Why We Need An Override

This is no ordinary budget crisis. We are facing the largest budget shortfall ever. We are in the middle of a worldwide economic recession unlike anything we've seen since the Great Depression. Calling for an override when times are so tough is difficult, but it is necessary. Without it, we not only compromise our safety and our children's future, we risk making our local economic condition even worse and the road to recovery even longer. Vote Yes! on Tuesday, June 16th

The official language of the override can be found here. The override proposal would raise $2 million in property taxes with allocations of $1 million to the schools, $765,000 to city departments, including public safety, $180,000 to Smith Vocational and Agricultural High School and $55,000 for increasing the number of seniors who can qualify for exemptions. The annual cost to the average homeowner would be $165 or $3.17 each week.

In this web page, we will try to address what the override is and why it is necessary. It includes an override calculator to let you know how much your household pays in property taxes and how much the override would add, and sections on the budget shortfall, on what an override is, on why no other solutions can alone solve the shortfall, and on what we will lose, if we lose. Finally, there is a section on questions and aswers about the override, which we hope will address any concerns and arguments being made against it. If you believe there is anything missing, if you have concerns or have heard arguments against the override that we are not addressing, please let us know, so we can address them here.

Override Calculator

Use this calculator tool to determine what the additional annual tax burden would be on your home in Northampton if the voters of the community approve a Proposition 2½ Override Question in the Spring of 2009.

The calculator uses the current total assessed valuation of all properties in Northampton in FY2009. It is important to note that this is a Revaluation Year in Northampton, but we will not have a new total assessed valuation until November 2009. Therefore, the actual tax bill you would receive after that date may be slightly more or slightly less than the number you will get from this calculator tool, but we are confident that this tool will give you a very good estimate on your additional property tax burden in the event that an Override is passed.

The Budget Shortfall

Northampton faces an unprecedented $6 million budget gap this year. The school district's budget gap comprises slightly less than $3 million of that amount. The economic downturn and skyrocketing health insurance costs are driving this gap. The bigger revenue squeezing items include: State aid is down by $1.5 million. Motor vehicle excise taxes and interest income are down almost $500,000. At the same time, health insurance costs are up close to $2 million. You can see precisely how it all adds up on the city's website.

What We Will Lose, If We Lose

The good news is that worst case scenario -- failure to close any of the $6 million gap -- is not likely to happen.  There are several things still in flux (more below under "other solutions"), some of which could become resources for additional revenues.  However, with a budget gap this large, no matter what other revenue is realized, the $2 million raised through an override is critical to avoiding devastating cuts. We present the consequences of a $6 million gap to help us all understand the depth of this crisis, what's at stake and how far we have to go to avoid the worst.

Public Safety

25 fewer public safety officers, increasing the threat to our personal safety in the following ways:

• The Florence Fire Station will be closed the vast majority of the time.
• Fire Department will suffer a total staff reduction of 14 firefighters with 9 lay-offs and 5 positions remaining unfilled.
• Fire Department response time will increase, especially to the remote areas of Northampton.
• The Police Department will lose 11 full-time officers, reducing each patrol shift by one-third.
• The Police Department will have only four, one-officer cruisers for the entire city of Northampton.
• The threat to both the public, police officers and firefighters will increase since emergency calls are already "stacked" for later responses and often one police officer is available to respond to a call that mandates two or more.

Senior Services

• The number of senior programs and senior services cut back including escort grocery shopping, home visits, assistance with fuel, foodstamp and health insurance forms, and information and referrals.
• Program cuts to the handicap van for seniors.
• The Senior Center will reduce staff resulting in the reduction of hours spread over several positions.

Education

The impact on the quality of public education in Northampton cannot be captured in a single figure. The cuts currently on the table would require significant restructuring of how and what our kids are taught in the middle and high schools, seriously compromising their learning and their future. Proposed cuts include:

• 48 fewer teachers in our public school system, resulting in class sizes of up to 45 children at all levels.
• The elimination of school bus transportation for all 7th & 8th grade and high school students.
• The elimination of band at the high school.
• Northampton High School faces reductions in Math, Science, English, Social Studies, Foreign Langauge, Art, & Theater Programs.
• Northampton High School faces the elimination of the yearbook, the journalism class, the video and photography class, the culinary program, class advisor, the National Honor Society Advisor, the Debate Club, the Drama Director, the Music Director, the costume coordinator for the musical.
• The elimination of all school athletics without private pay.

