Thank You, Amesbury!!!

The $1,000,000 underride measure was defeated 2155 'NO' to 1025 'YES' votes tonight! Thank you, Amesbury, for voting so decisively for responsible budget policy!

And thank you to the many, many folks who donated time, money, your good name, or your lawn to this effort. The Committee formed to defeat this measure was truly overwhelmed by the positive responses that we received in the 4 short weeks since we first met. The support made all the difference in getting out our messages quickly, thoroughly and successfully!

Don't Be Confused by the Ballot Language!

Here is what you will see on election day.
VOTE NO on Question #4


Question #4 -- Binding

Shall the Town of Amesbury be required to reduce the amount of real estate and personal property taxes to be assessed for the fiscal year beginning July first, two thousand and eight by an amount equal to one million dollars ($1,000,000)?

Yes_____ NO______

Why Put Our Own Back Against The Wall?

Amesbury is one of the few communities in the Commonwealth that does NOT levy property tax up to its allowed limit under Proposition 2 1/2. In 2007, 75% of the communities in the Commonwealth taxed at 99-100% of their allowable amount (according to the MA Municipal Association). It is especially notable that we're not taxing at our limit, given the dramatic reductions in State Aid (we lost 25% or $3,000,000 in Aid since 2000) (DOR website). We could speculate on the reasons why we have not had to tax to our limit despite this lose of revenue (e.g. good financial management, tax base growth) but that's another discussion.

Recent Boston Globe articles (in their 'Override Central' section) have chronicled the woes of communities jammed up against their levy limit. It's a depressing litany--closed school libraries, laid off teachers and public safety personnel, increased school fees, closed sports programs, closed senior centers, not replacing safety equipment. Compounding the problem of being up against the levy limit is that the vast majority of override votes fail (2/3 of them failed in 2006). Councilor McClure and Mayoral Candidate Alison Lindstrom have both said that we can always reverse the underride if we want but the facts contradict this assumption--it would be very difficult to undo this step, once taken.

Having excess levy has two enormous benefits for Amesbury. First and foremost, it buys us flexibility, the ability to respond to unforeseen or uncontrollable cost increases (think 'flood' or 'special education') without having to call for an override to do it. Second, it actually saves us money. If we wipe out our excess levy (which a $1M underride will do), we can count on having our bond rating go down. This is like having your credit rating go down. As Council Candidate Allen Neale has pointed out, a lower bond rating will increase the amount that we spend on bond interest, potentially costing us $100,000's a year in wasted interest payments.

In talking about the underride around town, I've used this basic analogy to personal finances. If you looked at your personal budget and thought "Gee, I need to cut my costs and save some money," would the first thing that you did be to go to your boss and ask if you could get a pay cut, please? No, you would first ask yourself "what can I cut from my expenses? and then "how much salary do I need to cover my costs (mortgage, heat, auto, etc)?" The current Council has asked "what can we cut" and only found 2 line items worth $52,000 to cut. Lowering our income (tax revenue) is meaningless without first asking what it actually costs us to deliver the services that we need to ourselves. It's terrible financial management.

So let's do ourselves a favor and approach our financial situation with common sense and prudence, keeping the hard-earned flexibility and good bond rating that we currently enjoy. We should be excited to have 'excess levy' room---it prevents us from being jammed against the wall.

Pt. 2 of Cable Discussion on Underride Airs Tonight on Channel 12

The local access show "All About Amesbury" will be airing the 2nd part of a discussion with Municipal Council Candidates Allen Neale and Jonathan Sherwood regarding the underride question tonight at 6:30 p.m. on Comcast Channel 12. The segment will be available for viewing on the internet at www.allaboutamesbury.net on Wednesday, 10/24.

Underride Will Undermine Capital Planning

Submitted by: William Parker

Amesbury’s Master Plan (2004) lays out a vision of what Amesbury should “look like in the next twenty years”. Action items are defined for the Plan Elements, including “Land Use” and “Infrastructure”. Short-, intermediate- and long-term goals define this vision.

Each element is categorized by time frame (Immediate, Near Term, Medium, Long Term and On-going) and is assigned a potential cost (Low, Medium or High) with Low less than $50,000 and High over $250,000. As with all good planning, there is recognition that investments in Amesbury’s future carries price tags.

Without question, the Infrastructure costs in the Master Plan are the big ones. Some significant Master Plan action items coming up:

• the library expansion or relocation
• relocation of the DPW yard
• expansion or relocation of the Fire Department

And we know that we’re facing costly improvements to our water infrastructure.

