Belmont voters have lots of questions about the override. We’ve taken the opportunity to pull together some of the most commonly asked questions and answers. Feel free to share these with your friends and neighbors.
About the override
What are we voting YES for?
You are voting to approve a ballot measure in the April 2021 Belmont town election asking voters for permission to raise property taxes above the 2.5% ceiling imposed by Massachusetts’ Proposition 2 ½. By law, increases above the 2.5% cap must be approved by a majority of voters.
What is an “override” anyway?
In Massachusetts, Prop 2 ½, passed in 1980, mandates that the total tax levy for a town can only be augmented by 2.5% per year, but it also recognizes that towns will sometimes need more than this, and therefore provides towns a tool to raise taxes beyond this levy. This tool is called an override. An override raises the town’s total tax levy by the amount voted upon, thus permanently raising the total tax amount which can be increased by 2.5% per year.
What services will be extended if the override passes?
The budget with an override allows the town to avoid drastic cuts in services across town departments. It also provides seniors and students with the services they deserve, including social workers, special education chairs, and prudent incremental additional positions in the schools to accommodate the seventh school coming on board in 2023.
What will happen if the override does not pass?
If the override question fails to win a majority of votes in the April town election, the Town will not be able to raise property taxes above 2.5% on the current tax levy. Given the Town’s structural budget deficit, the problems will not go away, so we would need a larger, more expensive override in a year’s time. In the meantime, the Town leadership will be forced to make cuts in town services for the 2021 fiscal year. In the first year alone, we would have 21 fewer teachers and school staff positions, which will present challenges for resuming normal education and making up for losses following the pandemic, class sizes would grow, and there would be major cuts in support to school athletics, music, and theater programs. The town would lose a firefighter, building inspector, police officer and DPW workers, occasioning possible delays in services and maintenance. Library hours and programs would be reduced, and recreation opportunities diminished. If a second override in a year’s time were to fail, cuts would be even deeper.
Can’t we wait to do this until the economy improves?
We have already stretched the last override, passed in 2015, three years longer than it was designed to last. Postponing this override will only deepen Belmont’s structural deficit, requiring us to seek an even larger override (approximately $11m compared with $6.4m) a year from now. The longer we wait, the bigger the deficit will be and the deeper the cuts in Town services.
The Town has free cash. Why not use that to avoid cuts?
If Town Meeting votes to do so, Belmont can use its available reserves of free cash to cover some of our budget gap for this fiscal year. However, that is a one-time fix and to do so we must drain the town’s savings. That may threaten our AAA bond rating, which has already saved Belmont taxpayers millions of dollars in borrowing costs on the 7-12 School Project. Once a AAA bond rating is lost, it’s very hard to restore it. If we failed to pass an override, our rating could drop. In even the fairly near term, the loss of this rating could increase costs to the town significantly.
Why are our expenses growing so fast?
Across all town departments, inflation rates for many costs have repeatedly exceeded 2.5% per year. In addition, our schools have faced a historic enrollment surge. Since the “Town of Homes” is dependent on property taxes for almost all of our revenue, this creates a structural deficit.
How much more will I pay in taxes if the override passes?
The amount of your tax increase will depend on the assessed value of your home. Here are some rough guidelines for how much the override will cost homeowners.
Assessed Home Value |——–| Tax Increase
$500,000 —————————–> $335 annually ($6.44/week)
$1,000,000 —————————> $670 annually ($12.88/week)
$1,326,300 —————————> $888 annually ($17.07/week)
$1,500,000 —————————> $1,005 annually ($19.33 a week)
My property taxes just went up. Why?
The increases in your property taxes in the past year are because of the debt exclusion the town passed to build the 7-12 school. Debt exclusions are used to pay off the debt the town issued (like a home mortgage) to build the new 7-12 school. When the 7-12 school is paid for, that obligation will cease and our property taxes will drop.
Didn’t we just vote for an override? Why are we doing this again?
