FY2009 Budget FAQ
During our recent budget forums, several questions have been raised about the override; some of the Frequently Asked Questions are addressed here.
To learn more about the different budget scenarios and the anticipated reductions for the non-override and Question 1A override budgets, please review the Budget Presentation or the Budget Quick Facts.
Questions
- How does the election process work with two override questions on the same ballot?
- What will the impact of the override be on my property taxes?
- What if Sudbury receives more state aid than had been anticipated when the budget is voted at Town Meeting?
- Why is there a gap between projected revenues and expenses?
- Why does it seem that the tax increases have been higher in Sudbury than in other towns?
- What can Sudbury do to increase its commercial tax base?
- Why is revenue projected to be lower for next year?
- What is Sudbury doing about the structural deficit situation, as it appears that we will continue to face the need for an override every year?
- Why do the costs of school services increase 4% to 5% each year?
- What can be done about the increases in staff salaries and benefits?
- Can't the schools just do more "belt-tightening" and find extraneous areas to cut expenses?
- Why would teaching positions need to be eliminated: why not cut other positions?
- Why does the reduction of a few teaching positions make such a difference in class size?
- What are the class size guidelines?
- Are the children of staff members who do not reside in Sudbury allowed to attend Sudbury Public Schools?
Answers
- How does the election process work with two override questions on the same ballot?
The Board of Selectmen has voted to place two override ballot questions on the ballot for the March 31 Town Election. Question 1A provides for an override of $1,821,200, of which $838,175 comes to SPS. Question 1B provides for an override of $2,821,200, of which $1,326,743 is allocated to SPS.
Each Question is considered independently. Thus, it is recommended that you vote on both Question 1A and Question 1B. A vote for the higher override amount will not be counted as a vote for the lower override amount. A "yes" vote for both is NOT cumulative and does not result in a $4.6M override. If both override questions have the support of a majority, only the higher dollar amount will prevail. Any override supported by a majority at the Town Election must also pass by a majority at Town Meeting, which starts on April 7th. In sum:
If you support: Question 1A Question 1B The Question 1B $2.8M Override Budget (and the $1.8M override in the event the $2.8M override does not pass) Vote Yes Vote Yes The Question 1A $1.8M Override Budget only Vote Yes Vote No A Non-override Budget Vote No Vote No
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- What will the impact of the override be on my property taxes?
In the absence of an override, residential property taxes will increase an estimated $444 on the average valued home of $683,800. This 4.6% increase is comprised of the 3.2% permitted under Proposition 2 _, including new growth, and a 1.4% increase due to an increase in the net payments on debt resulting from a decrease in state reimbursement for next year.
The estimated impact of Question 1A is an additional $294 on the average home assessed at $683,800 (or $0.43 per $1,000 assessed value).
The estimated impact of Question 1B is an additional $455 on the average home assessed at $683,800 (or $0.66 per $1,000 assessed value). The Question 1B override would cost $161 more than the Question 1A override for the average taxpayer.
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- What if Sudbury receives more state aid than had been anticipated when the budget is voted at Town Meeting?
When Sudbury votes at the Town Election and at Town Meeting, the amount of state aid we will receive next year will not be known. The State legislature typically votes on the budget in June or July. Thus, the Sudbury budget is based on an estimate for state aid. When the Town of Sudbury votes on a budget, the spending amount is appropriated by the Town vote and no higher amount can be spent. Additional money received from the state cannot be spent in that fiscal year as the Town has not voted to spend that amount. One possible result is that any additional money that comes to Sudbury will be held and carried over as "free cash" that can be spent in a later fiscal year. Another possibility is that any excess might be set aside in a special fund to be saved for later years. In either event, the revenue would be available to help pay for future expenses or offset local tax revenues, reducing the amount needed for future overrides. Other possibilities include mechanisms that could lower the residential taxes collected next year. A variety of options would be explored.
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- Why is there a gap between projected revenues and expenses?
Like other municipalities, Sudbury faces a "structural deficit" because the revenues do not increase at the same rate as the expenses needed to offer the same services year-to-year. The costs of our current Town and School services increase about 4% to 5% per year, while our local property tax revenues are limited by Proposition 2 1/2 to a growth rate that averages about 3% when allowed "new growth" revenue is added to the 2 1/2% increase. The primary costs of providing education in every community - staff salaries and benefits, transportation, utilities, and special education - simply grow faster than revenue is allowed to grow under Proposition 2 1/2. The gap between expenses and revenue is larger this year because revenues projected for next year are substantially lower than had been expected.
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- Why does it seem that the tax increases have been higher in Sudbury than in other towns?
While Sudbury residents do pay high residential property taxes, our taxes have not increased at the same rate that taxes have increased in local communities. Since 2001, residential taxes have increased at a faster rate in most similar communities in our region than they have in Sudbury.