Good capital planning saves money over the long run, just like making sure you are prepared to pay for a new roof on your house when you need it. It takes well-planned investments to improve and expand Amesbury’s resources. An underride as big as the one on our ballot would dramatically hamper our ability to make these investments and follow our Master Plan. The current council has made much about being fiscal watchdogs but good financial management means knowing how to plan well.

What Happened in Dennis and Gill—Two Underride Case Studies

Dennis

In September of 2003 the town of Dennis, by Special Town Election voted in favor of an underride. This was in direct response to a Proposition 2 1/2 Override of $176,000 that was passed for the Cape Cod School Budget at the Special Town Meeting in June. It turned out that the amount was not needed for the school’s budget.

In a showing of good faith to taxpayers by the Board of Selectmen, acknowledging that the town many times in the past had diverted money to the schools; they agreed to put forth the underride. It was understood that by voting for an underride would only return the town to its original levy amount and that schools or other town services would not be damaged in the process.


Gill

In 2003 the town of Gill passed an override. It was minimal, the excess would equate to approximately .12 cents for every thousand dollars of value on the tax rate.

In 2003 Gill placed a condition on the salaries of town employees tying their COLA increase to the COLA granted in the Gill-Montague teachers’ contract. The teachers’ contract was ratified, and while it included an increase in salaries, it was not specifically designated as a COLA increase and therefore town employees received no increase. Select Board members felt that was not the intent of the voters and placed a question on the special town meeting to allow the 3% increase that was raised by taxation to go to town employees.

At that same meeting the town also decided that an underride reducing the levy limit by that same dollar amount, would be put to the voters at the annual election in May 2004 to correct the error when the teachers’ contracts were ratified. The amount of the reduction was PLANNED to equal the number by which the Gill-Montague FY04 budget was reduced after the override passed in 2003, $10,833.

In both cases, unlike the Amesbury underride question-where the Council Majority willy-nilly picked a number ($1 million) to go to the ballot—the towns of Gill and Dennis actually used an UNDERRIDE in response to an earlier OVERRIDE attached to results identified for the voters.

Sound familiar? See these previous blog entries:

http://nounderride.blogspot.com/2007/10/look-at-other-underrides-1-upton-in.html
http://nounderride.blogspot.com/2007/10/amesburys-underride-would-be-one-of.html

A Look At Other Underrides - #1- Upton in 2001

An underride has been used only 13 times since Proposition 2 1/2 was enacted. It's a fair question--what led those other communities to reduce their levy limit? The answers are instructive to Amesbury.

In 2001, the Town of Upton approved an underride for $143,477. Why? Previously, the Town had approved an override worth more then that for the construction of new school facilities. (In fact, Upton had resorted to overrides more than once before this to pay for capital and school costs that outran the allowed levy limit.) The school project came in costing less than expected. The underride was enacted to withdraw that unexpected savings from the overall tax base and return the base to a lower level.

This underride, then, was a reasonable action for the responsible management of Town finances. It was tied to specific circumstances that allowed the community to judge that it had clear excess capacity tied to a previous override and that removing that capacity would not affect services. This is in contrast to Amesbury's proposed underride, which has not been connected to clear consequences by its supporters.

Still 'No Confidence' in the Council Majority

From yesterday's Daily News, concerning Councilor Pinierio:

District 2 Municipal Councilor Mario Pinierio called The Daily News last week to further respond to criticism that the Municipal Council didn't make significant cuts to the budget submitted by the mayor last spring.

During a recent council meeting, Pinierio noted that "the mayor cut the budget $2.2 million; there was no other place to cut." Most of the increases were special education costs in the school budget and increased heating costs for the schools, he said.

"If we had cut any more, we'd be laying off people. We did the best that we could with what we had in front of us," Pinierio said. "The mayor cut ($2 million) for him to take the credit; that way the council could not cut anything because it was as lean as it could be."

If the budget is "lean as could be", why did the majority of the Council support a ballot question that would gut up to $1 million from Amesbury's budget next year? Even Councilor McClure, who proposed the underride, has stated that an underride would "cripple our schools and hurt our community." This suggests that the supporters of the underride are willing to sacrifice our community's assets, regardless of the consequences.

