By William A. White Jr., Alderman-at-Large, Board President

(The opinions and views expressed in the commentaries of The Somerville Times belong solely to the authors of those commentaries and do not reflect the views or opinions of The Somerville Times, its staff or publishers)

I want to thank The Somerville Times for inviting me to comment on the upcoming City Budget process before the Board of Aldermen. There are two important “firsts” taking place with this process.  For the first time in the history of the City, the Mayor has submitted a budget to the Board of Aldermen in excess of $200,000,000.  After the current budget of $195,042,998, the Mayor is seeking $203,105,619 for next year.  The other is that for the first time in recent memory, there are five new aldermen out of eleven who will be participating in the review of this budget.  As Board President, I asked the Chair of the Finance Committee, Aldermen Lafuente, to extend the budget meetings over more evenings than had been done recently to give aldermen, especially our new members, more time to question the important departments.  During the past few years, incumbent aldermen had become quite familiar with the operation and funding needs of the various city departments. As a result, the budget schedule had become a bit compressed. My hope is that these new members on the Board of Aldermen in combination with its veterans will conduct a vigorous process that poses serious questions about spending and taxes.

I am writing this just after having received the budget, which is a 271 page document, at the Mayor’s budget presentation last Thursday before the Board of Aldermen. After reading through the budget, I would like to point out some items that I believe the Board will likely find particularly worthy of serious discussion. The first is that the proposed budget calls for an overall increase in property taxes of almost 6%.  If that is implemented, it will mean that property taxes will have increased by 20% over a three year period. And depending on how each taxpayer’s house has increased in value, some taxpayers could see more than a 20% increase while others could have less of an increase.

The issue of increased property taxes, needless to say, generates tremendous debate.  The new growth from construction of new buildings and renovations to existing homes in Somerville has allowed the City to increase property taxes beyond the Proposition 2 1/2 limit for a number of years.  Some property owners are able to pass these tax increases onto rents so the tenants end up bearing the cost.   But for those homeowners or tenants whose incomes are not growing, rising property taxes cut into their disposable income.  This can especially impact those folks on fixed incomes.  Others say that this increase in taxes to fund government has created new programs and an image that promotes Somerville’s reputation as a vibrant community.

As one alderman, I view property taxes; city spending; the creation of affordable housing, especially for families and seniors; and the protection of our current residents as key components of an overall package of important decisions we must face.  Our objective should be to keep Somerville a diverse community where folks can stay for the long-term and not a transient city that benefits developers, real estate speculators, and absentee landlords.  With that in mind, I do have good news. Mayor Curtatone and I appeared at the State House last Thursday before the Legislative Committee hearing our City’s Home Rule Petition to increase the residential exemption to 35%. Based on the comments that were made at the hearing, I have a good feeling that the legislature will approve it and our residents will see relief.

A second area for discussion is an increase in spending for our schools.  Almost $4million of the $8 Million increase in the budget is for the School Department.  I must admit that I am biased in favor of this increased spending.  In fact, this commitment to our schools appears to be paying off as our student enrollment is rising.   At the same time, the State will charge us $1 million more than last year for charter school payments and this hits our budget.

A third area for discussion is an increase of about $1 million in debt service to $10,655,954.  It is my understanding that this is for debt already issued, so nothing can be done for this upcoming year.  It should, however, be a focal point for the Board to discuss future bond plans and the impact of this debt service on future budgets.

As we review the budget, I think that we do have to keep in mind that Somerville has benefitted tremendously from a hot real estate market that very few other communities have experienced.  We have to ask ourselves what happens when the next recession hits this country.   A few days ago, the United States Department of Commerce latest estimate for the US economy found that economic growth had actually contracted by 1% in the first three months of this year.  To me, this is a warning flag.  Perhaps Somerville could be insulated from a recession if our hot real estate market continues. But if it doesn’t continue, then Proposition 2 1/2 would limit our future budgets. And if state aid is further cut, as has happened in the past, we would face reduced revenue. Too much debt service at that point could severely impact our budget and overall financial health.

I look forward to the Board’s debate and want to remind everyone that the Board of Aldermen will hold its public hearing on the proposed budget on Thursday, June 19 at 6:30 p.m. in the Aldermanic Chambers at City Hall.