How did Methuen manage to hold line on taxes?

By: Mayor Bill Manzi – April 2012

The Boston Globe recently published a story on the municipal finance system that detailed the fact that Methuen, on a percentage basis, was tied for first in the State (with Woburn) for being the highest (on a percentage basis) amount below the Proposition 2.5 levy limit. The data was culled from the end of my Mayoral term, and is reflective of my Administration’s strong record of conservative fiscal management. In dollar terms these numbers reflect a savings of $4.4 million for the property tax payers of Methuen, a full 6.43% below the maximum levy.

The story is reflective of the real problems facing municipalities, and the further dependence on the residential property tax that is reflected in some of the statewide numbers. From the Globe:

“Statewide, 75 percent of the 351 communities in Massachusetts are collecting the maximum amount possible in property taxes, up from 67 percent in 2007, the start of the recession. Cuts to state aid and other forms of local revenue have forced cities and towns to rely more heavily on property taxes to make ends meet. Last fiscal year, property taxes rose to 56.5 percent of total local revenues, the highest level in three decades.”

As is obvious from the numbers, municipalities, due to escalating fixed costs, steep cuts in state aid, and normal cost escalation, find themselves using the maximum levy available under Proposition 2.5, creating political problems, including stakeholders fighting over a shrinking economic pie.

How did Methuen manage to hold the line on taxes? Good management is about making choices, and we certainly made some difficult ones during my tenure as Mayor. But those choices also involve making necessary investments to protect the community, providing the services that make our community the desirable place to live that it is.

We have achieved the strong financial results for taxpayers while making those necessary investments. We produced a finance plan for our High School expansion/renovation that does NOT ask for a debt exclusion or Prop 2.5 override. At $100 million I am not aware of any other project in Massachusetts that can make the same claim. Our results, when the High School project is factored in, are even more impressive.

My tenure also protected vital public services. I managed to successfully complete over 30 collective bargaining agreements that protected employment, especially within the public safety sector. We had no public safety layoffs during my tenure as Mayor, nor did we have layoffs in any other sector. We also negotiated six separate single year health care agreements with our Section 19 Health Care Coalition that produced huge savings for both our employees and taxpayers. My Administration managed these health care successes without having the benefit of the new Health Care Reform Act until my final months in office. Despite our staying local rather than migrating to the GIC we managed to change the local plan design, through collective bargaining, to bring savings to the system.

Despite my emphasis on public safety and managing to keep those resources in place for our citizens we managed to maintain vital services for our seniors, to maintain the accreditation for Nevins Library, and to make vital and necessary investments in our infrastructure.

Each community is different, but it is becoming increasingly difficult to maintain services without asking property tax payers to pay more in local taxes. I am very proud of our record of fiscal stewardship that is reflected in the Boston Globe story.

Good managers make hard choices, and at the local level those choices can bring down political difficulties on the manager making them. But managers willing to stay the course and negotiate difficult political waters can still produce great results.

I am proud of the record we compiled in Methuen over the past six years!

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