In an unprecedented decision, we, the members of the West Tisbury Finance Committee, voted to “not recommend” the warrant article enabling the town to spend money on its budget. The reasons are simple.
By current projections, the town of West Tisbury will face a 9.6 percent increase in its tax levy for fiscal year (FY) 16, requiring an override of Proposition 2.5. The projected 9.6 percent (over $1.3 million) increase comes on top of a 6 percent increase last year. By comparison, increases to the town’s levy over a period of eight years, from FY07 to FY14, averaged 2.43 percent per year. This is a worrisome trend.
Town financial managers have done an exemplary job in retiring old debt as we have taken on new obligations, in order to minimize levy increases. They are to be commended for their efforts, as are other town departments that have maintained as close to a level budget as possible.
However, two factors will continue to challenge the town’s attempt to maintain fiscal discipline in the years ahead: exploding education costs and OPEB (other post-employment benefit) obligations.
All can agree that we want the best possible education for our children. The difficulty arises in balancing the costs associated with achieving that goal against other competing needs of the community. Education costs currently comprise 57 percent of the town budget. Education expenses account for 82.5 percent of the total increase to the town’s operating budget for FY16. West Tisbury’s share of the cost of operating the Up-Island Regional School District (UIRSD) alone will increase 11.8 percent this year, with the average per capita student spending rising to $29,061. The increase over two years has been 22.2 percent.
Compared with other towns, the UIRSD currently ranks third highest in the state for per-student spending, and over twice the state average. Closer to home, UIRSD spends 23 percent more than any of the other school districts on the Island.
The problem of education costs is exacerbated by inadequate state funding. The commonwealth’s contribution to the UIRSD budget via Chapter 70 aid for FY16 was $812,797. The total operating budget for the UIRSD for the upcoming year is more than $10.5 million. In stark contrast to UIRSD’s ranking in actual per-student spending, it ranks second lowest in the state in per capita student funding received from the commonwealth. Compounding the problem are proliferating state unfunded mandates, which obligate school districts to commit significant financial resources to programs for which there is little offsetting financial assistance.
The current dynamic is unsustainable. The UIRSD and Martha’s Vineyard Regional High School must look for efficiencies to reduce education costs, given the significant impact they have upon the town budget. The Massachusetts Municipal Association (MMA) recently sponsored a forum on the Cape attended by the Foundation Budget Review Commission, a group tasked with obtaining community feedback on the Chapter 70 process and identifying issues unique to Cape communities. It was well attended, with numerous school superintendents from across the Cape lining up to make their appeals to the commission. The pain felt by Cape communities was clear; budget pressure has resulted in school closures, program cancellations, and the release of teachers as well as administrators. Here on the Island, we have not yet had to confront difficulties on the scale experienced by many communities on the Cape.
In order to avoid more painful choices in the future, we urge greater fiscal restraint by our schools. We also would ask school representatives to avail themselves of future opportunities to communicate with the MMA, as well as state representatives, to seek a reassessment of the now-outdated 1993 Chapter 70 funding formula, as well as a re-evaluation of unfunded mandates, with a view toward either better funding or providing relief from the latter.
Unfunded OPEB obligations (nonpension benefits paid to employees after retirement, such as health, dental, and life insurance) present a second disconcerting financial trend. Due to pressure from bond-rating agencies and others concerned that local governments meet these commitments, the Government Accounting Standards Board (GASB) now requires financial statements to reflect these liabilities, including a plan of how OPEB liabilities will be amortized over a 30-year period. The town of West Tisbury has made meaningful progress in meeting this commitment through its regular contributions to an Island-wide trust fund. Other Island governmental entities under our budget review have less robust plans to meet OPEB obligations. The Martha’s Vineyard Commission has approximately $2.2 million in unfunded liabilities, the Up-Island Regional School District $15 million, and the Regional High School $33 million.
While not unique to our community, unfunded OPEB liabilities, if not seriously addressed, are likely to have a significant effect upon the long-term finances of towns Island-wide, and render moot efforts to moderate fluctuation in tax assessments from year to year.
The FinCom “no” vote is a beginning; we need the entire community to pitch in to solve this very real problem.
The members of the West Tisbury finance committee are Katherine Triantafillou, Gary Montrowl, Sharon Estrella, Greg Orcutt and Doug Ruskin.