Public Works

• 9 fewer public workers responsible for repairing and plowing our roads.
• The Department of Public Works would no longer maintain sports fields, which includes mowing and other upkeep. Activities at these fields would be severely reduced unless private leagues take over the task. Additionally, other recreational programs for children and adults that take place on these fields might also be reduced.
• The number of streetlights across the city would be reduced by 25%.
• Road repair and shade tree-trimming requests will take longer to accomplish.

Other City Services

• The closing of our public libraries on Saturdays and reduced weekday hours.
• City Hall will close earlier, reduce walk-in hours, and no longer process passport applications.
• Longer waits would be likely for zoning enforcement and public health complaints. These include a wide range of complaints such as junk vehicles on a property owner's lawn or nuisances such as odors, noise and excessive filth.

The impact on the quality of public education in Northampton cannot be captured in a single figure. The cuts currently on the table would require significant restructuring of how and what our kids are taught in the middle and high schools, seriously compromising their learning and their future.

The budget gap also has serious implications for public safety, with fewer police, fewer fireman and emergency rescue workers, and longer delays in repairing and paving roads. This inevitably will result in an increase in crime or more crimes left unsolved, an increase in fire damage or inability to rescue someone in an emergency situation in time, and more damage to cars and winter related accidents. You cannot make cuts as deep as these without seeing an effect.

In addition, with larger class sizes, fewer schools and weakened public safety, we can also expect to see a drop in home values. Right now Northampton is seen as desirable place to live, but with cuts as big as these, we should recognize that we will all see a decline in our home equity. A decline that, in itself, could lower revenue and cause even more crises down the line. Eventually, a weakened fire and police department could also result in higher home and auto insurance for residents of Northampton.

Other Solutions Alone Are Not Enough

What about the federal stimulus? The meals tax? Health insurance savings? Wage freezes?

Looking at all of these revenue sources, they don't come close to closing the gap without an override. Here's what they offer:

• The federal stimulus: Right now, Northampton is slated to receive close to over $500,000 in stimulus funds that are designated exclusively for special education and Title 1 (math and reading assistance distributed based on the number of income-eligible children). As it is presently configured, none of this money will address our present school budget shortfall. We must all continue to advocate for more from the Governor, but right now this is all we've got.
• Local option meals tax: This requires state legislative authority and while legislatures are hopeful it is not certain whether it will be passed. Our state legislators, Representative Peter Kocot and Senator Stan Rosenberg, are hard at work to win this legislation. If passed and enacted by the city council, the meals tax would raise roughly $250,000 (and likely less in view of the decline in people dining out during these hard times). Less likely is the passage of a statewide 1% meals tax (would raise $520,000) or 1% hotel tax ($100,000).
• A new, cheaper health insurance provider: The city has a couple of proposals on the table that could save significant dollars. The city is working hard with the unions on this issue, but it's impossible right now to attach even a rough savings estimate.
• Wage freezes: All non-union city employees have already agreed to a wage freeze. Union employees are facing extremely difficult decisions. If every union agreed to complete a wage freeze, the maximum savings in this arena would total around one million dollars.

In the best case scenario, assuming all the possible revenue sources and savings materialize, we would close our budget gap by less than $3 million. That leaves another $3 million to go. We need the override no matter what happens.

What Is an Override?

Proposition 2½, passed by ballot initiative in 1980, is a state law that limits annual increases in a community's property tax revenue to 2.5 percent. The law requires that anything larger should go before the public as a referendum. In other states, such as New York or Connecticut, there are no similar requirements. When towns face a serious budget shortfall, the elected leaders find a way to solve it through budget cuts and, if necessary tax increases. The law was designed to give voters a voice. It was not designed to prevent a town from ever addressing increases when they were needed.

Northampton has not approved a general override in 20 years, which is why it is slipping behind many communities. But passing a general override in most places has not been as rare as it has been in Northampton. There have been a total of 1,800 successful overrides in 254 cities and towns in Massachusetts. Those that have not tended to have general overrides are larger cities that can more easily find alternative means to raising revenue or very poor communities that get a lot of their funds from the federal or state government (e.g., Boston, Pittsfield, Fall River, New Bedford, Chelsea, or Chicopee. All of Northampton's neighboring communities have had multiple successful overrides.

