Heading into Monday’s joint Select Board-School Committee meeting regarding Natick’s possible $8M override, the town has spelled out how the decision could translate into higher tax bills.
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A presentation to be shared at the Dec. 16 meeting (6:30pm) shows that an $8M override could translate into a 66 cent tax rate increase per $1,000 in assessed property value. That in turn would translate into a tax hike of $245 for owners of condos with a median value of $372,000 and a tax increase of $515 for owners of single-family homes with a median value of $780,400 (expect a calculator to surface on the town website to figure out your situation).
This would be on top of tax increases already expected based on the latest property value assessments, as discussed during the town’s recent tax classification hearing.
Town of Natick presentation
While not diminishing the impact this will have on taxpayers, the town’s narrative on the need for an override will show that Natick’s financial structure and ability to offer current services aren’t sustainable without an annual infusion of money that an override would provide. General inflation—and more specifically health care, energy, and pension costs—are among the usual suspects to blame for rising expenses. Natick officials have regularly been inserting the term “structural deficit” or “structural budget deficit” into their financial presentations and discussions.
Town of Natick presentation
The Proposition 2.5 law enacted in 1980 limits the amount of property tax revenue a municipality can raise to 2.5% of the value of taxable property, plus new growth revenue derived from activities such as construction. An override in Natick would allow the town to surpass that limit and set a new tax base for calculating the levy limit in the future (so overrides are not short-term fixes).
Natick has been getting by in recent years using one-time funds, including typically $6M-$7M in free cash (leftover money either from unanticipated revenue or underspending on budgeted items), stabilization funds, and monies from the federal government disbursed during and after the COVID-19 pandemic (aka, ARPA or American Rescue Plan Act, and ESSER or Elementary and Secondary School Emergency Relief funds). This monetary influx has allowed the town to keep pace with rising costs even as its own revenue could not. While the town was well aware the COVID-era funds would not last, it also doesn’t want to count on free cash, the amount of which can fluctuate from year to year. The state’s Department of Revenue doesn’t recommend using free cash for operating expenses.
Override rumblings have been heard in town for the past decade, Town Administrator Jamie Errickson has reminded others often. Though rumblings have turned to serious talk over the past couple of years, and even more so in recent months and weeks.
Natick issued its bluntest warning about a possible override during Fall Annual Town Meeting in October, and Town Administrator Jamie Errickson has made the topic a regular discussion point at Select Board meetings since.
He paid the School Committee a visit to talk override at its Nov. 4 meeting, and the School Committee and school administration themselves have been discussing the potential override as part of preliminary budget planning. The school budget is by far the largest in town, and the administration has been making cuts and preparing to make more with the goal of at least providing level services and limiting the impact on student-facing services. School leadership says its spending has been in line with state and federal standards designed to support student progress. If an override doesn’t come to pass, school budget cuts could lead to larger class sizes, an increase in fees, and more, according to the presentation to be discussed at the joint Select Board-School Committee meeting.
The town too points to areas where it has tightened its belt, from job cuts and organizational restructuring to efforts such as uniting with Framingham on a dispatch system. Natick officials tout grants it has secured to slash the cost of upgrades, including those on the sustainability front.
Upcoming deadlines will force the town to get ever more specific about a possible override. The town needs to deliver a preliminary budget by Feb. 1 in advance of Spring Annual Town Meeting, and Errickson says one version of the budget will assume no override and another will assume dollars from an override. Either version is expected to exceed $200M, with close to half from schools.
The Select Board will need to make its call over the next couple of months on whether to put an override question on the March election ballot. Technically, it has until early February to do so.
Natick last approved an override in 2008 for fiscal year 2009, and it was for $3.9M. An $8M override would total more than all previous Natick overrides. Only seven overrides across the state have been approved for $8M or more, according to state’s Division of Local Services.
The amount of Natick’s override might still head downward as budget planning continues over the next couple of months.
The public can send questions about the possible override to the town.
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It seems to me that real estate tax revenues must already be surpassing the inflation rate. As an uninformed observer and tax payer I find it surprising that the town budget would be growing at even a faster rate than that. But what do I know. If we have been dipping into one time funds to cover the shortfall, that could explain the difference. My own kids graduated long ago, but I vowed when they were young to always support the needs of our schools, no matter my age, to make them the best we possibly can.
This will be a further burden on elderly homeowners who wish to stay in their homes. Using a home as a piggy bank is not for everyone. The school system, which is quite good, should not get half of all monies. Police, fire, library, senior center should also benefit from raised money. A 6-7% increase would be more palatable. Some towns have not voted to override. Any homes built in town are for the wealthy–there is nothing for young, middle class families.
What is unreasonable about tapping into the equity of a property whose value has vastly exceeded the rate of inflation, thanks in large part to the quality of the schools here? Reverse mortgages are a very practical and fair option. In terms of the net worth of the average resident, older people who have owned homes in Natick for the past 30 or more years have been blessed with an extraordinary advantage. I understand the emotional desire to stay in one’s home, regardless of the practicality, but a home is an asset, and anyone who owns a home in Natick that they bought decades ago is doing much better than most.