Inside Stories

InsideDracut: Banging the Tax Drums Slowly

I wrote last week about Dracut’s fiscal house not being as sturdy as some had proclaimed during election season, and how Town Manager Ann Vandal wasn’t alone in banging the drums about an upcoming fiscal disaster. Other town officials are echoing a similar warnings, sounding an alarm that our budget woes do not end with FY2025.

Rich Cowan, an outspoken member of the town Finance Committee and an advocate for increased revenues, recently penned an opinion piece on his Civic Watch Facebook page espousing the overwhelming need for higher taxes. Warning that the budget cannot be sustained at current levels without new revenues.  This is not a new call from progressive town committee members like Rich Cowan. It has only become a louder call recently in light of budget projections that paint a bleak picture for not only FY 25 but for FY26 & FY27 as well!

School Committee Interim Chairperson Alison Volpe and Committee member Rene Young are also raising the budget crisis red flags.  Although they are saying that because of state mandated “minimum net school spend” most of the school budget will not be affected, they are all in on calling for new taxes, mostly in the form of a Prop 2 ½ operating expense “override”!  Schools never have enough money.

The budget projections presented by Town Manager Vandal and Asst. Town Manager/Finance Director Victor Garofalo at the May 22nd Tri-Board meeting painted a bleak picture.  The Tri-Board is made up of the Board of Selectman, Finance Committee and School Committee.

The presentation resulted in a lengthy discussion on what to do.  Most of the discussion centered around the fact that Dracut has one of the lowest tax rates in the Merrimack Valley and has had historically low property taxes for years.  They subtly pointed to the failures of fiscally conservative taxpayers, former Town Managers and current Selectmen for not keeping up with the ever-rising cost of a municipal budget in their quest to keep taxes low!

Hogwash!

As some fiscal watchdogs have said “it’s a spending problem” not a lack of tax revenue!  An operational override of Proposition 2 1/2 should not be the only solution to a spending problem. But in Dracut, it’s the first thing on our so-called leaders’ minds.

Many Tri-Board members have commented that additional tax revenue is needed to improve basic services and that property owners as well as taxpayers need to be educated, in order to get them on board for an override.

Many of our town elected leaders are echoing that sentiment.  They say, “taxpayers need to understand that we have a serious shortfall that will result in layoffs, less town services and municipal building closings if taxpayers do not accept a raise in property taxes”.  Here comes the fear mongering, “we will have to close the Public Library”!

No one wants to CUT positions, close the library or lay off town employees.  God forbid Selectman or School Board member would ever propose a leaner, more efficient work force as well as spending only what you can afford!

But outspoken Tri-Board members like Alison Volpe, Alyssa Nazzaro, Rich Cowen, and Rene Young, will obviously lead with the idea of seeking a Proposition 2 1/2 operational budget override. The manager and her staff repeatedly stated that without new tax revenue or new taxes and higher fees, services & personnel will surely need to be cut.  But to be fair, Vandal conveniently stated that she is not suggesting an override. Of course, you aren’t!

Selectman Tony Archinski, who has in the past supported the idea of an “operational override,” was not having it.  He stood alone stating that he knows that the majority of Dracut taxpayers, voters, and many of his supporters, have spoken loud and clear, that they do not want higher taxes. They, the voters, will soundly defeat any attempt to permanently raise property taxes by an “Operational Override”!

Dracut has long been a fiscally conservative community and has overwhelmingly defeating operational overrides by a two to one margin at the ballot box.

Some on the Tri-board believe that the town’s demographics are changing.  They believe that an override would prevail because of that demographic shift. They claim that new, younger residents with school aged children will want to increase school spending & services and likely will favor raising taxes.

I do not believe that Dracut’s demographics have changes to that degree.  Although I do believe that our population is changing, shifting from a more conservative baby boomer electorate to a more millennial/Gen X Y Z progressive population. I do not believe that we are at the tipping point yet.  I do believe a shift is coming!  Dracut’s conservative taxpaying population is aging and should be paying attention to the threats of higher taxes!

Voters in town have been hearing loud drum beats as well on how the town needs at least two new elementary schools to replace the aging Greenmount and Campbell schools.  We are also hearing that we need to build larger schools to accommodate a projected growth in student population.   Taxpayers have supported “Debt Exclusion” overrides for new school buildings in the past, but with all the doom and gloom surrounding a very real looming budget crisis, they may think twice.   Especially at the tune of $400 Million Dollars in possible current Construction estimates!

Most taxpayers do not like the sounds of beating drums for higher taxes and are paying attention!

Some people believe that a split tax rate to shift some of the tax burden from single family homeowners to businesses owners is a way to make businesses share the burden in a more “equitable” way.

Dracut’s current tax burden lies mostly on the backs of single & multiple family homeowners by a whooping 92% with businesses only contributing a mere 8% of total tax revenue.

The highly touted Economic Development committee and the addition of an Economic Development Director was created to attract new businesses to help increase the percentage of businesses and related business tax revenue.  But that trial balloon is looking more like it’s filled with a lot of hot air!

A split tax would only be effective when the business side reaches a minimum of 25% of the towns tax revenue!  Opening small mom and pop businesses will not create enough tax revenue to move the needle in that direction.

That’s a LONG way from happening…

That is why the idea of a split tax rate is dead on arrival!   As is an Operational Override!

Taxpayers and voters, in my opinion, will defeat and operational override. And may reject a much-needed debt exclusion override for new schools as well.

One response to “InsideDracut: Banging the Tax Drums Slowly”

  1. Rich Cowan says:

    John, I do not think I wrote the article that you are describing here — one that makes a case for an override. I did write a long piece on the whole history of enrollment drops and funding struggles in the schools and how it has affected the football program. But it would be incorrect to compared the missed opportunity (in 2012) to stop the outflow of kids to charter schools with the situation in 2023. That number increases from 78 to 260 students in just five years’ time.

    The biggest difference between 2012 and 2023 that the schools have not been starved for operating funds in the last three years, as they were back then. Schools are supported by a large influx of state aid and an accompanying state mandate under Chapter 70 that will continue at least for the next four years. The people with the most to lose if there is no new revenue are townspeople interested in road maintenance and public safety, as there is not a comparable influx of state revenue on the way to increase increase in Chapter 90 road spending, or pay the salaries of public safety officers. Those department are much more dependent on town funding than the schools.

    So you are likely to see calls for an override, but if it happens they are likely to come from those are generally concerned about town finances, and especially likely to come from those who have family members in public safety or other town departments. Ms. Young expressed support for an override at the last tri board meeting and pointed out that while she has no family members working for the school department, she does have a family member working for the fire department.

    So I would not say that any “school override” for operating costs is on the horizon. As you correctly point out, the big school issue on the horizon is a debt exclusion for the Campbell school.

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