service, program, building or park they helped provide to their town. It is far more edifying to promote such things, especially when confronted with town meetings packed by attendees who show up to advocate for them, than to be the tight-fisted martinet who consistently recommends reduced town expenditures. As it happens, my finance committee colleagues and I often find ourselves playing the role of the latter, and this is why we know that even though it is very easy to complain about government spending, in practice, spending reductions of the degree that will be required in the future to keep us under the tax ceiling would probably be the hardest of the possible solutions to enact. This is not to say it could not be done, only that it would require a significant change in mindset among town leaders and townspeople.
 

Our ability to use the second solution - higher revenue - is unfortunately quite limited and to a large degree out of our control. We could, for example, increase revenue by charging residents for trash removal, go back to resident-paid kindergarten tuition instead of town-provided kindergarten, or increase local fees like meals taxes. But these and other methods are generally too modest to meaningfully combat the tidal wave of increasing employment costs that looms before us. The aspect of revenue that is out of our control is state aid, which can fluctuate but typically comprises about 10 percent of our budget.

This leaves the legislative option. The main problem here is that the state legislature has shown no particular interest in considering exceptions to the law for the sake of a town such as Longmeadow. And in actuality, this warrant article is merely a request for a “home rule” measure that is non-binding and would only be a first, preliminary step toward possibly someday, years from now, successfully eliminating the cap for Longmeadow. If this article passes, Longmeadow will request the legislature to allow us to waive the tax ceiling, but it may be 1-2 years before the legislature even chooses to consider the request. There is no guarantee they would grant it, and if they do, it would not take effect until Longmeadow confirms it via a ballot vote at the polls. So as much as some may hope for a legislative solution, it remains the least practical action we could take in the near term. The reason to consider doing this now is out of a desire to keep this option alive, knowing it will be years before it may be enacted. It is part of an “all of the above strategy.” We can continue to tighten our belts each year to postpone hitting the tax ceiling for as long as possible, but perhaps when we inevitably fall off that fiscal cliff, progress will have been made on the legislative option. Finally, it is important to note that, even if the tax ceiling is eliminated, each year’s budget must still be approved by town meeting and the 2½ percent limit on annual property tax increases would remain in effect.

And so, the decision is up to all of us to collectively decide on June 23.

If you wish to restrain an increase in taxes and feel Longmeadow should tighten its belt in more meaningful ways - via gradual reductions in personnel and services - then you should vote against this article. But please note that you should probably not underestimate the service reductions that would take place. All of us - young and old - would feel it. And you should also recognize that, although Longmeadow has the highest residential tax rate, we are far from the top of the list in terms of actual property tax paid - residents of many towns in the eastern half of the state with lower tax rates pay higher tax bills than us because their properties are valued higher than homes in Longmeadow.

If you fear our community and schools will suffer if services are reduced, and accept the need pay higher taxes to maintain the status quo, then you should vote yes because it will signal to the legislature that it is our collective desire to remove the tax ceiling. But please note that eliminating the cap will forever remove a fiscal backstop that might have had the beneficial impact of restraining runaway spending in the future. And you should also recognize that, even if we do not request legislative action now, we could do it in the future, and in the meantime Longmeadow would, by necessity, continue to control expenses to forestall encountering the fiscal cliff for as many years as possible.

(Note, the select board and task force considered the option of replacing the cap with a new, higher one, such as $28/$1,000, but the consensus was that it would be too onerous for the town to again have to go through the arduous, years-long process of legislative approval in the future.)

It’s banal but true to say that the most important thing you can do is simply come to town meeting and vote. Although nothing will change the day after this article is decided, it is likely to be town meeting’s most important decision because either outcome will signal a significant change in Longmeadow’s fiscal trajectory. I look forward to seeing you there.

Andrew Lam, M.D. is a retinal surgeon, author and vice-chair of the Longmeadow Finance Committee.