Andover Townsman, Andover, MA

February 6, 2014

Tax bill alarm sounds

Residents fighting back against rising costs

By Bill Kirk
bkirk@andovertownsman.com

---- — A growing number of people in town have begun questioning municipal spending habits and whether community leaders have written checks that taxpayers can no longer afford.

During a recent Finance Committee meeting, 30-year member Joanne Marden said residents have reached the limit of what they are willing to shell out in property taxes.

“People in the community are upset about their taxes,” she said. “I wonder whether we have reached a tipping point.”

She and others say that growing debt, new hiring in the schools, skyrocketing health insurance costs and a huge pension obligation are creating an unsustainable situation for residents and business owners struggling to keep their heads above water.

Add on the tax burden of large municipal projects like the $45 million Bancroft Elementary School, and some people are crying uncle.

In fact, a dozen or so local residents have proposed a warrant article for the Annual Town Meeting in May that would impose a freeze on property taxes for people age 70 and older.

Bob Landry, of 4 Seminole Circle, who runs a website that keeps an eye on town spending, blamed high taxes on the growing number of municipal employees combined with generous health benefits packages and skyrocketing health insurance costs.

“Projects don’t make up the largest portion of the tax bills,” he said. “It’s the operating budget. It’s personnel and health insurance.”

Tax bills

In late December, tax bills went out that reflected the true cost of living in Andover. The average tax bill went up nearly 5 percent over last year, and now tops $8,000. Those bills — as well as applications for abatements — were due Monday.

Most noticeably, taxpayers were hit with the first half of the payment on the Bancroft School project. About 44 percent of the cost of the school is being paid for by the state, but the rest — nearly $30 million — is being borne by taxpayers over the next 20 years through a so-called debt-service override. That raised the average tax bill by about $100 a year. Next year’s bill is going up by the same amount to pay for Bancroft.

Meanwhile, Marden said, the town is taxing residents nearly up to the levy limit, which is the maximum amount that can be taxed under Proposition 21/2. This year, she said, the town is about $300,000 shy of the levy limit, which is about $117.8 million.

Adding further to the increase is that the December tax bill reflects the actual taxes owed by residents and businesses, while tax bills in the fall are estimated.

All of those factors, she said, have created a sense of sticker shock for Andover residents, some of whom are on fixed incomes but many more of whom are simply struggling to pay their bills.

“When that happens,” she said, “people react.”

“It’s something around town,” she said. “You just get a feeling there are more people talking about it. There are discussions about the needs of an aging population. Do we want to make sure our seniors can stay in town?”

Finance Committee member Linn Anderson agreed, noting that tax increases are compounded year over year.

“That cumulative increase will have demographic significance on who can afford to live in our community,” she said.

Schools to blame?

Marden said that while the cost of the Bancroft School did cause taxes to go up, debt payments like that are actually lower than they were 10 years ago.

She and Landry agree that the real culprit is personnel costs, including benefits such as health insurance.

“It’s the operating budget,” she said. “It’s personnel costs. That’s where the big bucks are.”

Marden and others in Town Hall say the School Department is to blame for most of the cost increases from year to year.

A chart in the Finance Committee’s report from last year showed that there are 872 full-time employees in the School Department while there are just 351 employed in town departments. Moreover, over the last 10 years, the number of town employees has remained level, even dropping a little, while the number of school employees has risen by nearly 200 people.

Finance Committee member Greg Serrao said the School Department hired the equivalent of 108 full-time employees in the last two years.

“That’s a lot of bodies, that’s a lot of cost,” he said. “That’s concerning to a lot of us.”

He said the School Department frequently hires people in the summer, after the budget has been closed. Officials simply move money around within the school budget to pay for the extra employees, he said.

That may be all well and good, he said, but one of the problems with that is that health insurance is paid for out of the town budget, further depleting town reserves.

Marden said because the School Department isn’t responsible for setting the tax rate, it doesn’t have to worry about the impact on taxpayers.

“They will always tell you they don’t have enough and need more,” she said.

Making matters more difficult, she said, is that the School Department doesn’t adequately communicate with the rest of the town on what it’s doing with its money.

“I don’t want to say there’s a giant conspiracy to keep information from people,” she said. “One of the frustrations of the Finance Committee is the lack of information we get from the School Department and transparency of exactly what’s happening. I hope that changes.”

She said that in the last few years, there has always been a reason the School Department can’t tell the Finance Committee and other town officials what’s going on.

“It’s either a new superintendent, a new business manager or conversion of information systems,” she said. “I’m not sure there’s an excuse for this year.”