Weston Town Manager Proposes 5% Tax Increase

Weston Town Crier, February 11, 2021
The following was submitted by John Sallay

Weston Town Manager Leon Gaumond recently presented his proposed Fiscal Year 2022 budget to the Select Board and members of the Finance Committee. Overall, for next year he is recommending $101 million total Town spending, up 4.4%. This reflects Weston Public School spending up about 3% and the balance of Town spending up over 5%. Debt service, including the large Town Center projects now underway, is down about 2%.

In some past years, the additional tax revenue from new home construction and expansions covered a large portion of Town budget growth. Now, however, because Town spending is growing more rapidly and “new growth” is projected to be about 1%, a typical Weston homeowner will see a 5% tax increase. This article and the accompanying chart attempt to explain in simple terms how key aspects of town spending ultimately determine your taxes. There is still time to register your opinion with the Select Board, and then attend the Annual Town Meeting in May, where you can vote to approve this budget and proposed tax increase, or not.

Boxes 1-4: Schools

Weston Public Schools represent the largest portion of the Town’s budget, about twice the total of all other Town departments combined. School spending is generally determined by enrollment, the number of children being educated. As the Finance Committee has pointed out, Weston enrollment (Box 1) has declined and is projected to continue declining significantly. Yet, the school budget has continued to increase at about 3% annually.

As a result, Weston’s per-pupil expenditures (Boxes 2 and 3) have increased over 50% over the last 10 years. Our per-pupil expenditures are now almost 30% higher than comparable affluent towns even though school performance metrics are average among this group of towns. The School administration is recommending a 3% increase for next year (Box 4), though it is still unclear how many students who left for private school due to the pandemic will return.

Box 5: Employee Benefits

As the Finance Committee has also noted, about 80% of all town spending relates to people costs – the number of employees, their compensation levels, and the healthcare benefits we provide. Each of these factors exceeds the average levels in comparable affluent towns. Total benefit spending is projected to be up about 10% this year (Box 5), partly reflecting a full resumption of catch-up funding on retiree benefits (OPEB). While healthcare benefits have increased in the 4-5% range for several years, this year’s budget assumes a 3% increase.

Box 6: Town Department Operations

Most of Weston’s departmental spending relates to the Department of Public Works, and the Police and Fire Departments, but also includes the Library, land use and inspectional services, the Council on Aging, and several other smaller departments, totaling $25 million (Box 6). Excluding employee benefits, this year’s departmental budget is up 5%. This includes increased spending on roadway improvements – an additional $600,000, on top of the steady state maintenance level of $1.2 million, reflecting the Select Board’s program to get all Weston roads up to a 70% rating (against our current 75% average).

Box 7: Debt Service

Weston’s debt and unfunded employee healthcare and retirement liabilities well exceed $200 million, with the debt portion totaling about $100 million. Even though the Town recently made significant new commitments to the Town Center Improvement Project, the Weston Art & Innovation Center, and the Josiah Smith Tavern, total debt service of about $10 million will decline about 2% this year (Box 7). This reflects the completed amortization of some large projects undertaken over 20 years ago, and the recent new debt funding at a favorable 1.2% rate.

Boxes 8-10: Total Spending and Tax Levy

So, total proposed Weston FY2022 spending will exceed $100 million (Box 8) for the first time, up 4.4%, and up nearly 40% versus 10 years ago. Revenues other than property taxes (Box 9), include state aid, excise taxes, permit fees, and carryovers from prior years. These are projected at about $13 million, down about 5%. As a result, the required total property tax levy (Box 10) is about $88 million, up 6% versus this year.

Regardless of how much we spend, it is not possible for Weston to “run out of money”. When we spend more, we simply increase our property taxes to cover the increased spending. Proposition 2½ was enacted in 1980 to limit the growth of property taxes in Massachusetts to 2½% plus the amount of new growth, with some exceptions. At this point, Prop 2½ is not a meaningful spending constraint for Weston because our built-up “excess levy capacity” is now about 12% of our annual budget, due to votes to exclude nearly all debt, some years of above average new growth, and other factors.

Boxes 11-14: Your Property Taxes

Weston’s total assessed property value is approximately $6.5 billion (Box 11). So, the property tax rate needed to cover this property tax levy in FY2022 is estimated at 13.54 (Box 12), or $13.54 of every $1,000 of assessed value. A hypothetical home valued at $1 million would see a tax bill of $13,540, plus 3% for the Community Preservation Act surtax, or $13,950. For the median home assessed at $1.29 million, that is about $18,000, and for the average home assessed at $1.63 million it is nearly $23,000. With total assessed property values estimated to increase at 1.5% (Box 11) and new growth at 0.9% (Box 14), the typical existing home could expect a 0.6% increase in assessed value (Box 13).

In other words, with your typical assessed value up 0.6% and the property tax rate up 4.3% (Box 12), the typical Weston property tax bill would be up about 5%.