Frequently asked questions about the override

8/9/2019 Frequently asked questions about the override

1/16

I have heard people criticize the way the town is run. If thats true, why should I give the

town more of my hard-earned money?

What has the town done to try to eliminate waste and bring spending under control?

The town officials have found money in the past. Theyll find it again this time, wont they?

Cant we keep using money from the stabilization fund to get rid of our budget deficits?

I have heard some people suggest we should adopt a split tax rate that makes businesses in

Franklin pay more property taxes. Wouldnt that solve the problem?

We wouldnt be in a crisis if we hadnt spent money on the senior center, fire station and

new ball fields.

Why do some citizens disagree with rating agencies about Franklins debt?

The wording of the override questions lists specific dollar amounts for different

departments. Can the town guarantee that the funds from the override will always be

spent exactly the same way?

What is Proposition 2?

What is a Proposition 2 override?

When would the impact of an override take effect in Franklin?

What is my tax rate now and how does it compare to surrounding communities?

What happens if we do not pass an override?

What would passage of a Proposition 2 override mean to my tax bill?

Will the override solve all of our fiscal problems?

If Proposition 2 says my property taxes cant go up more than 2.5% per year, why have

they gone up so much in the last four years?

People tell me that our schools cost too much money, and that we have too many overpaid

administrators. Is that true?

Why should the community support the school budget?

Have you really laid off any teachers?

Why is the school district continually facing budget gaps?


2/16

What has the School Committee and administration done to budget in a fiscally

conservative manner?

What other federal and state funds support the school departments operating budget?

What are some other sources of financial support for the Franklin Public Schools?

How does per pupil spending in Franklin compare with spending in other Massachusetts

communities?

Pension costs are killing us, so why dont town employees fund their own pensions?

Why do parents pay fees for their children to ride the bus or participate in athletics?

I have heard people criticize the way the town is run. If thats true, why should I give the

town more of my hard-earned money?

Not everyone agrees with every decision made by town and school officials. The facts showFranklin is relatively well run. Our students have excellent test scores and graduation rates, yetwe spend below-average per pupil compared to similar-sized communities. Our crime rate andrate of fires are among the lowest in the state. Our recreation programs are hugely popular.Independent rating agencies give the towns financial management high marks. Our tax rate isthe lowest in the area. Our median home price is among the highest. Thanks to greatrepresentation on Beacon Hill, we receive well more than our share of state aid. Hundreds ofvolunteer citizens help keep Franklin a great place to live.

Since 1989, more than 3,500 Proposition 2 1/2 override votes have occurred in communitiesacross Massachusetts. About 40 percent of the time citizens have agreed to raise their ownproperty taxes for the good of their community.

No one likes to pay more taxes, especially in tough economic times, and people can debate anynumber of town and school decisions and policies. But the urgent issue Franklin faces is whetherits voters want to pay about $1 more a day to hire more police officers and firefighters, improvestaffing at its library, and to stabilize our educational programs.

What has the town done to try to eliminate waste and bring spending under control?

Streamlined operationso Centralized administrative functions (e.g., facilities, HR, IT, accounting)o Automated processes using information technology (e.g., payroll system)
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Reduced employee benefitso Increased employee medical co-pays, saving $200K per year

Increased volunteerism ( e.g., Senior Center reported 10,000 volunteer hours peryear)

Enhanced revenueo Residents passed a $2.7M override in 2007o Leased space on water tanks for cell towerso Increased fees for services (e.g., sports participation fees, bus service)o Approved a 0.75% meals tax that will take effect in FY 2010o Agreed to share recreation services and our library director with Medway

Spent cash reserves (e.g., used $7.5M 2005 to 2008) Delayed repairs to the public way (e.g., roads and sidewalks) Town and school employees agreed to defer pay increases in FY 2010 Reduced headcount

o Loss of more than 100 teaching positionso Loss of 7 school administrative positionso Loss of 32 municipal positions

Held the line on department recommendations to increase headcount. Forexample, the number of police officers remains the same today as in 1999,despite a 12% increase in town population and a two-fold increase in number ofpolice calls.

The fundamental financial problems the town faces have not been caused by waste, but byFranklins rapid growth over the last two decades. That growth dramatically increased the need

for services like professional, well-staffed police and fire departments, updated streets andsidewalks, sewers and water lines, additional recreational facilities, and better schools. But thetowns ability to raise revenue through property taxes is restricted by the state law, and fixedcosts for things like contractual obligations, utilities and health insurance keep increasing.


4/16

The town officials have found money in the past. Theyll find it again this time, wont they?

