January 22, 2013

Last week I sent out a message with the latest information showing tax rates in Chelmsford are very high compared with other communities. Rather than respond substantively with information about what’s to be done about the problem, selectman Jon Kurland responded with personal attacks embedded in an all-too-familiar disinformation campaign.

First Kurland claims that I “don’t understand municipal finance,” because, you see, “the tax rate is based upon the budget that was approved at Town Meeting.” So it’s Town Meeting’s fault, not the budget and corresponding tax increase that’s drawn up for us by the “superstar” Town Manager!

This is news to me. I quite understand municipal finance, especially in Chelmsford. You spend and overspend and hike taxes to pay for it. If that’s still not enough, then you borrow.

Here’s how it works; let’s feature an actual example from the last budget vote. I submitted an amendment to remove $300,000 for two DPW vehicles that were average age (yes, I looked it up), low mileage and low hours of use. The Town Manager argued that the amount was “insignificant.” That’s because the Town did not have $300,000 available for those vehicles, so the budget included borrowing the funds. Therefore, with interest, the amount was “only” some $17,000 per year.

For twenty years.

Do you see how this works? If something’s discretionary and expensive and the Town can’t afford it, you don’t chop it from the budget. You just chop the cost into small pieces by borrowing to pay for it and focus only on the annual cost number.

And, voila! You can purchase those two brand spanking new vehicles for just $17,000. (Per year. For twenty years. Read the fine print.)

Kurland goes on to claim that over the past several years, of the over 350 towns and cities in Massachusetts, Chelmsford has fallen all of 4 places in tax rate. So, “compared with other cities and towns, our taxes have gone down.”

So when you pay your taxes that are 32% higher than Wilmington, just be grateful that they’re not even higher! In fact, remember that Kurland’s statistics show that your taxes have actually “gone down!”

There, feel better now?

Kurland goes on to spuriously blame tax hikes on Chapter 70 funding, “which has been below that of our neighboring communities.”

Well, Chapter 70 funding has always been lower for Chelmsford, so it has nothing to do with our excessive tax hikes.

That’s because Chapter 70 funding has always been based on a simple social contract: all kids in Massachusetts should have the opportunity for a decent education. (I used to wonder whether it was a good idea to tax the childless to pay for educating other peoples’ children, until a woman mentioned to me that “if you think education is expensive, try ignorance.” I don’t wonder any more.)

So communities that are “family friendly” and have a higher percentage of kids in their schools, and which therefore have less money per student that communities like Chelmsford (which has a higher percentage of senior housing, for instance) get enough funding from the state to guarantee that there is a baseline amount of money per pupil in the school budget for that community.

In other words, Chapter 70 is purposely structured so that it keeps taxes from skyrocketing in communities with more kids per average homeowner.

Chelmsford has a higher average of households per child in school than neighboring communities, so it should have lower tax rates per household and therefore need less Chapter 70 funding. But Chelmsford doesn’t have a lower tax rate before Chapter 70 funding is taken into account! It has a higher tax rate. That’s just bad management and it has nothing to do with Chapter 70. But Chapter 70 is a convenient scapegoat for folks in Town Hall who don’t want to address the tough chore of curbing the cavalier attitude of certain town officials toward expenditure of your tax dollars.

In other words, they don’t want accountability. In fact, in Kurland’s case, the very word makes him visibly furious.

So Jon Kurland is hopping mad, but not about the waste and fraud that will continue to escalate homeowner tax rates if not addressed. Rather, he’s hopping mad that there’s public dialog about the problems and how they might be addressed. Note that he resorts to false logic and personal attacks, rather than addressing the B.S. (Bad Sociology) in Town Hall.

If you’re happy with excuses and rationalizations while taxes skyrocket, then vote for incumbents in April. If instead you’d like to see steps toward proper oversight and better public policy, then vote for challengers on Tuesday, April 2.

Sincerely,

Roland Van Liew

* P.S. Below are Jon Kurland’s public messages in full for you to examine.

Jon Kurland: “I just read Roland's latest rant about taxes in town. It clearly shows that Roland does not understand municipal finance. The tax rate is based upon the budget that was approved at Town Meeting. The fact is that the values of commercial and condos dropped which increased the single family rate however, the real measure is how we tax compared to all other cities and towns. For many years we would hover between 63-66 highest in the state even before Paul became town manager. We are now at 70 which is where we have been for a few years. That means that compared with other cities and towns, our taxes have gone down. Not much comfort but again, our chapter 70 education funding has consistently been below that of our neighboring communities. Roland, two more questions that you will ignore: 1) what is our Chapter 70 funding compared to Westford, Billerica and the other towns you compare us to; and 2) what alleged "no bid" contracts do you keep referring to? As you know the BOS votes for all major contracts at open BOS meetings that are telecast live. There are small contracts where the town gets a discount by purchasing from state approved vendors where we get bulk discounts. Have you ever even asked to meet with Paul or John Souza to get facts? No, in my opinion, you are just too lazy to get the facts when you decide to go on another rant. This last screed is an example of having a little information that he got from a chart on line with no understanding behind the numbers.”

[The message below tries to posit that because homeowners in Westford that own more expensive homes pay a higher tax bill than a Chelmsford homeowner with a less expensive house, that Chelmsford residents are paying “far less property tax.” This is just like saying that when I pay my 28%+ in Federal Income Tax, I am paying much lower taxes than Mitt Romney or Warren Buffet who are paying around 15%. In fact, according to Kurland, I should be happy with a 98% tax rate, because I’d still be paying “far less” than Warren Buffet. If you agree that because the total amount that I pay is less than Warren Buffet, that this is “fair” or even an advantage to me, then you must be deliriously happy with both your federal tax rate and your property tax rate in Chelmsford. Because there’s somebody, somewhere, who owns a heckuva lot more house than you and pays a heckuva lot more property taxes on it. Of course, Kurland’s argument makes absolutely no sense at all if instead of Westford you compare to Wilmington, where both the tax rate and total tax amount per home are far below Chelmsford. That’s why he selected Westford for his fallacious rationalization.]

Jon Kurland: “Here are some of the errors in Roland's rant. Thanks to our Chairman of the Board of Assessors. Roland says, "Chelmsford's property taxes are 11% higher than Westford." Westford's 2013 Average residential tax bill is $7.097 vs. Chelmsford's $5,799. The tax paid by the average Chelmsford property owner is 23% lower than that paid by the Westford property owner, not 11% higher as RVL says. If you look at Andover and North Andover, you find that the average residential property owner in Chelmsford pays far less property tax than is paid in those communities. What determines how much you pay is the value of your property and the amount of revenue that must be raised through property taxation. The rate is only a function of the levy divided by the town's value. So again, either Roland doesn't know what he's talking about or he is intentionally misleading the voters.”

[A final point here. Higher tax rates not only raise your tax bill, they depress the value of your property. As an example, the tax rate on a home in Chelmsford is over $4 per thousand more than in Wilmington. So for a $400,000 house, that results in an additional $1600/year in taxes. That reduces the amount a buyer can afford to finance by some $40,000. That’s at current low interest rates; at higher interest rates it reduces the amount a buyer can afford to pay by even more. If one can buy $400,000 of house in Chelmsford vs. $440,000 of house in another community, then other factors being equal one would probably buy in that other community, further depressing values in Chelmsford. And when one sells in Chelmsford, one is only going to be able to get $400,000 and not $440,000 from buyers who are comparing the total value they’re receiving for their mortgage payment against surrounding communities.]