Monday, December 10, 2018

Are we going to talk about this $4M?

If you're in Worcester, you might remember this headline from the last week of November: Worcester taxpayers to benefit from $4M budget error.
I initially read the article expecting to see something of how the error occurred, where in the city's budgetary process it happpened, and what they were doing about it...
Thomas F. Zidelis, the city’s chief financial officer, said Tuesday the city should be raising $307 million in property taxes this year, reflecting the allowable 2.5 percent tax-levy increase from the previous year.
But when the budget was calculated, he said, it was mistakenly built on raising $303 million in taxes.
Instead of increasing the city’s tax levy by 2.5 percent, as allowed under state law, Mr. Zidelis said the tax levy was increased by only 1.35 percent, thus understating the levy for the budget by approximately $4 million.
Nothing.
So I checked the city council backup from that meeting, thinking it perhaps had been covered there; it's the attachment to item 7.25 A on this agenda:

Apparently not. Also note that the Manager's backup says "understated" rather than that there was a mistake, and it goes quickly on to how this is a "savings" for taxpayers.

Are we just going to gloss over that somehow we had a $4M mistake in last year's taxes?

The spin here, of course, is that this is "savings" that will be passed onto city taxpayers. This misses that this was not, it appears, a deliberate decision; no one ever recommended it, no one deliberated it, no one voted it, intentionally. It was an error.
This also ignores how budgeting works: Massachusetts property taxes are already capped ('though subject to override) at 2.5% increases per year. A year in which those funds are not raised cannot be recovered. Thus the city lost $4M in revenue--that could be used on anything from hiring teachers to fixing water pipes--and it will never get that back, as we start from that lesser point for FY20.
Taxation, as Judge Brandeis put it, are the price we pay for civilization. We didn't decide to pay $4M fewer dollars on that last year as a city, and spinning this as a tax savings does us all a disservice.


PS: because the FY19 foundation budget is calculated on FY16 DOR filings, this didn't impact the WPS budget for FY19. We'd best see this corrected before we get to the FY19 rate being used to calculate the foundation budget, however. 

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