Town and school leaders have done what they could to protect services for the community. Themost critical issue facing Franklin is its dangerous reliance on state aid. We rank 1st out of 30peer communities in the percent of town revenue that comes from state aid. But state aid is arevenue source over which we have no control. In fact, our over-reliance on state aid was citedby Moodys Investors Service as a reason for downgrading Franklins bond rating in late 2009.The state aid we have come to rely on is estimated to decrease in the years ahead.

In the past, Franklin was able to protect core services by annually tapping into additional sourcesof revenue to avoid the need for property tax overrides. Those funding sources are no longeravailable. Franklin also has used legal settlement proceeds (which have been spent), incrementalproperty tax revenue associated with rapid population growth (which has dried up almostcompletely), one-time revenues such as federal stimulus funds (which are set to expire after thisyear), and money from our emergency fund. We cannot continue to rely on one-time wind fallsor state aid. Its time to decide the type of community we are willing to fund as citizens andtaxpayers.

Cant we keep using money from the stabilization fund to get rid of our budget deficits?

No. Using one-time monies to pay for ongoing costs is what leads to deficits. The funds we haveset aside now are the minimum we need to have on hand in the event of a disaster or seriousemergency. If we use any more of this revenue to pay for annual costs, the money wont exist tohelp the town through a crisis. And once the money is spent, how would the town continue topay for important services year after year? If the town decided to use the entire $5 million rainyday fund in the towns fiscal 2011 budget, how would it find that same amount when it came

time to pay for the fiscal 2012 budget?

I have heard some people suggest we should adopt a split tax rate that makes businesses in

Franklin pay more property taxes. Wouldnt that solve the problem?

A split tax rate will not generate any additional funding. Think of the amount of money a towncan raise from property taxes as a pizza. You can cut that pizza into four slices, eight slices oreven more, but it is still the same pizza.

Proposition 2, by law, prevents the amount that a community can raise from property taxes

from increasing by more than 2.5% per year. A split tax rate would redistribute how much eachclass of property will pay in taxes, but it wouldnt change the total amount of money the towncould raise. If the town decided that commercial property owners should pay more, the tax ratefor residential property would decrease but the total amount of the tax levy would stay exactlythe same. Franklin would still have to pass a Prop 2 1/2 override for the town's total tax revenueto increase. The Franklin Board of Assessors and Town Council have opposed a split tax rate,arguing that a single rate creates an incentive for businesses to locate in Franklin.


5/16

We wouldnt be in a crisis if we hadnt spent money on the senior center, fire station and

new ball fields.

These projects are the most visible examples of the Towns effort to maintain and improve itsbuildings and facilities for the benefit of the general community. The vast majority of thefunding for these renovations comes from the towns long-term capital improvements plan, alsoknown as the 20/20 Plan. This is money the town borrows as part of its ongoing effort toupgrade public facilities, streets, sidewalks and buildings. A small part of the town's annualoperating budget is used to pay off the debt that funds capital improvements, the same way ahomeowner would pay off a mortgage over time.

The last time the town built a new recreation facility was 1990. Since then, the population hasincreased by about 10,000 people. We built three schools in that time period to house the surgein students, but we did not build any recreational facilities for them. The Town madeimprovements to existing fields, added new fields, and brought back into use the field and trackat the High School. The existing track had not been useable for many years.

The seniorcitizen population in Franklin continues to grow. It is currently projected that citizensover 60 will increase from about 4,200 to over 7,500 in the next ten years. The old senior centerhad just two rooms and minimal parking which was completely inadequate for our populationand programs. The new center has seen a three fold increase in participation. It has become afocal point for older adults and their families with many varied programs, services and activitiesto address the needs and interests of our senior and disabled residents.

Why do some citizens disagree with rating agencies about Franklins debt?

There are some assumptions about municipal borrowing that may seem contrary to the averageperson. Think of it this way. Individuals need to borrow money and then pay it back in order toestablish their credit rating. Cities and towns do too. It is actually in the best interest of a city ortown to carry debt. Most folks that buy a house want to pay off the mortgage as fast as they can.Eventually, they sell their home; hopefully make a profit; and, someone else takes on themortgage. In the case of Franklin, however, the Town and its taxpayers own public propertyforever. We have hundreds of millions of dollars worth of infrastructure (buildings, parks, roads,schools, utilities) that need to be maintained, replaced, repaired, expanded, etc., on an ongoingbasis to meet community needs.

Just as homeowners take out loans for additions, improvements or repairs to their property, theTown borrows money for similar purposes. In the case of city or town, ongoing manageable debtis one indicator of the fiscal strengthbecause it demonstrates that the community is committed totaking care of important community property.