Comparison of Underrides

Further examination of towns that opted for an underride makes for interesting comparisons to the one our town is now considering. Those towns that did pass underrides in excess of 1,000,000, Lancaster and Plymouth, were in very different situations than Amesbury is currently. In 2003, the year Lancaster passed its $1,000,000 underride for FY 2005 by 1 vote, the town had $293 in excess capacity. Between 2003 and 2004, their levy limit increased by almost 47%, from $6.66 million to $9.53 million, with an excess capacity of $1.2 million. Plymouth had almost $2.3 million in excess capacity when they passed their $2 million underride in 1995, for FY 1996. In 1997, the year following the underride took affect, Plymouth’s excess capacity was almost $4.2 million!

Unlike the underride proposed for Amesbury, it appears that the underrides in Lancaster and Plymouth were in response to foreseen increases in excess capacity. In neither Plymouth nor Lancaster did the town vote an underride which would completely eliminate their excess capacity, as could be the case in Amesbury when the underride takes effect in FY 2009. Barring significant new growth, Amesbury would only be able to increase money raised through property taxes by 2.5% if the underride passes. To understand the potential impact, if the underride went into effect for FY 2008, new revenues from property taxes would have been limited to approximately $720,000. When compared to the school’s special education costs increase of $1.1 million in FY 2008, it is clear that the complete elimination of excess capacity can easily lead to dramatic cuts in municipal services.

All sources are from the DOR online databank,

Boston Globe Reports on the Underride

Globe picks up the underride story. Donna McClure rejected the idea that the loss of $1 million in revenues would have major impacts in an approximately $52 million city budget, dismissing such assertions as "scare tactics." To read more click here.

Cable Show on Underride: Monday October 8th, 6:30 p.m. on Channel 12

At-large Candidate Allen Neale and District 6 Candidate Jonathan Sherwood will be appearing on the "All About Amesbury" cable access show on Monday October 8th, 6:30 p.m. to discuss the Underride ballot measure. The show is on Amesbury Comcast cable channel 12.

Residents who do not have cable will be able to access the video on the internet. The video will be posted by Wednesday, October 10th at this website: http://www.allaboutamesbury.net.

Underride Short-Circuits Positive Gains

The underride cannot be discussed seriously without including the very real financial constraints facing some members of our community. Anything with the hint of offering tax relief is going to sound attractive to someone who has difficulty paying the bills. It is my assertion, and I believe the numbers will support this, that not only does the underride provide no tax relief (Donna McClure conceded this point at a recent Municipal Council meeting), it could negate the real tax relief that would be gained through smart growth and professional management of town services.

Department of Revenue data points to a strong correlation between per capita income and town levies. Of fourteen towns in Massachusetts which are similar in size to Amesbury, the correlation between how much people earn, and the town levy, is almost linear. The more people earn, the higher the levy. In this comparison with similar towns, Amesbury's levy is at the high end of the pack, although still consistent with its per capita income. Where Amesbury tax payers are hit harder is when the number of parcels in the town that share the tax levy burden is factored in. The more parcels in a town, the less each parcel’s share of the tax levy. Of the fourteen towns similar in size to ours, our tax levy is higher than all but three towns. We also have fewer parcels than all but four out of the fourteen similarly sized towns.

All that being said, what can we do to offer relief? Again, as even the authors of the petition concede, the underride, if passed, will not lower taxes. The better strategy from the perspective of demographic data is to promote smart growth in the town to better distribute the tax burden, and maintain the flexibility afforded by whatever excess levy capacity we may now have. If we do have excess capacity, let’s use it intelligently as an investment that will pay off in a better, more attractive community, with more people to share the tax burden, resulting in lower taxes for all of us. This is not a question of choosing between providing needed services or lowering taxes. Rather, it is about not losing the flexibility the excess capacity gives us to help make our town a better, more affordable place. VOTE NO TO THE UNDERRIDE!

Underride Removes Ability to Handle Unexpected Costs

One of the big benefits of having some wiggle room left between our budget and our levy limit under Proposition 2 1/2 is being able to handle unexpected but unavoidable new costs from year to year.

Special education costs are a good example of what we would lose with the under-ride. In the last 2 years, school budget increases have been driven by the demands of special needs education. Between the 2007 and 2008 budget, there was a 73% increase in this single cost, equaling $1.1 million. This represents two-thirds of the total increase in the overall school budget from last year to this year (and over 2% of Amesbury's entire budget!).

We have no control over special educations costs, between government mandates and who is attending our schools year to year. If we experienced an increase like this next year, we would already be behind the 8 ball, before we even look at anything else in the budget!

Amesbury's Underride would be one of the largest in the State of Massachusetts History

Only two other towns have had underrides which exceeded $1,000,000. This measure is not only rare, but it is drastic.

