The Acton Leadership Group, which is made up representatives of the Select Board, the Finance Committee, and the Acton-Boxborough Regional School Committee, has its own version of “hot stove season.” But instead of gathering around an antique wood stove at a general store to discuss their favorite baseball team and players, they met at Acton Town Hall on Wednesday, Jan. 10, 2024, to discuss the prospects for a Proposition 2 1/2 operational override vote this spring.
Unexpected health insurance cost increases on both the Town and School side of the budget have contributed to an unforeseen need for an override of almost $10 million. The importance of its passage or failure makes this one of the most consequential local elections in a generation. That’s why the discussion of this “hot topic” was intense and reaching a consensus is a work in progress.
What’s an operational override?
In Massachusetts, an operational override is a voter-approved measure that increases property taxes beyond the state-imposed levy limit. The state-imposed levy limit is normally capped at 2.5% of the previous year’s limit, plus any amount derived from new taxable property development. In Acton, that’s bumped up the cap to about 3% over the past seven years.
An override results in a permanent increase in the levy limit of a community. And an override requires a majority vote at the upcoming Acton Town Election. The town is in the process of preparing two budgets: An “A” budget, if the override passes, and a “B” budget, if the override fails. Depending on the outcome of the April 30 town ballot question, the appropriate budget will be presented at Town Meeting.
What’s the background of this override?
According to an article by Tom Beals (Lessons from History: Acton’s 2005 Override), health care costs for both Town and School personnel were a major factor in budget shortfalls. He wrote, “Acton and the AB Regional School District self-insure through a Health Insurance Trust (HIT). The HIT, like commercial insurance companies, buys re-insurance to cover rare large claims. The collective number of insured people is large enough that in past years, claims history has been an adequate predictor of future costs.”
However, Finance Committee member Steve Noone reviewed health care costs in November and evaluated several factors that have led to unanticipated expenses. Beals wrote, “There was reduced health care utilization during the Covid pandemic, followed by a post-pandemic surge; and, after years of relatively stable prices, the recent increased inflation continues to raise medical costs.”
Advances in medical biology have produced astounding treatments, but those treatments have unprecedented costs. Beals added, “The HIT has had large claims that have not been completely covered by reinsurance. Although alternatives for medical coverage of Acton and the Acton-Boxborough Schools employees are being explored, the present costs must be handled in the current and next fiscal years and that may require higher costs for covered personnel.”
What happens if the override passes?
To ensure that the Boards work together to come to a consensus as to the best budget plan to present and recommend at the Annual Town Meeting, David Martin, a member of the Select Board and the ALG, presented a proposal for an “A” budget – one that would be presented to Town Meeting if the override for about $9.8 million (slightly over 10% increase to the levy limit) passes at the Town Election.
Nevertheless, he recommended cutting the Town’s budget by $1 million less than a level-services budget as well as cutting the School’s budget by $2 million less than a level-services budget.
Martin said, “These would be painful, but not harmful, cuts.”
Christi Andersen, Chair of the Finance Committee, said, “We need to see the numbers.” She added, “We’ve seen the impact of cuts on the School side; they are staff cuts. But this is the time to be clear about the impact of cuts on the Town side.”
The tax impact on the average home would be $1,395. Jason Cole, Vice Chair of the Finance Committee, said, “That’s still too high.”
What happens if the override fails?
Tori Campbell, a member of the Acton-Boxborough Regional School Committee, said, “David’s proposal is a good starting point.” But to show people the choice they were facing, she said, they need to also know what would be cut in the “B” budget.
Campbell added, “There are two questions that we need to answer: What do we value in education, and how much are we willing to pay?”
Campbell shared some research that she’d conducted on school quality and home value. She said, “Since regionalization in 2015, our district has consistently been among the top in the state…And all this as a per-pupil spending rate that is near or below the state average. Our schools are efficient, and they make a difference in our students’ lives.”
As shown in the graphic below, over the last several years, inflation as measured by the Consumer Price Index has outpaced the 2.5% tax increase limit, contributing to the town’s financial distress.
Note: The dates shown in the graphic reflect the fiscal year, rather than the date of the vote. The 2005 override (for the FY 2006 budget) was an 8.5% increase in the property tax levy limit and the 2003 override (for FY 2004) was a 7.9% increase.
Campbell then dug into the idea of schools providing value to communities. She said, “I looked at median home value in Acton compared to Massachusetts overall. Our rate of increase in median home value since regionalization has outpaced the state average. Both town and schools do a great job: Acton is a community people want to live in.”
Campbell concluded, “We all recognize that finding the right amount to propose to voters is critical to the success of our efforts. I think our next best move is to aggressively gather information about what is important to our residents.”
Reached for comment after the Acton Leadership Group meeting, Mike Balulescu, President of the teacher’s union, Acton Boxborough Education Association (ABEA) said, “If an override isn’t passed, it would be disastrous. The town would need to cut close to seventy teachers, increase class sizes well beyond any recommended limits, and possibly close an elementary school. Our teachers are anxious and scared about what could happen to our schools and our students without enough community support.”
Balulescu added that teachers are already working with fewer resources after two years of budget cuts while trying to support increasingly complex and challenging student needs.
When is the Acton town election?
The Annual Town Election is held on the Tuesday immediately preceding the first Monday in May of each year. Thus this year, the election is on Tuesday, April 30, 2024.
Acton held nine Proposition 2 1/2 override votes between 1989 and 2005, however, there hasn’t been one in 19 years. The overrides passed in 1989, 1990, and 1991, failed in 1993 (twice), 1994, and 1999, and passed in 2003 and 2005.
Although past performance is no guarantee of future results, many of the previous override votes were close, and this year is not likely to be an exception. The outcome could go either way; the Acton Leadership Group meeting was intense and reaching a consensus is still a work in progress.
In fact, the only thing everyone at the ALG meeting could agree on was the need to gather more information and start the process of reaching out to others in the community about what promises to be one of the most consequential local elections in a generation.
Greg Jarboe is a former editor at the Acton Minute Man newspaper and a former chair of the Acton Select Board.