Nonetheless, Sudbury has certain characteristics that make our budget situation particularly challenging:
- Sudbury has a very small commercial tax base. Residential property taxes provide our main source of revenue with commercial properties providing only about 8% of our taxes.
- Sudbury does not receive much money from the state compared to most municipalities in the Commonwealth. State aid, which comprises about 10% of our revenue, has declined in real dollars since 2002.
- We have more school age children in Sudbury, relative to our total population, than most other communities in the state. We educate more children per household in Sudbury than in other communities - thus, the costs are spread across fewer property taxpayers.
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- What can Sudbury do to increase its commercial tax base?
Sudbury has a small portion of land zoned for commercial or industrial uses; most parcels are zoned for residential use. In prior years, Sudbury residents rezoned many parcels as residential in an effort to maintain the rural character of the Town. It is difficult for a Town to rezone parcels for commercial use as such action would reduce the value of the parcel. The areas that are zoned for commercial use, primarily along Route 20, tend to have septic systems that have reached their capacity. The ability of businesses to expand in these areas requires a solution such as a local sewer system. The Town has been working for many years to find a parcel of land that would support the treatment facility needed for a sewer system or an alternative waste management system to support the commercial district.
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- Why is revenue projected to be lower for next year?
Revenue generally increases each year, although the rate of increase may vary. The amount of revenue for next year (FY2009) is projected to decrease from the amount available for this year (FY2008).
There are many reasons that Sudbury has less money available for FY2009. Sudbury's "free cash" declined about $1.56 million compared to that available to use this year. "Free cash" is the amount of carryover revenue (the amount left at the end of a fiscal year) that the Department of Revenue determines may be spent the following fiscal year. In recent years, including FY2008, Sudbury relied on a few one-time revenue sources such as previously deferred taxes paid by landowners converting farm land to another property use. These one-time revenue sources increased the free cash available for use in recent years. In addition, the state changed its schedule for processing motor vehicle excise taxes, which meant that some taxes that would have been available for the next fiscal year were pushed off to FY2010. The resulting gap decreased revenue available for FY2009. Furthermore, certain local revenues such as vehicle excise taxes and building permits are projected to be flat or down slightly due to economic factors. Finally, the state has altered the schedule for reimbursement of school construction debt, slowing down the reimbursement schedule, such that the reimbursement used to offset debt will be $866,556 lower for FY2009.
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- What is Sudbury doing about the structural deficit situation, as it appears that we will continue to face the need for an override every year?
As the Finance Committee has concluded, Sudbury cannot maintain quality schools, reliable safety services, and other adequate services within the limits of Proposition 2 1/2. Unless the Town develops additional sources of local revenue or state revenue increases significantly, the Town will not be able to maintain services without ongoing overrides. The particular needs may vary year to year as state aid or other revenues may fluctuate; this year's revenue picture reflects several factors that do not occur every year.
Significant change is needed at the state level. Sudbury residents should continue to press their state representatives for changes in the way educational and municipal services are supported. The Town will continue to pursue efforts to support a larger commercial tax base or more multi-family dwellings. In addition, the Board of Selectmen has created a Budget Review Task Force, comprised of Town committee members and other residents, to focus on long-term measures that may enhance revenues or cost savings.
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- Why do the costs of school services increase 4% to 5% each year?
Education is a labor-intensive service; it is provided by people. About 81% of the total SPS budget is for salaries and benefits. The costs of salaries and benefits rise more rapidly than available revenue. During the last several years, employee benefits costs have gone up 12% to 15%. In some years, the amount of money needed for the benefit increase alone exceeds the amount of additional revenue available under Proposition 2 1/2. The costs for the other primary expense areas for public education - utilities, transportation, and special education - continue to rise faster than revenues. About 94% of the total SPS costs are for compensation and mandated expenses.
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- What can be done about the increases in staff salaries and benefits?
In recent years, the sizeable increase in benefits and insurance costs has been a major concern in both the public and the private sectors. The Town and Schools will continue to look at a variety of ways to reduce these costs. Given the growing costs of compensation, as with all the costs of Town and School services, there will be ongoing analysis within the context of our budget situation and the needs of our District. One of those needs is the ability to recruit and maintain good teachers. One of the reasons Sudbury provides a high-quality education is the quality of its staff members. Education research confirms that the quality and preparation of the teaching staff is directly tied to educational outcomes.
SPS teacher compensation is low relative to peer districts. In fact, according to a study conducted by our town Finance Committee several years ago, SPS salaries were the lowest in our peer group. This finding has been confirmed by more recent data from the Department of Education, which shows that the average SPS teacher salary is lower than in the other school districts in our region and is lower than the state average. DOE salary information is available in the Benchmark Data Report available on the SPS website. An analysis of total compensation including salary and benefits reveals that SPS teachers are on the low end but not necessarily the lowest of all regional districts. The Town of Sudbury does not pay into the teacher retirement program; teachers contribute to this system which is supported by state revenue. The Town of Sudbury does contribute to a retirement system for non-teaching staff.
