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Response to the Acton FinCom Point of View

Tue, 02/03/2009 - 9:30pm — ClintS

 I appreciate the effort by FinCom to produce a Point of View (POV) document, and for the FinCom request for feedback.  The POV  document recognizes the dire economic conditions we see all around us.  It talks in general about the key issues to be considered in this year’s budget, but this POV needs to be more specific and to provide strong specific guidance for prudent budgets this year because, as the WSJ reported, the U.S. economy is deteriorating more rapidly than expected, indicating the recession will be deeper and longer than feared.

 
The POV suggests strict new hiring restrictions in general terms.  It should set a specific goal such as:  no new hiring this year due to the economic downturn, deferring any new hiring until things improve.
 
The POV suggests that Acton adopt a strict attrition policy in general.   It should set a specific goal that in event of staff retiring or resignation, departments will replace only class room teachers, police and fire personnel, until things improve.   
 
The POV recommends a “hard reality” for raises, a general term.  It should set a specific goal such as:  no raises this year where possible due to the economic downturn.  The collective bargaining should reflect the hard reality facing Acton taxpayers who are not getting generous raises and benefits this year.
 
The POV recommends in general terms a cost reduction effort.  It should set a specific target for cost reduction targets of, say $1M, and reduce budget requests accordingly.
 
One of the specifics in the POV is that taxes should be raised by 2 ½ % this year.  Acton already has one of the highest tax burdens on its citizens of any towns in Massachusetts, and FinCom should reconsider recommending this “business as usual” tax to the max philosophy of the past many years.
 
The dire economic news around us and the rapidly increasing unemployment indicates that Acton should take strong measures with its budgeting this year to protect its most vulnerable citizens.  Unemployment in Acton has taken a noticeable uptick in the past six months, and October 2008 showed 378 unemployed vs 296 last October, a 28% increase year over year. 
 
The POV document can help Actons most vulnerable citizens by calling for two budget choices this year, one that provides a normal  “business as usual” budget, and one that gives voters a choice for a zero tax increase budget.
 
A zero tax increase budget can realistically be done without layoffs by changing the general POV to the specifics similar to those noted above.  There will be about 30 to 40 retirees and resignations this year, and replacements should only be allowed within a zero tax increase budget guideline.  User fees should be increased. Pay and benefits increases need to be deferred where possible until the economy turns around.  Cost reduction needs to be seriously added to the budget.
 
This dire economic news also indicates that Acton should take strong measures to preserve its reserves for the long run as overwhelmingly endorsed at the recent Special Town Meeting.  This is particularly needed as the preliminary Acton Leadership Group discussion is to spend about half of the available reserves to protect operating budgets.  (For clarification, a suggestion was made to include the Health Trust reserves as an available reserve, to be spent this year, somehting done in 2002 that led directly to an override).
 
The POV needs to add a provision to protect the reserves at the level as held by comparable towns , which was shown to be a 10% reserve.  In addition, the POV needs to specifically endorse the Massachusetts Department of Revenue recommendations for best practices for a town like Acton, which would mean a policy of not spending reserves on recurring expenses, similar to policies of comparable towns in the area.
 
Finally, FinCom has the chance to use the POV as a means to greatly help the voters of Acton, particularly those most likely to get hurt by the economic downturn.  The way to do this is to set specific guidelines for the operating budgets, and then to only support operating budgets that adhere to them.
 
Hopefully these suggestions will be useful to help protect Acton’s citizens in these dire economic times.
 
Clint Seward, ActonVotersGroup.com