If we do not re-invest in our infrastructure in a timely manner, the overall appearance andoperations of the Town suffers. The failure to invest would eventually hurt property values. Whowants to live in a town with a crumbling infrastructure? Every homeowner knows that structuralproblems dont go away, they just get more expensive to fix.
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Our goal as a Town is to maintain a debt level between 3.5% and 4% of our general fundrevenues. This is a standard range for many municipalities. Our estimated FY 10 general fundrevenue (excluding the debt exclusions) is $90,011,796 and our general fund debt is $3,283,433or 3.6% of our general fund revenues. If we equate it to the average homeowner with ahousehold income of $60,000 per year, the mortgage payment would be $2,160 per year or $180

per month.

The wording of the override questions lists specific dollar amounts for different

departments. Can the town guarantee that the funds from the override will always be

spent exactly the same way?

Only for one year. There are some states where property taxes are divided into school taxes andother taxes, but that is not the case in Massachusetts. All property tax revenues flow into thetown's general fund, and the Town Council can only allocate money from the general fund oneyear at a time, based on the town's priorities and needs. This provides flexibility in casecircumstances change; one year the Police could need more money and the next, it could be theLibrary.

The override will balance the budget and prevent a major deficit. It will increase the amount ofmoney in the general fund that Franklin will have available to meet our town's needs in futureyears, providing better financial flexibility to help the schools, police, public safety and library,as well as other important services. The percentage of Franklin's budget allocated to each towndepartment has been relatively stable from year to year, and it would take extreme financialcircumstances for the Town Council to attempt to dramatically change the budget. Althoughthey cannot legally make any guarantees, the Town Council and Town Administrator haveclearly stated their intention of adhering to the numbers given in the override question in future

years.

What is Proposition 2?

Proposition 2 was a Massachusetts ballot initiative that became state law when the votersapproved it in 1980. The law puts a 2.5-percent cap on the amount of money a community canraise through property taxes from year to year, not counting revenue from the assessed value ofnew construction and building improvements.

It is important to understand that Proposition 2 does not say that your property taxes cannotincrease more than 2.5-percent a year. It simply says that the total amount of money raisedthrough property taxes, known as the tax levy, cannot increase more than 2.5-percent annually.In addition, a community can increase its levy limit each year to reflect new growth in taxableproperties.


7/16

What is a Proposition 2 override?

There are three different ways a community can increase its property taxes above the levy limit.What the town of Franklin is considering putting before the voters is an override of its levy limit,which would increase the limit by a specific amount.

The other ways for a community to change how Proposition 2 would apply are through a debtexclusion, which temporarily excludes from the levy limit an amount of money to pay for newdebt, and a capital outlay exclusion, which allows a community to raise its levy limit for one yearfor the purpose of funding a specific capital project. In the past, Franklin voters have approveddebt exclusions to build new schools.

When would the impact of an override take effect in Franklin?

The June 2010 override ballot question would apply to the fiscal 2011 budget. That is, the

override would take effect on July 1, 2010. However, the increase in taxes would not show upuntil the third quarter tax bill which is mailed at the end of December and due by February 1,2011.


8/16

What is my tax rate now and how does it compare to surrounding communities?

Franklin employs a single tax rate for both commercial property tax payers and residentialproperty tax payers and that rate is currently 12.03 per thousand dollars of assessed propertyvalue. Fourteen of our thirty peer towns employ split, or dual property tax rates, one forresidential payers and a higher rate for commercial payers. Set forth below is a chart indescending order which shows how Franklins $12.03 single property tax rate compares to our15 other peer towns that employ a single property tax rate. Franklin also happens to have alower property tax rate than most of our 14 peer towns that employ a split tax rate.

Town 2010Tax

Sharon 17.92

Westborough 16.98

Holliston 16.31

Medway 16.29

Hopkinton 15.76

Chelmsford 15.15

Northborough 14.38

Medfield 14.24

Southborough 14.06

Average 13.95

Reading 13.75

Millis 13.64

Franklin 12.03

Natick 11.67

Foxborough 10.91

North Attleborough 10.44

Shrewsbury 9.68


9/16

What happens if we do not pass an override?s in and whats out?

What would passage of a Proposition 2 override mean to

my tax bill?

On average, taxpayers will pay an additional $0.69 per $1,000 inassessed property value to support the $3 million overrideamount. The table to the right shows the impact for variousassessed values.