SHELBURNE	1993	(65,225)
AYER	1995	(250,000)
PLYMOUTH	1996	(2,000,000)
ORLEANS	1998	(324,000)
WILLIAMSBURG	1998	(51,580)
HOLLAND	1999	(200,000)
UPTON	2001	(143,477)
WILLIAMSBURG	2002	(35,407)
DENNIS	2004	(176,401)
GILL	2005	(10,833)
LANCASTER	2005	(1,032,724)
GROVELAND	2006	(376,968)
SANDWICH	2006	(479,336)

These figure are from the DOR website

Council Overturns the Mayor's Veto; Question on Nov. 6 Ballot

At a specially called Municipal Council meeting this evening, the Council voted to overturn the Mayor's veto yesterday of the Under-ride ballot measure by a 6-2 vote. Inevitably, there was some controversy and parliamentary maneuvering about it.

Councilor At-Large Donna McClure opened the meeting by proposing a motion to instruct the Clerk to place the $1 million Under-ride measure on the ballot. Her motion was not to over-ride the Mayor's veto but rather to not acknowledge it as valid in the first place. Significantly, her motion also included instructions to the Council President to take necessary steps to insure that the Under-ride be placed on the ballot and that the President be given the resources necessary to do this (lawyers?).

A discussion followed as to whether or not the Mayor had the authority to veto the over-ride or not, according to the Charter. Councilor McClure's motion clearly took the position that it was not valid. If the Council had voted to approve McClure's motion, then a crisis would have been set up. The Mayor had already received an opinion from the Town legal counsel that the veto was valid; Mayor Kezer would have instructed the Clerk to ignore this new measure and the question would have been left off the ballot (the Council not having overturned the veto).

This motion would have set up a clear confrontation--that probably could only be resolved in Court--between the Mayor and the Council. Looking to avoid this, District 4 Councilor Bob Lavoie proposed a 2nd option. He suggested that the Council re-approve the original motion to place the Under-ride on the ballot, knowing that the question would get on ballot the 'easy way' (as he put it) or the hard way (likely in court). After discussion, this motion (and not Councilor McClure's) carried the evening 6-2, with Councilor's Connolly-King and Benson voting No.

The whole question of whether or not the Mayor had the right to veto the ballot measure was not resolved, at least, it was not resolved on the part of the Council. In the end, the main point is that the 2/3 needed to overturn a veto was there, the veto was overturned and the Under-ride is on the ballot on November 6th!

Mayor Vetoes Underride

In accordance with Section 2-8 of the Charter of the Town of Amesbury, I am this day,
the 1st of October 2007, vetoing and returning to you the Council's measure 2007-076,
which would place a $1,000,000 underride on the ballot of the November 6, 2007
election.

I am vetoing this measure of the Municipal Council because should it pass, it would
undermine the fiscal stability of the town and be detrimental to our ability to deliver
essential municipal services. I am also vetoing this measure to make clear and
unambiguous my position on this matter. Let there be no doubt in the minds of the voters
of Amesbury that I am opposed to this underride.

I have heard the argument that vetoing this would be "thwarting the voice of the people".
That is a false argument. This is not an act driven by general citizens of Amesbury. This
is an act chosen by the council majority with Councilor Tom Iaccobucci as the author,
Councilors Michelle Thone and Donna McClure as the sponsors. It disturbs me that the
Council members advocating to let the voters decide this monumental decision already
have the power to implement the stated goal of their underride through the budget
process but have chosen not to because they know the dire consequences of such actions
and want to transfer that responsibility off of themselves. They also know that they would
have to specifically identify what services to eliminate in order to reduce the budget and
would have to answer directly to the citizens impacted by those decisions.

By issuing this veto today, I have given the Council the opportunity to override my veto
and put this matter to a vote on the November 6 ballot. I am fully aware that the council
majority has consistently voted as a bloc and has the votes to put this matter on a ballot,
either November 6 or as a special election. Given that situation, I see no need to spend
more taxpayer money for a special election.

Knowing this measure will be on the ballot, I have the full confidence and trust in the
voters of Amesbury that they will make the right decision for our future and defeat this
ballot question being pursued by the council majority. The voters of Amesbury have put
their trust in me to lead this community and to make prudent and mature financial
decisions for the long term fiscal stability of the town. I believe that voters will agree
with me that the best course for controlling taxes and delivering excellent municipal
services is through professional management and solid decision-making on a day-to-day
basis, not through a draconian style cut that dismantles our ability to deliver essential
municipal services.

