Great Barrington — In the months and weeks leading up to Monday’s (May 4) annual town meeting, there’s been a perception expressed by some residents that the town’s proposed $10.9 million operating budget is a runaway spending train, sending property taxes ever higher.
That is not the case, data suggests. As it turns out, the town’s budget over the last 7 years has only risen at the national inflation rate: about two percent. Even more surprising: in real terms — controlling for inflation — operating expenses have remained “essentially flat,” according to Finance Committee member Michael Wise.
The driver of property tax increases is a combination of factors, and a “cumulative effect,” according to Finance Committee member Leigh Davis. There were the capital projects over the last decade: a new Firestation, the renovation and expansion of Mason Library, and the construction of the Muddy Brook Regional Elementary and Monument Valley Middle schools.
Had these projects been staggered strategically, the cost might not have hit households so hard. “The timing was unfortunate,” Davis said, adding that it is a reason the Finance Committee “has asked for a timeline about when things are being paid off, to strategize. We’re trying to get that overview so we can see ahead 10 to 15 years.”
“The timeline of how we invest in the community is really important,” Davis said.
Then there is the Berkshire Hills Regional School District’s budget, which over the last decade was increasing “somewhat more than the rate inflation,” Wise said. A 7 percent increase for the Great Barrington slice of the 2016 school budget was jarring, and initiated proposed cuts that were rescinded after an outcry. Since the school district accounts for 51 percent of town expenditures every year, this is not insignificant, but the district has trouble reining in spending because of health insurance increases and other variables such as union contracts, or state laws that prevent — or slow — certain reforms.
In 2009, the town’s general fund operating budget (not including utilities or the school assessment) was nearly $10 million, and the school’s town assessment was just over that. Now, the town’s general fund operating budget is $10.9 million, and the school’s Great Barrington assessment is $13.5 million.
Another issue: the director of the Massachusetts Municipal Association told the Boston Globe that widespread property tax increases over “each of the last 10 years” are partly due to “decreased local aid from the state due to budget constraints, and the costs of distributing services outpacing municipal income.”
Great Barrington home values have also risen over the last decade, increasing household property taxes to $5,138 in 2015; the Berkshire County average is $3,288. The state average is $5,525. The town raises about 70 percent of its revenue from property taxes.
Wise says that the value of property in Great Barrington is “stratospheric.”
Jonathan Hankin, who sells real estate with Berkshire Property Agents, and who is also chairman of the town’s planning board, said that “the [real estate] market went crazy from 2000 to 2005, probably because of national factors; people had more money and there was the whole mortgage fiasco, when money was easy to get and banks were overvaluing.” But the market “plateaued in 2005, and in 2008 it crashed. It was terrible for a couple years and now it’s coming back slowly.” He said Great Barrington homes lost around 25 percent of value in 2008.
Hankin says that homes “were over-valued” for a time after that crash, since they are assessed every three years, during which time the market can change. Now the market is “creeping back up a little faster than inflation,” he added. And homes, particularly for those “who made money in a different real estate market” and buy “for twice the assessed value,” for instance, can drive up their neighbor’s values and property taxes.
Wise, who presented his progressive property tax reform ideas at the Selectboard last Monday, told the board that property taxes “feel higher here because family and household incomes are lower,” and that “in relation to median income, are the highest in Berkshire County.”
Yet Wise, an avid number-cruncher, says that the town has kept a handle on spending. “To his credit,” Wise added, “former Town Manager Kevin O’Donnell was good with numbers, and Jennifer Tabakin has been good with numbers. Management has kept things under control for the last few years.”
Davis, who is passionate about increasing revenue through economic development, says she sees “a silver lining coming” as “the debt service starts coming down for the [new] schools,” for example, and projects that will exponentially expand the tax base are in the planning or building stages. She mentioned 100 Bridge, for instance, a $40 million mixed used project that will hit the tax rolls to an estimated tune of around $400,000 per year. Revenue from those projects isn’t yet here to take the pressure off homeowners, she said. Still, she sees keeping the town’s infrastructure and services going — including the schools — “an investment in the community.”
“We need forward thinking and planning,” Davis added. “We can’t just stop investing — in roads, schools and police. But I think people will be relieved when they see there’s a plan and strategy, in the same way that the town’s wastewater project was phased.
“Unfortunately, the people working here full time can’t keep up with property values. Salaries don’t lend themselves to living here. But we want to keep the quality of life and safe schools. It’s a balancing act.”
To see the town’s budget, click here.
To see the school district budget, click here.