An override is something that happens when the times call for one. At a time of economic downturn and a budget gap than cannot be just cut away with serious damage, the time is right in Northampton.

To learn more about Proposition 2½ overrides, click here.

Questions & Answers

We will be constantly updating this section as new questions arise over the course of the campaign. You can find PDF version of this section here, in case you need to print it out.

Q:  Why do we need an override this year - can't we just make some cuts without the override?

A:  The budget gap this year is now $5 million dollars.  It far exceeds anything that Northampton has ever faced before. If we tried to close this gap through cuts alone, we would lose 32 teachers, 9 police officers and numerous programs and services. There is no way to cut our way out of this year's deficit -- it is just too large.

Q:  What will this override do?

A:  If passed, this override will raise $2 million in property tax revenues.  The law requires that the funds be allocated as follows:  $1 million to the schools, $765,000 to city departments, including public safety, libraries and roads, $180,000 to Smith Vocational and Agricultural High School and $55,000 for increasing the number of seniors who qualify for exemptions and raising their property tax rebate from $500 to $650 each year.

Q:  How much will it cost?

A:  This override will cost $62 a year -- or $5 a month -- for every $100,000 of assessed home value.  The average homeowner will pay an additional $3.17 each week.  This could be difficult for some people, but we are hoping that paying more in property taxes is a better alternative to losing firefighters, police, snow-plowing, senior services, library hours and quality education. 

Q:  Isn't this override too expensive for seniors on fixed incomes and won't it force them out of their homes?

A:  Right now there is a tax exemption for seniors with limited incomes, and the override raises the income cap to allow more seniors to receive the exemption and raises the rebate amount from $500 to $650 for qualified seniors.  If the override passes, the income limit for seniors 70 years of age and older will increase by $5,000 to $21,930 for individuals and $25,895 for married couples.  The asset limits, which do not include a house or car, will remain the same at $28,000 for individuals and $30,000 for married couples. If the override wins, there will be some seniors who will actually pay less in property taxes than they do now.  In addition, there is a state senior "circuit breaker" which gives rebates to seniors who are paying more than 10% of their income in property taxes, and water and sewer bills. 

Q:  Isn't Northampton already taxed too high and higher than comparable towns?

A:  Actually, compared to every town in western Massachusetts with populations over 10,000, Northampton property owners have the lowest property tax rate ($11.48 per $1,000 of assessed value).  Northampton's rate is 25% lower than what property owners pay in Amherst.

Q:  The city is full of waste and fat, and we should just cut that part of the budget, shouldn't we?

A:  The problem we face is a revenue problem not a spending problem. The city lost 20% of its local aid under Governor Romney, and the State has never restored local aid money to former levels. The city receives less money now from the State than it did seven years ago and is facing a $2.5 million cut in state aid next fiscal year. The city is well run financially and has a bond rating (A1) higher than all of our bordering towns. If we continue to run structural deficits, our rating could go down and it would cost the city more to borrow funds.  No residents who complain about waste and fat have actually shown the millions of dollars of waste that could be used to close the gap.

Q: Will the money raised from the override just pay for union wage increases?
A:  A: The override is not about increasing or decreasing wages, but about replacing devastating cuts in State aid and other revenues in order to restore jobs and services. The City's fixed costs -- things like health insurance, utilities and, yes, contractually obligated salary increases -- must be paid with or without an override. Deep cuts in jobs and vital city services will be made to meet those costs and balance the budget on July 1^st unless we are able to generate new local revenue through a Proposition 2½ override.

It is true that the City and School Department are negotiating with their respective unions about wage freezes. Some of those talks have been successful while others are ongoing and the savings from these and other attempts to lower fixed costs have helped lower our budget gap and restore even more jobs and services. But the fact remains: even if every salary was frozen we would still be forced to layoff dozens of police officers and teachers and cut city services because of the overall size of the budget gap. There is no single solution to this unprecedented problem. Failure to pass an override can only make a bad situation much worse

Q:  What about the $1.2 million spent to acquire the land around the landfill? How can we pay for that when we say we're broke??