Again, I expect the council majority will override my veto and put this measure on the
ballot. However, I also believe that the voters are ready to put an end to the agenda and
tactics of this council majority, and move Amesbury forward to a positive and strong
future by rejecting this measure at the polls.

Therefore, I hereby VETO 2007-076, a measure to place a $1,000,000 underride on the
November 6, 2007 ballot.

Thatcher W. Kezer III
Mayor

Top 10 Reasons why an Underride is not good for Amesbury

10. Amesbury does not have $1 million in ‘excess levy’ for 2008, so this will mean budget cuts next year and every year beyond.

9. An under-ride will not reduce anyone’s property tax bill.

8. This punishes Amesbury’s good financial management by removing its financial flexibility.

7. Amesbury will carry this cut into the future, compounded every year.

6. An under-ride would wipe out our ability to cover unpredictable but unavoidable costs. (Between 2007 and 2008 budgets, the mandated special needs costs for schools increased by over $1.1 million or by 66%!)

5. Amesbury’s bond rating would likely go down if we passed an under-ride. An under-ride would cost Amesbury money in higher interest.

4. The under-ride proposal is not a citizen initiative but is the product of 3 Councilors: Tom Iacobucci (d5), the author, and Donna McClure (at-large) and Michelle Thone (d1).

3. The responsibility for managing and cutting the budget rests with the Council. (In June, the Council only cut 1/10^th of 1% from the current budget. Why are they proposing a 2% reduction for next year, without even knowing the consequences?)

2. The Council does not need an under-ride to control costs. That’s what deliberating and voting on the budget every year is for!

1. “The only other way to immediately and dramatically cut your taxes would be an under ride and I would not support an effort in that direction. I fear it would cripple our schools and hurt our community.” – Councilor Donna McClure, July 2006

What is an underride?

According to the Massachusetts Municipal Association website Proposition 2 1/2 allows a community to reduce its levy limit by passing an underride, according to the Division of Local Services. When an underride is passed, the levy limit for the year is calculated by subtracting the amount of the underride. The underride results in a permanent decrease in the levy limit of a community because it reduces the base upon which levy limits are calculated for future years. Simply put, an underride is the exact opposite of a Proposition 2 1/2 override.

A majority vote of a community’s board of selectmen or town or city council (with the mayor’s approval if required by law) allows an underride question to be placed on the ballot. An underride question may also be placed on the ballot by a local citizen initiative procedure, if one is provided by law. An underride question must state a dollar amount and requires a majority vote by the electorate.

Since 1994, a total of nine underride questions have been placed on ballots in eight communities, according to the DLS. Eight of these questions have been approved by voters, the largest being a $2 million reduction in Plymouth for fiscal 1996. The other underrides that passed were in Ayer, Holland, Orleans, Shelburne, Upton and Williamsburg (twice), all for amounts below $325,000. A proposed reduction of $388,353 was rejected by voters in Norton in 1994.

For more information see the DLS publication “Levy Limits: A Primer on Proposition 2 1/2,” which can be found on the DLS Web site (www.dls.state.ma.us/publics.htm).

History of the Underride

The under-ride was first seen in Amesbury in 2001 when Councilor Tom Iacobucci submitted legislation to schedule a rare Proposition 2 _ “UNDERride” vote, to reduce Town’s tax levy by $1.5 million (legislation passed; underride lost at ballot box by only 13 votes).

The initiative was reintroduced in 2007. On July 3, At-Large Municipal Councilor Donna McClure filed a bill to put a $1.5 million underride before Amesbury voters at the November 6 election. The bill was co-sponsored by District 1 councilor, Michelle Thone.

At the September 11th meeting the Council agreed to reduce the underride amount to $1 million, based on a recommendation from the finance committee. Ultimately this vote was delayed as a result of an objection by Council Ann Connolly-King and moved to the September 24 meeting, where the Council finally agreed to send it to the ballot.

According to figures provided by the state Department of Revenue, only 14 communities have voted on a Proposition 21/2 underride - a reduction in property taxes - through 2005. In contrast, almost every one of the 351 cities and towns has sought to raise taxes through overrides and debt exclusions.

Underrides have been voted on about 20 times over the past two decades; in contrast, almost 2,800 tax increases in the form of overrides and debt exclsions have been sought. Among the communities that have voted on an underride were Ayer, Dennis, Gill, Groveland, Holland, Lancester,Norton, Norton, Orleans, Plymouth, Sandwich, Shelburne and Upton.