Article 3 of the Spring Town Meeting warrant is the big kahuna. Here, on six pages, are the details of how much the town wants to spend next fiscal year for town services, schools, municipal employee benefits, and debt.
At a whopping $33.7 million, it’s the largest budget in town history. But its total exceeds the amount of revenue the town expects to collect in fiscal 2021, so it arrives at Town Meeting with a $317,239 deficit.
Question 1 on this year’s Town Election ballot offers one solution by asking taxpayers to pass a general override that would increase taxes by $320,000, an amount that would balance the budget. (For fiscal 2021 budget details, see Article 3, Omnibus Budget, in the Warrant in Plain English.)
Town Meeting attendees must first decide whether to accept or reject Article 3, which requires a two-thirds vote this year. The Finance Committee and Select Board—and members of the Budget Working Group—recommend its passage. But a vote for the budget is a vote for the deficit, which state law says must be eliminated. That’s the purpose of Question 1.
Question 1 has the backing of FinCom, the Select Board, and the recently formed Budget Working Group, which have all recommended its passage. A general tax override is an increase in taxes on property and new construction beyond the annual increase allowed by Proposition 2½. (Members of the working group argue their case in a Consider This column.) A general tax override requires a majority vote at Town Election, and would add an estimated $156 to the fiscal 2021 tax bill of the owner of a $600,000 home.
Worth Robbins of Mass. Ave., a former member of the School Committee and co-owner of the Harvard Press, argues that the town should pay for the deficit with fiscal 2019 free cash. Robbins proposes that Town Meeting vote to rescind the transfer of $1.2 million in free cash to the capital fund that it approved at Special Town Meeting in October 2019 and use some of that money to pay for the deficit, while setting aside the balance to pay for the expected shortfall in revenue this fall. Robbins told the Press he had emailed his proposal to key town officials as well as approximately 950 residents, and had heard from 100 recipients. (Robbins argues his case in a Consider This column.)
Town Administrator Tim Bragan told the Press in a recent interview that the vote cannot be rescinded, a claim likely to be challenged on the floor of Town Meeting. “There is no article on [the warrant] to do that,” Bragan said. “You can’t [rescind the transfer of free cash to the capital fund] under the budget article because what he’s talking about doing is rescinding a vote that was taken at a prior town meeting. That town meeting has ended. It’s not open. It’s not tabled. [There’s] nothing to take off the table. There is no article to deal with that.”
Passage of the fiscal 2021 budget in its current form, then, requires two votes. First, attendees must approve Article 3, the Omnibus Budget, by a two-thirds majority at Town Meeting this Saturday. While that approval is a necessary step, it is not sufficient. To pay for the budget, a majority must also vote for Question 1 at Town Election. If either vote fails, the budget fails, but the consequences differ.
Suppose Article 3 fails to pass at Town Meeting. State law requires that in the absence of an approved budget the town must shift to a monthly budget equal to one-twelfth the current fiscal 2020 budget, beginning in July and lasting until a new budget is approved. The Select Board is prepared for that possibility. On Tuesday night it approved a one-twelfth budget of $3,844,684, which it will now submit to the state. If the budget fails and the Department of Revenue approves, Harvard can begin spending at that rate July 1.
However, in the event of a budget failure, Town Meeting would need to quickly convene again in July or August to pass a balanced fiscal 2021 budget, Bragan told the Press this week. That’s because a $2 million debt payment on the new school comes due in August, he said, and a one-twelfth fiscal 2020 budget won’t be enough to cover it.
What happens if Article 3 passes, but Question 1 fails? In this instance the town has more leeway and can wait for Fall Town Meeting to pass a new budget, Bragan says. To deal with the lost override, the town would simply refrain from spending on any line item tagged to be cut by the budget group. By Fall Town Meeting, the Select Board will have a better understanding of how much state aid and local revenue it can expect in fiscal 2021 and can present a budget that reflects the new reality of a post-COVID world. (See our override FAQ.)
That new world is filled with uncertainty. The fiscal 2021 budget was approved by the Select Board just days before Massachusetts and the town declared a state of emergency to deal with the COVID-19 pandemic sweeping the commonwealth. With state revenues expected to drop dramatically in coming weeks, no one believes today that state and local income next year will come close to the $33.5 million forecast by the Finance Department in late March. Whatever happens at Town Meeting Saturday, additional cuts to the budget as deep as $500,000 to $800,000 seem inevitable.
In their support for an override, town officials say it’s a question of cutting now, or cutting later. Their preference is to cut later. If the override passes, as they hope, the town would have two tiers of cuts available. The first would consist of the $320,000 in cuts that have already been identified in case the override fails, and the second would consist of an additional $500,000 in cuts and other sources of funding identified by the budget group. (For details see the Consider This column.) With passage of the override, say budget group members, the town would have both tiers available to adjust to circumstances this fall.
For additional information
To better explain the complexities of this year’s budget and implications of passage or failure of Article 3 and Question 1, the Press has prepared several sidebars to accompany this article. These include a timeline of actions taken by town boards to arrive at this year’s budget request; a history of overrides in Harvard from 1989 to the present; a Q&A regarding the override; and a tax tale that explains some of the common factors that drive up property taxes.
For details of fiscal 2021 spending by category, as proposed by the Finance Committee and Select Board, please refer to pages 34-39 of the Town Meeting booklet. Details of the revenue forecast on which it is based can be found on page 14.