Groton resident’s tax bills will probably increase faster than inflation or most residents’ income for the next five or more years. The view is pretty much the same no matter whether you are looking at Town Manager Mark Haddad’s proposed Fiscal Year 2016 budget, its place in a five-year projection, or an extensive independent comparison of Groton’s past and projected budgets — the “Budget Benchmark” — with neighboring towns and comparable towns.
This Budget Benchmark presentation prepared by Kevin Lindemer, Jack Petropoulos, and Bud Robertson, shows the town budget of Groton Massachusetts for the last several years and projected years to come outstripping most neighboring and comparable towns' and growing twice as fast as the rate of inflation.
The independent comparison of Groton’s budget growth, both past and projected with neighboring towns and towns demographically similar to Groton, was put together by Kevin Lindemer, Jack Petropoulos, and Bud Robertson. All were doing the fact gathering and analysis on their own although each is active in town administration and politics — Lindemer is a Groton Electric Light Commissioner; Petropoulos is a Selectman, and Robertson is on the Personnel Board and the Finance Committee.
“We thought there was a need for better information, for more information, to make better informed decisions,” Lindemer said. “There were three of us involved. Selectman Jack Petropoulos initiated this. He asked me to help because we use similar analysis tools at Groton Electric, and we had Bud Robertson advising us as to what might be most appropriate for the FinCom. Jack said he wanted this, oh, back the time he was elected (2012). and often discussed it with me and Jay Prager and a few others. So we finally brought it to fruition.”
The “Budget Benchmark” presentation was first shown publicly early in March, at a joint meeting of the Board of Selectmen and Finance Committee. The verifies and amplifies Haddad’s budget projections. His proposed FY 2016 budget levies the maximum tax permitted without an override, as did the FY 2015 budget. His five-year forecast shows the budget growing 20 percent by 2021, from a tentative $31M this year to $37.7M in 2021.
Reacting both to Haddad’s projections and the “Budget Benchmark” verification, Board of Selectman Chairman Josh Degen warned that, “This 20 percent increase in only five years would price some people out of town.”
Lindemer said: “General government will grow at an average rate of about 3.7 percent. Now inflation; best guess is less than two percent. And the projected tax bills to pay for that are 3.6 percent every year. So you take inflation out of that and 3.6, 3.7 percent compounded every year from 2012 to 2021, over that decade, I think we’re probably looking at a residential tax bill that will have gone up by a third and government expenditures will have gone up nearly 40 percent over the course of that decade.”
The Budget Benchmark analysis used town budget data and comparable data from neighboring and demographically similar towns from the Massachusetts Department of Revenue. The “demographically similar towns,” Lindemer said, “Have a similar residential-to-total-tax revenue base and a similar median household income. The towns themselves looked, we thought, pretty close to Groton.”
“When you compare Groton to both of the sets of town that we examined, our average single family tax bill has been going up faster than the towns in both sets of data. For example, if you look at us from 2012 to 2015, our taxes in Groton are up about 14 percent. That’s the highest of the comparable towns with just one exception. If you look at us compared to immediately adjacent towns, our taxes are up about 13 percent and that is more than any of the adjacent towns. When you consider that the rate of inflation probably would have added maybe four, maybe five percent to the rest of our expenses, this is a substantial increase above the rate of inflation and above the rate of most people’s income increases,” he explained.
The Budget Benchmark looks at the town operating budget, not the school budget. But it did draw some conclusions about educational spending.
“Education (spending) for most towns has kept pace with the rate of inflation. so hardly any towns over the last decade have invested more on a per capita basis than the rate of inflation. There are a couple of exceptions to that. Groton is notable in one regard. In 2012 and 23013, we actually reduced our per capita education expenses. Very similar to Ayer and Shirley — they followed that pattern. And when you look at comparable towns, there was only one comparable town that had a decline in education expenses in the last couple of years, and that was Hamilton. Everybody else is either flat or increasing slightly faster than the rate of inflation. So Groton appears not to have increased its education expenditures, but its general government expenses are increasing quite a bit faster than the rate of inflation.”
“There is a lot to it, and we know there are a lot of moving parts when it comes to putting the town budget together. But when you start looking at how we are increasing at the rates we are increasing relative to comparable and surrounding towns, this to me says, ‘We may have a problem.’ We may have a problem from the standpoint of ‘Is this sustainable?’ but also from our understanding of ‘Why is this happening?’ when it’s not happening elsewhere. One of the reasons we questioned whether it is sustainable is the number of people in Groton who are on a fixed income is increasing fairly rapidly — you go from about one in ten today to, within about ten years, probably, you’ll be at one in five who will be on fixed incomes,” he explained.
Lindemer, Petropoulos, and Robertson, “Are concerned about this,” Lindemer said. “We need to have a better understanding of what lies under all these trends that we’re seeing, and can we get some explanation as to why it’s occurring. I hope we start getting some attention, some bandwidth so we can understand why this is happening and if this is something that the town and town government wants to continue.”
One of the factors for the increase, according to discussions in Board of Selectmen’s and Finance Committee meetings, is increases in pension and retirement payments, coupled with increasing head count among town employees and increased hours for some. At the Fall 2014 Town Meeting, Haddad asked for and received more hours for several employees.