Sunday, March 31, 2019

Fiscal Responsibility versus Austerity in Groton

The North Stonington Road Bridge... at least what used to be.
You go to a nice restaurant and you order a fancy meal that costs $24.17. The food comes out, but it's a little slow to get to your table. Your silverware isn't quite clean. The vegetables are okay, but clearly not fresh, probably frozen. Your experience is not terrible, but it's mediocre.

The vegetables were frozen because that cost a little less than fresh. They laid off the more experienced dishwasher and hired a less expensive one to save money. They are also short one guy in the kitchen, again to save money, and that's why your food was slow.

They made the cuts so they could reduce their prices. Had they not done so, the price would have been $24.74.

I suspect that if you were given the choice of the $24.17 mediocre experience or the $24.74 excellent experience, you'd pick the excellent one.

One Town's Fiscal Choice

That is the choice that the town of Groton, Connecticut faces in this year's budget cycle. The current intention is to hold the mill rate the same as last year's at 24.17. (The mill rate is the rate per thousand that a property owner pays in taxes.)

But there is a cost to this conservation:

  • $1.5 million will be drawn from the general fund
  • The North Stonington Road Bridge will not be repaired
  • The Bill Memorial Library and Mystic & Noank Library will be cut, and, in later year, be completely unsupported by the town
  • The new community center will continue to have unusable water and a leaky roof.

A Town In Decline

A sign of decline.
When a movie director is trying to show that the world the story takes place in is in decline, they will show broken things. They will show the once nice things that the society could not longer afford to maintain. "We have to take the stairs. This building used to have an elevator, but it broke years ago and no one can fix it." OR "We'll have to go the long way around. There used to be a bridge, but it was washed out in a storm years ago and we can't afford to fix it."

Every "Bridge Out" sign, every closed library, every "park closed" sign is a monument to the decline of a community. It is a celebration of past greatness and present failure.

For Groton to fail to repair it's bridge, to underfund the libraries, to not have a properly maintained community center, it is saying "we used to have nice things, but we can no longer afford them."

That is a town in decline. Perhaps the town really is so poor that austerity is the only option, and visible decline the necessary cost of this, but I'm not sure everyone would agree.

Austerity Versus Investment

The cost to fund the libraries is 0.1% of the total town budget, so let's focus more on the larger maintenance issues.

The argument for holding the mill rate level is that a half mill increase this year could lead to one the next year and the year after that. After 20 years, the mill rate goes from 24 to 34, and that's not a good thing.

This sidewalk on 184 has been closed for some time.
On the other hand, Groton has a bridge out, an unusable sidewalk, etc. If the mill rate is held level at the cost of failing to fix our infrastructure as it wears out, then there is another danger. What if the mill rate stays the same but the number of highly visible infrastructure failures increases by one every year. Twenty years from now, you'd have a low tax rate and 20 unusable bridges and sidewalks and parks throughout the town.

When you have 20 "bridge out" and "park closed" signs around town, people notice. Home buyers notice. Property values fall. Tax revenues fall. Mill rates must be increased to compensate.

Under austerity, you still have to raise the mill rate and you end up with a town full of signs of neglect and decay.

What's the Cost

One mill point converts to $3,686,117 of revenue. The proposed cut to the library is about $38,000. Other cuts to agencies which provide services to Groton residents come to about $30,000. Groton's share of repairing the North Stonington Road Bridge would be $300,000. Substantial improvements could be made to the community center for $250,000.

The total cost to fully staff the kitchen, to use our example above, would be $618,000 or 0.17 mills. If we want to do it without taking money from the general fund balance, it would be 0.57 mills.

$550,000 of this would be one time capital costs. $1,500,000 would remain in the general fund to use in future years when we have harder times. Only $68,000 of this is recurring budget items.

For an owner of an average $200,000 house, the property tax based on these rates would be:

Austerity: $4,834
Fully Funded: $4,868
Fully Funded without using town savings: $4,948

Under the proposed austerity, defunding the libraries, the supporting agencies, failing to repair a failed bridge, and leaving the community center in need to improvements, the average homeowner would save $114 per year.

One hundred and fourteen dollars. To the average family.

There is a line between fiscal responsibility and dangerous austerity. I think we can see where that line is.

What You Can Do

The Town Council of Groton is a group of tremendously hard working and dedicated volunteers. They work with the best interests of the town in mind and want to be accountable to the taxpayers. They are pushing down this path of austerity because that is what they believe that the residents want. The loudest cries they hear are from those who want taxes cut no matter what the cost, and if that is what you want then you are being heard.

On the other hand, if you would like to see the bridges fixed, the community center improved to the level a town like Groton deserves, the libraries and agencies funded to provide great services to you and your neighbors and you understand it may cost a few dollars more in taxes to get these benefits, please contact you Town Councilors and let them know that you believe that 0.57 mills is a small price to keep all the nice things in Groton.

Their contact information can be found here.

Closing Thought on Outside Agencies

The Mystic & Noank Library, the Bill Memorial Library, and other organizations called "outside agencies" are being cut by 25%. The argument is that the money should stay in the town. This is misguided argument.

The two association libraries cost the town a mere $125,000 combined and offer tremendous services funded by donors, other towns, and a variety of other sources. Groton receives millions of dollars of value for tens of thousands of dollars of expense.

These so called outside agencies are simply agencies that are not operated by the town but provide town services. The town gives them money because the services they provide would be profoundly more expensive for the town to provide internally.

When a cut of $100,000 of expense runs the risk of losing $1,000,000 of value, it should be very closely considered. This money does not leave the town. It stays in the town and it brings friends.

Michael Whitehouse is member of the Representative Town Meeting representing the 4th District of Groton, Connecticut.

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