Approximate Impact from$3 million Override

Assessed Value Impact

$ 200,000$ 300,000$ 400,000

$ 500,000

$138$207$276

$345


10/16

Will the override solve all of our fiscal problems?

Unfortunately, it will not. However, it will balance our budget this fiscal year. It is estimated thatnext years budget may require as much as an additional $6 million in revenue for fiscal 2011 tomaintain level services. This is due largely to the anticipated decrease in state and federal aidthat have been received in each of the last two fiscal years.

Going forward, Franklin will need to confront the fact that basic municipal and school expensescontinue to outstrip its ability to raise new revenue from property taxes. There will be othercommunity needs, like the eventual renovation of Franklin High School, repairs to roads andsidewalk, and the towns unfunded retiree health care, as well as annual increases in fixed costsfor insurance, contractual obligations and utilities.

If Proposition 2 says my property taxes cant go up more than 2.5% per year, why havethey gone up so much in the last four years?

Proposition 2 does not say that your taxes cannot go up more than 2.5% each year. It says thatthe total amount of money the town raises from property taxes cannot increase by more than2.5% a year plus new growth.

The reason some residential tax bills have increased significantly over the few years is becausethe market value of some homes probably your familys most important investment hasincreased. This is due in part because Franklin is perceived to have good municipal services,strong public safety, convenient businesses and top quality schools, and, hence, Franklin is

considered a great place to live. Our assessed and fair market property values reflect that marketperception.

Notwithstanding the appreciated values referenced above, some residential property ownershave, in fact, experienced a flattening or even a decrease in the assessed value of their homes inrecent years due to the macroeconomic environment. And, keep in mind that commercial andindustrial property is assessed based on income, so the value of those assessments has beenstagnant due to the economic downturn that affected the business community.

While the total amount of revenue the town can raise from property taxes can only increase bylaw, by 2.5% each year, how much money each property in the town contributes to the totalamount can change based on changes in its respective assessed and/or fair market value.


11/16

People tell me that our schools cost too much money, and that we have too many overpaid

administrators. Is that true?

Based on statistics maintained by the Massachusetts Department of Elementary and SecondaryEducation (DESE), Franklin pays less than half of the state average for administrative and laborcosts. The statistics for all 11 categories of education spending are included below:

According to Massachusetts Department of Education, more than 85 percent of the K-12 districtsin the state spend more per pupil than Franklin. Franklins per pupil spending is the third lowestamong its 30 peer communities. The per pupil expenditure for children in Franklins regularday school programs (which excludes Special Education) has lagged well behind the state

average for the last 5 years, according to the Massachusetts Department of Elementary andSecondary Education. In fiscal 2008, Franklin spent $9,751 per pupil in these programs -- $2,702less per pupil than the statewide average of $12,453.

Why should the community support the school budget?

The commitment to educate our children is a commitment that the residents of Franklin havelong supported. Horace Mann, the father of public education and integral to Franklins historicallegacy stated, Education then, beyond all devices of human origin, is the equalizer of conditions

of men, the great balance wheel of the social machinery.

The School Committee, administration and staff developed a fiscally responsible budget thatpromotes student achievement, protects core programs and is respectful of the current economicclimate. The FY 2011 proposed budget requests a 3.89% increase to maintain level services. Wehave used grants, stimulus and revolving funds to reduce the budget gap and we are requestingwhat we needed to maintain the program we currently have in place for our students.


12/16

Having strong and vital schools is important for every community. Those who advocate forgreater investment in education often make the economic argument: more education leads tohigher wages and is critical for financial stability and independence. Theyre right. Robustevidence supports the view that higher levels of educational attainment are linked to higherincomes, less unemployment, less poverty, and less reliance on public assistance.

More education is also linked to better physical and mental health, longer lives, fewer crimes,less incarceration, more voting, greater tolerance, and brighter prospects for the next generation.More education is good for individuals who stay in school to earn their high school degree orwho enter and graduate college, but it is also good for all of us, paying big dividends in the formof increased civic engagement, greater neighborhood safety, and a healthy, vibrant democracy.


13/16

Have you really laid off any teachers?

The tables below reflect, over a 10 year period, the increase in Franklins student population andthe associated decrease in its teaching population. At its peak in 2005, Franklin had 517teachers. Since that time, Franklin has eliminated more than 100 teachers. These staffing cutshave taken place at the same time Franklin has experienced increasing student enrollments,resulting in larger class sizes. That is a worrisome trend and is not a good long term indicator forpositive educational results.


14/16

You can obtain additional historical teaching figures in Franklin at the following blog post:http://franklinschoolcommittee.wordpress.com/2008/05/17/information-on-teachers-in-franklin/.

