By Corinne Hogseth
Acton taxpayers should be aware of ongoing discussions regarding a massive property tax override being pushed by the schools for the 2024/2025 school year. On October 27, Superintendent Peter Light sent a memo to the School Committee informing them of a shortfall of $7 million going into the FY25 budget planning cycle. In subsequent meetings, that number has climbed to as high as $8.5-$9M – and this doesn’t include the Town.
Many are wondering – how did it get this bad this fast?
I don’t want to bury the lede here – the average single family property tax bill would increase by approximately $130 for every $1 million of override. A $10M override means a $1,300 increase on the average property tax bill. Add in the typical annual increase, and many would see their taxes go up by over $1700 should a $10M override be approved by voters next spring.The bigger the override, the bigger the tax hike – and it’ll continue to grow higher forevah.
A Little Background
May 2022 Town Meeting (for the FY2023 budget), an amendment to the school budget was proposed to reduce Acton’s share of the school budget by $1.25M. This was Acton’s share of the $1.5M the district was taking out of reserves to make the 2023/2024 budget work. The amendment was meant to highlight the fact that one-time sources of funding and reserves were being used to pay for ongoing operations, which put the town on a path to an override in the next one to two years. At that meeting, it was pointed out that on page 20 of Town Meeting Warrant, the Acton Leadership Group was projecting a $4M+ deficit by FY25 and a $5M+ deficit by FY26 (town and school budgets combined). They always project a deficit, which they typically are able to plug when unused funds are returned to reserves.
However, they had never projected such large deficits in those out-years. Their FY23 budget also failed to consider 8.5% inflation that was present at that point in time, as well as the new teachers’ contract that would be negotiated in early 2023. The amendment was defeated by about a 40-60 margin — but this was supposedly close enough that the committees had their cages rattled a bit.
Just seven months ago, the 2023 Town Meeting Warrant (page 19) projected less than a $2M deficit for FY25. This was around the same time the new teachers’ contract was finalized, locking in raises and cost of living adjustments through June 2026. Inflation was still high. Even though the budget was still relying on covid-era funding and reserves (are you seeing a theme yet?), the FY2024 budget as presented was not unreasonable given these known factors. Turns out that the budget and projections were completely unrealistic.
It must also be noted that the Acton Health Insurance Trust (HIT) is in trouble, due to several large claims at the end of fiscal year 2023 (ended June 30), as well as running down reserves by not passing on the full cost of premium increases to employees in previous years. Premiums are scheduled to increase 22.8% as of January 1, 2024. More on that below.
Structural Budget Issues
Enrollment peaked in the district between 2008 and 2010 at about 5900 students. As of October, total enrollment is down to 4990, a decrease of about fifteen percent. A very slow rebound is projected, but there is simply no getting around the fact AB will not see enrollment approaching 6000 students for the foreseeable future.
It is imperative that the school administration make meaningful structural changes to address this reality. While enrollment has decreased, budgets have not only increased, they have relied upon use of reserves, which are now nearly depleted.
Recent Discussions
At the November 16 School Committee meeting, there was mostly discussion justifying the full ask and probably more. I heard no suggestions for how costs might be reduced. It was acknowledged that the final numbers are simply not known yet. The school administration has until February to finalize the budget. However, given that every time they mention a number it’s higher than the previous estimate, the more time they have, the worse the impact is likely to be on taxpayers.
On November 22, Superintendent Peter Light shared with school employees the decision by the School Committee to cover their portion of the 22.8% premium increase through the end of the fiscal year, at a cost of over $400K to the district (aka, taxpayers). They may justify it by saying it’s coming out of some other pot of money, but those pots are all filled by taxpayers. They continue to kick the can down the road rather than face fiscal realities, putting on full display the type of decision-making that got us to this point in the first place. I don’t see how this doesn’t also get baked into the override somehow.
Looking Forward
School leaders must listen to citizens to ensure that our priorities – NOT THEIRS – are reflected in the budget, especially if it means we have to pay more for them.
I have my own ideas for where we can make meaningful cuts. Not all can be done quickly or as part of the budget process. What are your thoughts? Are you up for an override at all? It’s been nearly 20 years, so maybe we’re due for one. But how big of a pill are you willing to swallow?
By the way, the town will be coming to us with a debt exclusion override in either 2025 or 2026 (probably when the debt on the Parker-Damon building is retired). They will be requesting approximately $40 million to build a new public works building (at the transfer station). Budget increases by the schools have forced the town to put off a lot of capital expenditures, primarily maintenance of facilities. But those bills are going to come due.
There will be many conversations over the next few months. To keep informed, you can attend Select Board and School Committee meetings, in person or online (zoom links on agendas). Acton Leadership Group meetings can also be interesting, as they are attended by representatives of three major boards. You can also watch all of these meetings on ActonTV in your spare time. 😉 (They take a little time to get posted, but you may be able to find them on YouTube).
The town and school district have very little time to cobble together an override. Typically, they are socialized about a year in advance, at the previous year’s Town Meeting. However, it’s been a long time since Acton passed an operating override, so there is very little institutional knowledge on our current boards. And it shows.
2 questions:
1. Would it be possible to do a smaller override to cover half the budget gap?
2. Concord has a system where people with the priciest houses pay higher rates than those with more modest houses. Although the distribution of housing prices is different, is there a way to shift a greater portion of the burden to the most well-off?
The figure they’ve settled on is $6.6M for an override. This is despite the fact that they have since learned that they’ll save $800K-$1M on health insurance starting July 1. There are many other areas where the schools could save money, but they never will if this override passes.
