BUDGETS AND RESPONSIBILITY
BY DANIEL W. DRAKE ASSOCIATE PUBLISHER
For quite a few years now, the taxpayers of Nantucket have been fortunate. The Board of Selectmen has been even more fortunate. The rising tide of property values resulting from the island's popularity, fueled further by the torrid pace of residential construction, has enabled the town's operating budget to go from $45 million in FY2000 to almost $70 million in FY2008, without much more than a couple of nods to Proposition 2 1/2.

The total of Nantucket's approved operating overrides since Proposition 2 1/2 became effective in 1982 is about $9.3 million. Since 2000, they have totaled $2.47 million of which $2.2 million was approved in 2006 for FY 2007. Therefore, the town's operating budget, all though it has increased at an annualized rate of about six percent each year between 20060 and 2008 has pretty much kept within the requirement that the tax levy limit only increase by 2 1/2 percent per year plus the addition of the growth in the tax base.

Now push has come to shove. For FY 2009, beginning July 1, the proposed town/school combined budget came in at $76.6 million, almost $3.3 million dollars more than Proposition 2 1/2 would allow. A budget of that magnitude would represent a ten percent increase over FY2008. Even at $73.3 million, the increase would be in close to five percent, almost double what Proposition 2 1/2 would allow if it weren't for the growth in property values incorporated into the tax base in the last 12 months.

Last month, the selectmen and the School Committee agreed on presenting the $3.3 million operating override to the voters at Town Meeting in April. Most of the money would have gone to the town and the schools, but about $500,000 would have gone as a contribution to reducing a substantial gap in the town's funding of its employees' retirement benefits. Also, importantly, if the voters approved the operating override, the tax increase resulting from the override would have been permanent, carrying over to future years.

One does not envy the selectmen in making budget decisions or the school committee members in preparing the school budget. The choices are often difficult and the subject matter is frequently arcane. It is important that the decisions be made carefully and in a disciplined fashion.

Now, the Nantucket Board of Selectmen, a week before the final budget is scheduled to be approved by the Finance Committee, has picked up a very large monkey wrench and thrown it into the FY 2009 budget process. They have instituted a fire drill of major proportions both by town administration and by the school committee.

They chose to present a unified town/school budget to the voters. They agreed, for better or worse, to a combined budget incorporating a $3.3 million override. They approved in principle a budget which, while incorporating a rate of increase that is unsustainable over any length of time, tried to make up for some ground lost in recent years, as escalating personnel expenses have overwhelmed the portion of the budget allocated to the purchase of goods and services.

Then, this past week, at the eleventh hour, they changed their minds. They decreed that the town departmental budget requests for non-personnel expenses were to be cut by 15 percent. They also decreed that there were to be no cuts in personnel expenses, which represent approximately 80 percent of the total budget. And they asked the School Committee to do the same.

Why did they do the about-face? The selectmen claim it is because voters were telling them that they would have to leave the island if taxes are raised, the cost of living being what it is here. Also, undoubtedly, both town and school officials have been getting pressure from the Finance Committee to reduce the 2009 budget proposal; that is the Finance Committee's role and certainly the bent of some of its members. Assuming both to be true, it is still irresponsible for the selectmen to have acted as they have.

As this week unfolds, we will know better what the final scenario will be; where, at a macro level, the cuts will be made in the town's portion of the budget and whether the School Committee will accede to the selectmen's jawboning and do the same. The problem is that we, the voters, will have no way of really knowing the impact of the cuts - what potholes won't get fixed, what EMTs won't get trained, what life guards won't have the proper equipment or the classroom impact - until it is too late to do anything about it. For better or worse, there is a process, and through their last minute effort, the selectmen have effectively subverted that process.

To meet the new budget goals, there is talk, once again, of eliminating the $330,000 of human services grants (which have not been increased in at least four years) and eliminating the teen center and adult day care programs. The town spends less than one percent of its budget on human services. Could these costs be eliminated? Of course they could, but these funds provide lifelines to some of our citizens which, if cut, could compel them to move off the island.

In the face of the island's concerns about its teenagers, the teen center program should probably be ramped up rather than eliminated.

Fiscal responsibility involves assessing needs, budgeting accordingly and monitoring spending. Fiscal responsibility in the municipal context involves abiding by the processes which have been set up to provide checks and also to obtain input. Fiscal responsibility involves planning ahead.

The gravy train for Nantucket's tax base has almost reached the terminal. Many houses are selling near or below their assessed value. As reported by Rob Ranney elsewhere in this newspaper, three building permits were issued in January, 2008 as against more than 120 in January 2007. The growth that has been built into the tax base every year would seem to be coming to an end. It is never easy to decide when an override should be proposed, but a considered decision today must incorporate some perspective on the wisdom of doing it now as opposed to the near future. What the selectmen are trying to do is make it someone else's problem.

The precipitous action of the selectmen in throwing the budget up in the air and not seeming to worry about where it will land is not fiscally responsible. As effectively pointed out by Finance Director Connie Voges, not including the possibility of personnel cuts in the mix is fiscally irresponsible. And the selectmen not having the courage of their convictions, whatever those may be, throughout the budget process is neither

fiscally nor politically responsible. I

The "Lighthouse Keeper" reflects the views of the author and does not necessarily represent the editorial position of The Nantucket Independent. Please send any ideas or comments to drake@nantucketindependent.com.