A:  The City Council recently authorized The Solid Waste Enterprise Fund to borrow $1.2 million to acquire properties around the landfill. The Solid Waste Enterprise Fund is not part of the City's general budget, contains no tax dollars, and is comprised solely of revenues generated at the landfill and transfer station. The monies that comprise the Solid Waste Enterprise Fund can only be spent in support of the DPW's Solid Waste Division (e.g. salaries, trucks, land acquisition, etc.). Similar enterprise funds exist for the City's water and sewer systems and none of the borrowing or spending from these funds impact the general budget or the current fiscal crisis.  

Q:  Why doesn't the city just create a local meals tax or some other tax?

A:  In Massachusetts, the state must grant authority to a city to create any local taxes. The State Legislature is currently considering legislation that will provide that approval, but it has not yet been passed. Right now, the only way we can raise funds locally is through the property tax.  

Q:  The Northampton government always starts the budget season by saying "the sky is falling" and then always comes up with the money as we get closer to the summer. Why is this year going to be any different?

A:  The city has made cuts for years when it said it would make cuts. In previous years, the schools have lost assistant principals, librarians, reading teachers and gym classes. Other city departments have undergone staff cuts.   And the city has used its "rainy day" stabilization fund, which was at $2.4 million in 2003, to fill the gaps created by drastically declining state aid.  That rainy day fund is now down to just over $200,000. There is nothing left.

Q:  Aren't we getting federal stimulus funds to prevent cuts to teachers?

A:  Northampton did not receive any federal stimulus funds from the State because of funding formulas that disadvantage our city. We received some special education funds and other limited funding, but that money can only be used for specific purposes.

Q:  What about the sales tax money -- won't that solve the problem?

A:  Debate continues in the State Legislature around passage of a sales tax increase, but there is no assurance it will be passed. If it is enacted, it is unclear that any of the revenue will be allocated towards Local Aid.

Q:  I am so sick of these budget problems, what can we do to fix them and can't we fix them without a regressive tax like the property tax?

A:  Everyone is tired of the repeated budget problems, but the root of the problem is the State cuts in local aid over many years.   Also, the city is not allowed to create new sources of revenue, like the local meals tax, without state approval. As costs like energy and health insurance go up every year, revenue does not go up. Groups in town have advocated on the state and national level for fair funding for cities, and will do so again this year. But the only way we can help ourselves right now is to stay united and pass this override.

Q:  Why can't citizens fundraise and donate money to close the gap?

A:  Based on fundraising efforts in previous years, we know it is not possible to private raise $2 million in 6 weeks from the people of Northampton.  Taxes share the burden more equally and are the only way to get to the figure -- and the services -- we need.

Q:  We seem to have overrides every year. Why do we keep needing them?

A:  In fact, we have enacted only one general override for the operating budget of Northampton since 1980, when Proposition 2½ was passed. There are fewer override votes in Northampton than in the average town. The last general override vote was five years ago, and it failed by seven votes. The last increase in property taxes because of a general override occurred twenty years ago. There are also override votes called "debt exclusions" for the construction or renovation of buildings. Three "debt exclusion" overrides have passed in the last twenty-seven years, including overrides for the high school addition, the new fire station and middle school improvements.

Q:  Shouldn't we just have closed an elementary school?

A:  The money saved in closing an elementary school, after factoring in unemployment benefits, would likely have been around $50,000 next year, not enough to be worth the problems that arise from the permanent closure of a school.  Enrollment data alone did not warrant closing a school, according to the City's Strategic Planning Committee report.

Q:  The override is a permanent tax increase, which will continue even after this year's recession ends.  Isn't this too permanent a solution?

A:  Under state law, cities cannot pass a temporary override. However, we will need more than a one-year fix, because of our revenue problem, which creates a structural deficit year after year.  We actually need revenue that will not just end in one year, as the state and federal budget problems grow worse each month.

Q:  Why don't we just cut our administrative staff instead of teachers, don't we have a very top heavy administrative staff?

A:  There are no more administrative positions to cut at this point after all the cutting over the last few years, including all elementary vice-principals and the curriculum coordinator for the district.  Our administrative costs compare favorably with surrounding districts like Amherst.

Q:  Why don't we tax Smith College?

A:  State law does not allow taxing Smith College's educational facilities.  Smith donated $100,000 to the public schools last year, but due to their own budget shortfall, we cannot expect further contributions this year.