Oak Bluffs all about Prop. 2.5
The Oak Bluffs finance and advisory committee (FinCom) formally recommended to selectmen a $24.5 million budget for fiscal year 2011. The committee also advised that another $847,000 be put to voters as Proposition 2.5 override questions. The recommended override questions include step raises for town employees and teachers, and money to restore positions cut by special town meeting voters in a cost-cutting move last fall.
The draft budget given to the selectmen on Monday also assumes that town voters will approve local option taxes on meals and hotel rooms and substantial increases in license fees and trash collection, to generate a total of $390,000 in new revenue.
The selectmen, who have the final say on the spending plan, made several changes to the recommendations. FinCom chairman Mimi Davisson strenuously opposed some of those changes at Tuesday's meeting.
The most controversial of Proposition 2.5 questions proposed at Tuesday's meeting were $123,000 for town employee step raises, and $127,000 for teacher's raises and other school expenses. The town is contractually obligated to pay those raises. If voters reject the ballot question, the pay increases must still be paid. In the event the overrides are defeated, it's most likely that the town would pay salaries and raises at the contracted rate, but lay off town employees and teachers to achieve the savings necessary to do so, according to town administrator Michael Dutton.
"When you say you're going to pay step raises anyway, you're going to pay fewer of them," said Priscilla Sylvia, a retired teacher and long time school committee member.
Selectmen voted 4-1, with Kerry Scott dissenting, not to face that dilemma. They folded the town employee raises, and that portion of the override question on school funding that represents teacher raises, back into the budget. To keep the budget balanced, they decided on a combination of cost cutting and new revenue. Ms. Davisson was disappointed with that decision.
"I think it is very important to the voters to have the opportunities to make these choices," Ms. Davisson said. "If they are valid, legitimate expenditures, then they'll be passed, people will support them. And if they aren't, then we will have to tighten our belts. I'm sensing a very strong desire for belt tightening."
Though the override questions and amounts are not yet final, voters will likely get a chance to vote on as many as 10 other Proposition 2.5 ballot questions. Most of them are aimed at restoring cuts made last year.
The largest expenditure is $220,000 for street paving. The money represents projects delayed in the current fiscal year in order to balance the budget. An override question will ask for $109,000 to restore police department cuts. Voters could also decide whether to restore lifeguard service at $75,000; restore personnel cuts for the board of health, $31,000; the assessor's office, $18,000 and the shellfish department, $29,000. Other requests are for public building maintenance, $30,000, and $68,000 for fire department salaries. The fire department increase would include a raise for the fire chief, from the current salary of $12,000 to $48,000.
The budget calculation contemplates an increase of revenue based on a 2.5-percent increase in the real estate property tax levy over last year's levy. That's the maximum allowable under the Proposition 2.5 tax limiting law, without permission from voters. If voters approve all of the override questions as outlined by the FinCom, taxes would rise 4.5 percent, for a total of seven percent. The tax rate would rise from the current $6.30 per $1,000 of valuation, to $6.59 percent per $1,000.
When selectmen voted not to put employee raises to a Proposition 2.5 vote, but move them inside the budget, it required a combination of new revenue and cuts to keep the budget balanced.
Selectmen voted to remove the $95,000 cost of property tax revaluation from the budget and instead pay for it from the town's stabilization fund. The stabilization fund currently stands at $1.3 million, well short of the $2 million figure favored by the finance and advisory committee. Removing money from the stabilization fund requires a two-thirds vote at town meeting. Selectmen also chose to increase revenue projections from a proposed meals tax from $200,000 to $225,000. Selectman Ron DiOrio said the towns that have adopted the local option meals tax are realizing revenue significantly higher than first projected. Selectmen also voted to raise the town's share of room taxes from four to six percent. If approved, and added to the current state room tax, the total tax on rooms would be 11 percent. The room tax is expected to yield and additional $100,000 in revenue for the town.
The FinCom heard spirited opposition from local hotel owners and innkeepers during public hearings and chose not to recommend a room tax. "The decision centered around the equity of taxing hotels, but having no mechanism to tax summer rentals," Ms. Davisson said. "It just seemed too excessive."
But the selectmen indicated a clear sentiment to establish the room tax. "That $100,000, which would come from visitors, would spare taxpayers, and take one big item off the overrides," chairman Greg Coogan said.
Both the meals and rooms taxes need approval from voters and will be on the warrant for the April 13 town meeting. The town projects $325,000 in revenue from the two new taxes. If voters reject meals and rooms taxes, the town would have to eliminate $325,000 in spending elsewhere in the budget.
The town also projects new revenue from several sources that are more likely, because they do not need voter approval. Figured into the budget is an additional $140,000 in revenue from trash collection. Town officials say that is the deficit they absorb every year, because the cost of trash stickers does not nearly cover the actual cost of trash collection. The mechanism for collecting the extra revenue is not yet defined. Raising the price of stickers, reducing trash services, or some combination of the two could erase the deficit.
Other proposals include increases in license and permit fees, including shellfish licenses, alcohol permits, and taxi licenses. Fees charged by the building department and health department will not likely be raised, because they were increased last year, according to Mr. Dutton.
The draft budget represents an increase of 3.9 percent over the current fiscal year budget. The current year's budget stands at $23,625,000, after town meeting voters took action to reduce spending last fall. The draft budget for the coming fiscal year totals $24,540,000.
The finance and advisory committee took note of several line items that represent significant increases. The assessment for the town's cost of educating students at the Martha's Vineyard Regional High School will increase $311,000. Personnel benefits will rise $290,000. The town expects to spend $90,000 to educate a special needs student who needs intensive services. The cost of workers compensation insurance is up $38,000.
Ms. Scott criticized the FinCom, saying the selectmen were not adequately consulted on the budget process. "I wish the board of selectmen had more input on the detail," she said.
"I know at least one selectman was at every meeting," Ms. Davisson said. "We had a public input session in January, we had a public hearing last week, we'll have another one Saturday. I'm puzzled by your comments."
The second of two public hearings held by the FinCom is scheduled for Saturday, March 13, at 10 am. The hearing will be held at the Council on Aging at 21 Wamsutta Avenue.