When I saw (the story) “Town Eyes Tax Hike Limit” from Aug. 8, I proceeded to look at the average annual tax increase on my property tax bill going back to our move to town 16 years ago. I found the average increase to be very close to the 3.65% proposed and approved as a cap for the coming year’s budget. It’s good to see a focus on this topic, and I applaud Selectman Vispoli for proposing it.
Is it not also worth asking what that 3.65% target increase looks like relative to other costs that residents face? Inflation over that same 16-year period has averaged 2%.
Let’s say a homeowner has annual expenses of $100,000 including an $8,000 annual property tax bill (a house valued at approximately $525,000 for 2019). The property tax bill goes up at 3.65% compounded annually for 10 years. And the homeowner’s other $92,000 of expenses goes up at 2% per year. At the end of that 10 years, the homeowner’s annual expenses going towards property tax would go from 8% of their total expenses to 9.3%, an increase of 16%. After 20 years the proportion is 10.7%, an increase from today of almost 34%. It would take some time, but eventually the property tax would consume a homeowner’s entire budget — not a sustainable situation.
How have we gotten to a point that we’re talking about how much town spending increases should consistently outstrip other cost increases we face? There may be valid reasons why this has occurred, but none of them can justify a future that is unsustainable.
Let’s have a conversation about how we keep government spending increases to the inflation rate. I agree with Selectman Koh that we shouldn’t make a short-term decision that could impact sustainability — financial sustainability for town residents! If we don’t have that, then it will be impossible to sustain anything else.