No Override Needed to Give Teachers a Raise
By: Submitted Content | 4 hours ago
Editor’s note: This letter, which arrived by the deadline date of April 26, was inadvertently overlooked by the editor. Out of fairness to the author, it was published today, May 1.
Do we need an override — a permanent increase in our taxes — to increase teachers’ salaries? Let’s do the math. The funds are already there, which would allow the School Committee to bargain, in good faith, meeting their goals, while negotiating fairly in a fiscally responsible manner.
Every year the tax levy increases by 2 1/2 percent as a starting point for budgeting purposes. The base assumption is that all property taxes will increase to the maximum allowed by law. In reality, this doesn’t happen due to additional tax collected from new growth, and the 6-month offset in applying the new tax rate to properties. The effective tax rate has been less than 2,5 percent for several years.
Even though the effective tax rate is below 2.5 percent, we still have had a lot of free cash. Free cash is an amount of collected tax revenue that is unspent or unencumbered. Every department, including schools, has returned budgeted, but unneeded, operating funds. From a taxpayer’s perspective, this is unwarranted, as more is collected than used in one year. From a financial perspective, this is prudent to avoid creating a structural deficit. The key is to find the balancing point between these opposing views. The budget assumption that strikes the balance is 5 percent in free cash and stabilization reserves.
The fiscal 2018 budget estimates 6.63 percent in reserves or $1,683,365 over the 5 percent minimum recommended reserve. This amount is after using $1.8 million in free cash for capital spending and bonding another $1.8 million for capital purchases. Confidence to bond means there is reliable, future cash flow, free cash. Is it a coincidence that the additional amount to our reserve is nearly the exact amount requested by the School Committee? Knowing the levy will never decrease, will increase by 2.5 percent every year, and departments are over-budgeted (or at least capable of realizing savings), a substantial amount of free cash has been available at the end of the fiscal year. It looks like teachers could have raises with or without a successful override vote.
When you do the math, you see that Westford CAN afford to pay teacher raises WITHOUT an override. It’s a win-win. Teachers get paid more and taxpayers don’t get another hike in their taxes. So when you read the back-of-the-ballot Question Number 1, “Shall the Town of Westford be allowed to assess an additional one million six hundred thousand dollars in real estate and personal property taxes for the purpose of supplementing the amount appropriated for the operation of the Westford Public Schools?,” VOTE NO; it’s already there! — Carolyn Ricciardi, Russell’s Way