Teacher compensation is determined by collective bargaining agreements and relevant state laws. The structure and the terms of the agreement result from negotiations that occur in the context of the history of the agreement, market forces that affect compensation including other bargaining units within Sudbury, and legal parameters on the negotiation process.
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- Can't the schools just do more "belt-tightening" and find extraneous areas to cut expenses?
During the last decade, the Sudbury schools have not increased spending adequately to meet the growth in student enrollment or the increases in the real costs of education. In fact, several positions have been eliminated and most expense areas have been reduced. SPS spends less per student per year ($9,851) than many of the nearby districts, including Concord ($14,411), Lincoln ($15,651), Southborough ($10,231), Carlisle ($11,858), Northborough ($9,931), Dover ($13,298), Sherborn ($11,558), Lexington ($12,600), Wayland (12,317), Weston ($16,073), Wellesley ($11,494) and Bedford ($13,495). SPS spends less per student than the State average of $11,211 per student. The Benchmark Data Report available on the SPS website provides additional comparisons.
Not surprisingly, the Finance Committee has concluded that the Town and the Schools run lean, cost-efficient operations, without fat that may be cut to avoid cutting services. They note: "Many cost saving ideas have already been implemented to wring out inefficiencies so, in the short term, it comes down to what services to cut if an override is not approved."
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- Why would teaching positions need to be eliminated: why not cut other positions?
About 73% of the total salary costs for SPS are for teachers. The District cannot significantly cut costs without cutting teachers. Decisions about which positions would be cut involves a balancing of the need to keep class sizes from growing too large with the need for the significant support provided to the students and to the classroom teacher by other staff members (including nurses, guidance counselors, reading tutors, teaching assistants, and curriculum specialists). The services provided by all of our staff members are integral to the quality of the educational services we provide.
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- Why does the reduction of a few teaching positions make such a difference in class size?
Classroom teachers are assigned by grade level and by school. When one teaching position is eliminated, the extra students are not spread across the district but across that grade level within the school. For example, when 5 class sections are reduced to 4 class sections, the resulting class size increase is 25%. While multi-age or multi-grade classes might help even out class sizes, the state-mandated curriculum requirements for each grade level make such groupings more difficult.
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- What are the class size guidelines?
The School Committee has established class size guidelines, which articulate targets for the high end of the average class size for a grade. These are not strict limits. As the student population is not evenly distributed across the grades and schools, there are often individual classes that are over the guideline size. The wide-spread view that lower class sizes enhance student achievement is supported by research, especially at the lower grades, and by our understanding of what happens in the classroom. Our guidelines are very similar to those adopted by comparable school districts, including Wellesley, Wayland, Lincoln, Weston, and Lexington, and to standards used in other states.
The guidelines are: Kindergarten - 20 students, grades 1 and 2 - 22 students, and grades 3 through 8 - 24 students.
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- Are the children of staff members who do not reside in Sudbury allowed to attend Sudbury Public Schools?
School Committee Policy 4.2.4.3 allows children of staff members of SPS and LS to attend our schools. This is a very common practice within school of Massachusetts and is provided for in the state school finance policies.
This policy is design to help in recruiting and retaining quality staff, however it is not used frequently. Like most parents, staff members want their children to attend neighborhood schools whenever possible. In the actual policy it is acknowledged that a sign of confidence and support for our programs and the quality of the educational system is when staff members want their own children to attend the school or district in which they work.
We do not differentiate in the policy between teachers, administrators or support staff. Our culture here is that every staff member is important to contributing to our program and to making us the best system possible. However, in 2007-08, only children of teachers and managers are attending SPS.
To enroll, the employee must request permission in writing to the superintendent's office. The decision is based on space available. That is, permission is granted and the classroom and school placement is determined only after a review of class size and class make-up. Transportation for these students is the responsibility of the parents.
Is there an added cost to this policy? To determine cost is a little complex. Taking the total amount spent per pupil and multiplying that by the number of students of non-resident staff is not really the actual cost to educate the students. If we did not admit these students, we would not save $9,000+ per student to otherwise spend on the remaining students. Because the number of students is relatively small and because we only place them where seats are available and not where the class size guideline is exceeded, there is no significant out-of-pocket cost in this policy. We would spend the same amount on the teachers, staff, utilities, administration, etc. -- the major drivers of the budget. The marginal cost increase is found in things like utilization of books and materials, time a teacher spends with an individual child, etc.
2007-08 Students of SPS & LS staff not living in Sudbury attending our schools:
6 7 8 Total Enrol % Curtis 3 0 3 6 1077 0.6% K 1 2 3 4 5 Haynes 2 1 1 4 426 0.9% Loring 1 1 1 3 578 0.5% Nixon 1 1 1 3 515 0.6% Noyes 1 1 1 3 644 0.5% 19 3240 0.6% Staff from SPS 13 LS 6 Back to the Top