The Select Board Chair addresses the relationship between these savings, the budgets, the unknowns, and the anticipated untaxed levy capacity. https://www.youtube.com/live/M7CsF-UPx3s?feature=shared&t=5561
Re #2 — there is an option to adopt different tax brackets based on assessment. This was presented at a BoS meeting a little while back. I get the feeling it’s something they have to vote on every year, but I could be wrong. Bottom line: the formula (again, don’t know who decides this, the state or the town?) would result in people even with below-average assessments paying higher property taxes. They did not have a formula that would have homes assessed over $2M (just an example) pay a higher rate to relieve everyone below some threshold.
I absolutely cannot accept a tax override, the tax burden is already almost unbearable as it is. Acton has one of the highest tax rates in Middlesex County, this is not acceptable. I really liked Nijan Datar’s comment and I would add that the school district seems to be wasting money on useless stuff like re-designing the school’s logo (really?) or buying new buses for the football team. One has to wonder what planet these people live on, at a time when the portion of low income families in Action is going up, not down.
Good summary, Corinne. If the Town and School Boards are serious about finding savings, the following places are a good place to start:
1) Since enrollment is 15% below peak, we should determine how many administrators were on the payroll in 2010, and how we can cut 15% of admin staff.
2) Class sizes may be able to be increased by 1 or 2 students, especially if doing so allows a small reduction in teaching staff.
3) As has been suggested elsewhere, schools in the same building (McT/Merriam and Douglas/Gates) may be able to avoid duplicating staff and services.
4) Serious thought should be given to moving the Conant students to the other schools. If it cannot be done this year, there should be a plan to do so in the next 2-3 years. This won’t avoid the need for an override, but savings in subsequent years will substantially reduce the need for a future override.
5) All Town and School employees should be incentivized to join the insurance plan of their spouses, and the incentive could be 25% of the per-employee cost incurred by the taxpayer. So if each employee costs us $20k (for example), the employee could get a year-end bonus of $5k to leave the plan, and the taxpayer could save $15k per employee. This cannot be budgeted in advance, but there are only upsides to this suggestion and no downsides. It also makes a structural dent in the health insurance area.
6) If any COVID-era one-time funds have been used to start recurring programs, those programs should be terminated, since they do not have much of a history, and starting them was extreme malpractice in the first place.
7) The Town should get rid of the DEI Director position which was started last year, which alone saves us in excess of $100k. Similarly, the School Committee should de-emphasize ideology in our curriculum and reduce the money and staffing in these programs.
8) As you have spoken elsewhere on many occasions, Chromebooks for every student serve no significant educational purpose (may even be counter-productive) and should be phased out, saving a considerable sum. As an aside, smartphones should not be allowed to be used during school hours. This is not a budgetary item, but will go a long way toward helping students battle mental illness, depression, suicides, and simply being able to talk and play with each other on the playground. The incoming New Zealand government just announced plans to disallow cell phones in schools. We should move in that direction.
9) Again, as you have said multiple times, all-day-kindergarten should not be subsidized for families with incomes above a certain threshold.
10) The Town should reduce the amount of sidewalk construction planned for each year.
11) I don’t know the history of Town employment over the years, but it would be interesting to plot the number of FTEs versus population for the last 10 years, and see if we have been hiring at a higher rate than needed.
The Town and School Boards face not just a budget deficit, but a trust deficit. Unless an honest and transparent effort is made to be as efficient as possible, it will be hard for me to support an override. But if they rise to the occasion, I am open to supporting a smaller override.
Again, excellent summary, Corinne, Looking forward to Part 2.
The town also should get rid of the 22 cars they are supplying some employees. Like in the business world there is certain requirement to have a company car. Example: Drive over 15k miles, carry equipment, (not talking about a screwdriver) or a specific type of vehicle to do your job. It cost the town a ton of money to purchase, insure, maintain, gas and depreciation.
We also need someone to hold accountable on the Town Manager spending and stop paying independent firms to tell our management team what needs to done to their department. It is costing the Town hundreds of thousand for these firms.
Thank you for this factual post. I appreciate the background, and time spent pulling together this summary. As taxpayers, we truly need to become more involved (included myself). At the end of the day, we vote and have a voice in how our money is being allocated. I look forward to reading part 2 of this article.
Great summary! It is informative and thought provoking. I appreciate the facts that you have provided. Is there a main finance person that oversees and double checks all of the facts of proposed budgets? for the town? Ultimately is is John’s responsibility, but does he have someone who is like a Town CFO?
At the district, Sheri Matthews is the Director of Finance and Operations. Her job description reads “Overseeing the Finance and Operations departments, Sheri Matthews and her team are responsible for the management of the financial processes of the school system, including budget, payroll, purchasing, accounts payable, grants, gifts, and the collection of fees.”
There is a Finance department for the town, but overseeing the budget is not listed among the services they provide.
We DO have a Finance Committee. They have been paying close attention recently, but, in my opinion, they failed to help put the brakes on this runaway train when given the opportunity at the May 2022 Town Meeting. They were opposed to an amendment which would have cut Acton’s share of the school budget by about $1.25M. While that would not have completely avoided this mess, the hole would certainly be smaller. More importantly, it would have raised some more awareness regarding the school & town budgets, improper use of one-time sources of funding and over-reliance on reserves.
Tara, There is a town Finance Department, and this team provides support to the Town Manager during the budgeting process. Marianne Fleckner, Director of Administration and Finance, oversees the finance team. You can review the services provided by the Finance Department, which includes budget administration, on their page of the Town’s website here – https://www.acton-ma.gov/132/Finance