Belmont last passed an override six years ago, in 2015. In the lifetime of a graduating Belmont High School senior today, Belmont has passed that one override, for $4.5 million. At the time, it was predicted to last three years before another would be needed. Our Town leadership has stretched it to almost six years. However, Belmont’s finances have not changed much in recent decades. 95% of the Town’s operating income still comes from property taxes raised on homes and commercial properties. The growth of that revenue is capped at 2.5% annually by Proposition 2 ½. However, everything we pay for with that revenue goes up by more than 2.5 % annually. With little room in Belmont for large scale commercial developments, we need to periodically raise taxes to keep up with inflation and need.
When is an override necessary?
An override becomes necessary when expenses systematically outstrip revenues, a situation referred to as a “structural deficit.” You can learn more about this from the Warrant Committee Presentation here: https://www.belmont-ma.gov/sites/g/files/vyhlif2801/f/uploads/wc_12-9-2020_forum_overview_final.pdf
Why does Belmont face a structural deficit
The causes of structural deficits are manifold, but include the fact that the rate of inflation for many budget items is often well over 2.5%, and other expenses may increase at higher rates due to increased needs (e.g. more students in school, more students in state mandated services, etc). With a revenue base that is mostly derived from property taxes, Belmont does not have many ways to generate new revenue to address budget deficits without overrides.
Why do we need new school positions now?
Belmont is at an important crossroads in the education of its children. The citizenry overwhelmingly supported a debt exclusion to build a new, six-grade, middle and high school. With the 9-12 wing of that school scheduled to open in the fall of 2021, we now need to attend to important gaps in personnel. For instance, there is no social worker at the high school. That must be addressed. Special education teachers spend precious time they should be spending with students completing compliance paperwork: we need special education team chairs at each school to make sure that special education is delivered efficiently and in keeping with student needs. As we move from a district with six schools (four elementary schools, a middle school and a high school) to a district with seven schools (four K-3 schools, one 4-6 school, one 7-8 school and a high school), we will also need a new principal.
When was the last override passed?
Our last operating expenditures override was in 2015. It was supposed to last 3 years, and we stretched it to 6.
How often does Belmont pass overrides?
It’s not just how many we pass but for how much. Since Proposition 2 1/2 became law in 1980, Belmont has passed just 4 overrides totaling $12 million. In the lifetime of a graduating Belmont High senior today, there has only been one override passed in 2015.
How does our history of passing overrides compare with other towns?
Peer towns have levied more taxes through overrides: Arlington has passed three overrides totaling almost $18 million ($17,990,000). In that same time, Winchester has passed three overrides totaling $15,897,000; Lexington has passed 9 overrides totaling $12,705,858; Wellesley has passed seven overrides totaling $17,252,917. Most of these towns also have more commercial revenue, making these numbers even more striking.
How does Belmont’s property tax compare with other towns?
Belmont’s property tax rates are well below the median property tax rate per $1,000 of assessed value (in other words: an “apples to apples” comparison with other towns). According to the Massachusetts Department of Local Services, Belmont’s residential tax rate for 2020 was $11.00, making Belmont 298th out of 352 Belmont towns, putting it in the lowest 15% for tax rates by assessed value. Peer towns all have equal or higher residential property tax rates per $1000 of assessed value. Arlington’s 2020 rate was $11.06 per $1000; Waltham’s was $11.95; Watertown’s was $12.14; Winchester’s was $12.39; Lexington’s was $14.05.
How are property tax rates calculated?
Belmont’s tax levy is what the Town raises from property taxes. To calculate the tax rate, the town divides the total levy by the taxable value of the town. So, for instance, if the total value of the town were $10 million and the levy limit were $100,000, then the tax rate would be $10 per thousand taxed. Levy limits and assessments are overseen by the Commonwealth Department of Revenue. The town cannot change them at whim. Even if your assessed value goes up, it does not mean your taxes will increase more than 2.5%, because the levy limit is set and can only increase 2.5% per year without an override. New growth (including renovations) can also add to the levy, but our town does not have much space for new growth.
I heard that Belmont has some of the highest taxes in Massachusetts. Is that true?
Belmont’s property tax rate is very low compared with other Bay State communities – in fact, ours is in the lowest fifth of communities. Belmont’s homes are, however, very valuable. The average home price in Belmont is now $1.3 million. Home values have only increased in town the last five years. That means Belmont home owners might still pay what seems like “high taxes.” A low tax rate applied to a very valuable item might still result in what seems like a big bill.