Why is the school district continually facing budget gaps?

Franklin, as with many Massachusetts municipalities, is faced with structural deficits as costsand services rise faster than the available 2.5% increase of annual tax revenues. Healthinsurance, retiree health insurance, contractual obligations, and unfunded federal and statemandates result in cost increases that outpace the 2.5% annual increase limit. To become morefiscally sound, Franklin needs to continue to operative efficiently and keeping cost relatively lowwhile and generating additional tax revenues in order to provide the high level of services thatcitizens desire but at a reasonable financial cost to such citizens.

What has the School Committee and administration done to budget in a fiscally

conservative manner?

Over the last 10 years, Franklin has (i) significantly reduced and/or eliminated programs andpositions (over 100) while meeting higher educational standards/accountability requirements asestablished by federal and state law, (ii) consolidated facilities and technology services, and (iii)
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effectively sought and received grants to offset a variety of operational costs. Moreover, Franklinhas implemented a number of Go Green energy savings initiatives including (A) solar panels atParmenter Elementary School, and (B) water gardens at Franklin High School. Finally, Franklinhas implemented a variety of online services to reduce personnel costs and paper consumption.

What other federal and state funds support the school departments operating budget?

Franklin regularly seeks federal and state grants to supplement the operational budget. DuringFY 2010 Franklin received $2,784,792 in grants to provide additional staffing and supplementalservices to meet the needs of students.

What are some other sources of financial support for the Franklin Public Schools?

The district receives significant financial support from within the community to advance themission and vision of the school district; the loss of which would be detrimental. Annual gGrantsand support are received from the: (i) Franklin Education Foundation, (ii) Music Boosters, (iii)Athletic Booster Clubs, (iv) Parent Communication Councils (PCC), etc.

How does per pupil spending in Franklin compare with spending in other Massachusetts

communities?

Based on data released by the Massachusetts Department of Elementary and SecondaryEducation Office of Finance, as of FY 2009, Franklin's per pupil expenditures are $10,010 whilethe state average is $13,060. Our spending per pupil is 23% less than the state average. Threeyears ago, when speaking about the budget, we noted that Franklin was below the state averagein 9 of 11 categories of education spending. The only areas where we outspent otherMassachusetts communities were in classroom teachers and instructional materials. Two yearsago, Franklin slipped further. With the continued education cuts, Franklin fell below the stateaverage in 10 of 11 categories. Last year, we predicted that with the loss of more teachers,Franklin was sure to dip below on all 11 categories next year. The latest data from DESE showsthat it has, indeed, happened.

By most objective measures Franklins School District outperforms its peer districts. Based onthese two facts, most observers believe that Franklin Public Education is a tremendous, cost-

effective value when weighing the achievement results against local taxpayer cost. To look foryourself at all of the data comparisons, try the District Analysis and Review Tool (DART) at theDESE website by linking tohttp://www.doe.mass.edu/sda/dart/. The DART offers a snapshot ofdistrict and school performance, allowing users to easily track select data elements over time,and make sound, meaningful comparisons to the state or to "comparable" organizations.
http://www.doe.mass.edu/sda/dart/http://www.doe.mass.edu/sda/dart/http://www.doe.mass.edu/sda/dart/http://www.doe.mass.edu/sda/dart/


16/16

Pension costs are killing us, so why dont town employees fund their own pensions?

Public employees are generally not covered by Social Security and DO self fund their retirementthrough a municipal pension system. Teachers, for example, contribute as much as 11% of theirannual salary to this program and local property taxes do NOT fund the system. State taxrevenues fund a portion of current benefits but the majority of such revenues are allocated to theunfunded municipal pension liability (i.e., in fiscal 2008, 77 percent of the Commonwealths$1.3 billion contribution to State and Teachers Pensions covered the unfunded liability while 23percent went to pay for current retiree benefits. Reference:http://www.middlesexretirement.org/Special_Commission_Report_9.09.pdf

Why do parents pay fees for their children to ride the bus or participate in athletics?

Known as user fees, they were implemented to keep costs lower. Per state law, Franklin is onlyobligated to bus K-6 students that live at least two miles from school. Similar to 200+

Massachusetts communities, Franklin (i) collects a student pay-to-ride fee of $325, whichrepresents two-thirds of the actual cost, and (ii) imposes athletic fees to help lower athletics costor prevent their elimination. Importantly, the override will not result in decreased user or athleticfees but will only maintain current service levels and, if it fails, the School Committee will likelyincrease user and athletic fees.
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Documents

Frequently asked questions about the override