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Date: 12/2/2021
WESTERN MASS. – Amherst, Pelham, Leverett and Shutesbury met virtually on Nov. 20 for a four town meeting to get a jump start on discussions revolving around budget basics and information as preparations for the next fiscal year begins.
The four towns met with the intention of going over budget basics and becoming acquainted for the upcoming budgetary decisions. Attendees of the meeting were made up of members from Town Councils, Select Boards, School Committees, and Finance Committees present for the meeting on behalf of the towns. This meeting was conducted earlier than normal after requests for an earlier start on this process after last year.
The meeting began with a presentation from District Finance Director Doug Slaughter that went through the basics of the budgeting process and the assessment methods used in calculating the yearly parameters for spending. School budgets are generally defined by two overarching sections: revenues and expenses. Revenues identify the sources of money available for use, and expenses identify how those resources will be expended to meet the needs and goals of the district.
This meeting was mainly focused on revenue and particularly assessment methods. State and local aid make up the general fund revenues, while special revenues such as grants and Excess and Deficiency Funds (E & D) make up special revenues.
Another piece of information about this process coming from Slaughter’s presentation was on the assessment methods used in creating the budget. In the slide it explains that in January 2007 the Department of Elementary and Secondary Education (DESE) refined its regulations on Regional School Districts Assessment methods. This resulted in two broad categories of assessment: Statutory Assessment Method and an Alternative Assessment Method.
Statutory Assessment Method is the default and uses minimum local contribution, determined utilizing property Values and Income. Resources needed for debt, capital purchases, transportation, and amounts above the minimum local contributions are “allocated pursuant to the assessment provisions of the regional agreement.” A five-year rolling average is used in the provisions.
Alternative Assessment Method is any method that is not the statutory, including methods described in regional agreements, and requires approval by the DESE commissioner as well as all four towns each year.
According to the presentation, a collective agreement to use an Alternative Assessment Method each year has been reached. Over the last several years, a Modified Statutory Method has been used. These have had two main components to allocate the assessment.
By utilizing a fraction of the five-year moving average of the Minimum Local Contributions to set the amounts to be applied first, fiscal year 2022 (FY22) calls for 65 percent, the highest point of the steady growth from FY18 at 10 percent. The other component is that the utilization of the five year moving average. By using prior years, the average can be calculated completely without using estimates. If the current year date were used the actual assessments to each town would not be finalized until July.
Superintendent Michael Morris reiterated to those in virtual attendance that this meeting’s main goal was to gather a common line of understanding of the technical details. Following the brief presentation, a representative from each town spoke to give a ballpark idea of what they were looking for and had planned in relation to this four towns budget making process.
“Some residents are struggling with the property tax,” said Jim Walton, a Shutesbury Finance Committee member. Walton also mentioned that the town is considering implementing a tax exemption for elderly residents. He also mentioned due to the town’s high tax rate that it has been challenging for the town in maintaining and reducing costs.
John Tricky of the Pelham School Committee spoke on the reality of his small town and some of the issues being faced coming into budget discussions.
“We are a shrinking town,” Tricky said. “We rely totally on property tax for income. Tax rate is going down, but assessments of town are going up. It costs more to run the town.”
Tricky said he did not anticipate any new growth of significance and but that there were “unknown waters ahead” that would need to be negotiated and handled.
Amherst Town Council President Lynn Griesemer expressed urgent need for the regional agreement to be updated due to the agreement not reflecting the change in Amherst’s government operations.
“We have several financial challenges,” Griesemer said. “We see an annual growth from 2.5 percent to 3 percent, but I’m afraid most of it will be outpaced by inflation.”
Greisemer also said that the creation of a Diversity and Equity inclusion office and the implementation of the Community Responders for Equity, Safety, and Service (CRESS) program were high priority projects for the town. Besides that, Amherst is also looking at the construction and renovation of four different buildings, one of which being the future new elementary school.
Andy Steinberg, Amherst Finance Committee member and at-large town councilor, added on behalf of Amherst some clarification for the other towns on Amherst situation.
“Four percent of our property in town is commercial. I think there’s always this misunderstanding that Amherst has all this commercial property that creates all this exemption,” Steinberg said. “Because 50 percent is either tax exempt institutions or untaxable, our taxes fall heavily on residents.”
Steinberg also expressed that he feels the direction heading with assessments is not helping and is only shifting costs from town to town in the big picture. He also said the preferred method of Amherst would be going back to the regional agreement because the thinking is that towns should pay the costs of students, they are sending to the district school.
“I have been a little bit concerned about trying to decouple the discussion of the assessment method and the budget discussion. In the end, the two work together to provide the kind of regional schools that all four towns want. What we can do to increase efficiency in schools is important,” Steinberg added.
Steinberg even suggested that a K-12 regional school program would increase revenue and help with some budget problems being faced and wanted to give other attendees in the meeting an idea that could possibly be incorporated in the future. Morris did note that a project of that caliber would require the other towns to come to the decision to move their kids into a school format such as that, something that would undoubtably be very far down the line from present discussions. Nonetheless, it was a suggestive idea for future solutions.
Following each town’s time given to address their current situations, all parties had one more opportunity to speak and give suggestive guidance for what models and information would be wanted for the meeting next month on this discussion.
Phil Carter from Leverett’s Finance Committee expressed that the town would like to keep the assessment method at 65 percent in the thinking that it does reduce pressure to make cuts to the school budget.
Steinberg expressed that getting a much more firm understanding of the budget process from the capital side would be greatly beneficial in showing how the budget is allocated and the steps in doing so.
“If there is one thing that has been difficult over the years in budget presentations it is partly because of how the community looks at it. The way that the budget is presented each year is to try and calculate at best you can a level funded budget and then to measure against what you present, as opposed to starting what the budget is and what the needs are,” Steinberg explained. “It creates this impression of cuts. All four towns has the tendency to always try to defend why we are ending up with a budget that is cutting education.”
Steinberg’s comments were mostly to note that the connotation of a program facing cuts is unfair to the actual process of allocating funds in the budget.
“Percents give us an idea of which way to go,” said Tricky. “The other thing important to me is a 10-year capital forecast. Behind the scenes other additional large expenses come forward. Give us an idea of what we can expect.”
Other town representatives shared these sentiments and encouraged more information on how ARPA (American Rescue Plan Act) funding could be used this year in the budget process.
Walton asked everyone consider scenarios looking at 75 to 100 percent statutory calculations for the next meeting. Others from the towns seconded that comment and also wished for a larger outlook plan over the next decade like others had previously requested.
Morris closed the meeting but also reiterated this meeting was for the purpose of having open conversations. He also added that this meeting was due to interest last spring to have assessment conversations before the budget process really gets rolling.
“We are not creating any budget. We are really trying to understand and see if we can come to a resolution,” said Morris. “More conversation and more dialogue hopefully yields us in the right place.”
The four towns will meet again next month where there will be more of this information requested which should lead to furthering budget discussions between the towns.