News Flash

Town Finances

Posted on: March 10, 2021

Question 1 Information - May 4, 2021 Annual Town Election

In the month of March, the Board of Selectmen spent a considerable amount of time at various meetings and workshops discussing and deciding on placing a ballot question on the May 4, 2021 Annual Town Election ballot concerning a proposition 2 1/2 operational override for the purpose of funding school and municipal expenses.

On March 2, 2021, the Board of Selectmen held a joint meeting with the School Committee.


This topic was further discussed at a joint meeting with the School Committee and Board of Selectmen on Tuesday, March 16, 2021 at 7:30 pm, which can be seen below. 

Click HERE for the March 16, 2021 Presentation from Town Manager Kevin Mizikar

Click HERE for the Override Framework between the Board of Selectmen & School Committee

Click HERE for the Override Statement to the Residents of Shrewsbury from the Board of Selectmen & School Committee 

At the Board's meeting on Tuesday March 23, 2021, Mr. Mizikar reviewed a presentation regarding the proposed proposition 2 ½ operational override. Mr. Mizikar discussed the current American Rescue Plan (stimulus), its knowns, unknowns, and the implications with a potential override. See below for a recording of the meeting and the presentation. 

Click HERE for the March 23, 2021 Presentation from Town Manager Kevin Mizikar

On Friday March 26, 2021, the Board of Selectmen voted to place the following question on the May 4, 2021 Annual Town Election ballot:

QUESTION 1

 

Shall the Town of Shrewsbury be allowed to assess an additional $9,500,000 in real estate and personal property taxes for the purposes of funding municipal and school operating expenses for the fiscal year beginning July first, two thousand twenty one?

 

YES_____                   NO_____

 

Summary:          In 1980, the voters of the Commonwealth adopted a referendum that became G.L. Chapter 59, Section 21C, but is more commonly known as “Proposition 2½”.

 

Proposition 2½ limits the tax levy of the Town, which is the total amount that can be raised by taxation, to an increase of two and one half (2½%) percent of the previous year’s levy limit plus new growth. Accordingly, the levy limit for the fiscal year beginning July 1, 2021 (FY 2022), will be established by increasing the levy limit of $77,695,673 (FY 2021) by 2½% and then adding the tax levy value of any new growth in taxable property. New growth for FY 2022 is expected to be in the range of $856,000. New growth in the current fiscal year (FY 2021) was $856,963.   Previous years’ new growth was $1,121,615 in FY 2020, $1,597,448 in FY 2019 and $1,299,856 in FY 2018.

 

The present question seeks a permanent increase in the tax levy limit of Nine Million Five Hundred Thousand ($9,500,000) Dollars for the purposes of funding municipal and school operating expenses for the fiscal year beginning July 1, 2021.

 

Town Meeting ultimately determines the total amount of appropriations (within the levy limit) and the appropriation is then met or raised by application of the local property tax rate upon assessed property values. If the full amount of the proposed increase of Nine Million Five Hundred Thousand ($9,500,000.00) Dollars is used and appropriated by the Town Meeting for the first year (fiscal year 2022, from July 1, 2021 to June 30, 2022), the impact on the average single family home which is valued at $481,819 will be an annual increase of $704.34. If the Town Meeting does not appropriate all of the increased levy capacity, the impact will be lower, depending on the actual amount appropriated.

 

A “YES” vote will make available to the Town Meeting an additional Nine Million Five Hundred Thousand ($9,500,000) Dollars in tax levy capacity beyond the current limitation established by Proposition 2½ ( G.L. c. 59, s. 21C); and

 

A “NO” vote will not make additional levy capacity available to the Town Meeting.


On March 30, 2021, the Board selected a principal proponent and a principal opponent pursuant to Chapter 472 of the Acts of 2006. No persons identified themselves as interested in preparing arguments in opposition of the passage of the question, therefore Town Counsel was selected by default.

Click HERE for the ballot question mailing.

Mr. Mizikar presented a financial presentation and discussed the impact of a "no" and a "yes" vote on Question 1:

The Board of Selectmen has issued the following official public statement:

The Shrewsbury Board of Selectmen unanimously approved placing a $9.5 million Proposition 2 ½ operational override question on the May 4, 2021 annual municipal election ballot during its March 26, 2021 meeting. 

The Board of Selectmen has decided to bring the question to the voters of Shrewsbury at this time because the Town is facing a significant revenue shortfall due to the existing structural deficit caused by two major events. First, the unanticipated extension of the pension funding payment schedule, which was expected to be fully funded this year. This resulted in the inability to shift approximately $3.5M in annual funding previously budgeted to the pension to other operating budget items. Second, is a decline in local receipts (motor vehicle excise tax, meals, hotel occupancy taxes, investment income) by approximately $2M attributed to the negative economic impact of the COVID-19 pandemic. That lost revenue creates a financial situation that jeopardizes the ability to open the new Beal School as planned this fall, creates severe reductions in staffing and programs which impact all levels of the educational program, and restricts municipal departments from maintaining service and staffing levels for FY22.

Much time and effort has gone into developing a sound financial plan for our future. The Board of Selectmen has directed the Town Manager to request the smallest possible spending increase to deliver the most sustainable long-term budget plan for the community. With the passage of this override question, the Board of Selectmen and School Committee commit to limit budget growth by agreed upon percentages to ensure the model is sustainable and no additional override questions will be presented for at least four years. 

The Board of Selectmen fully understands the question's approval will have an impact on taxpayers and is actively looking for ways within the confines of the law to lessen that burden on those unable to afford that increase. However, the Town has reached a point where additional funds are needed to deliver educational and municipal services at a level that residents need and have come to expect. 

The Board of Selectmen and the Town Manager, with the yearly budget approval of the Finance Committee and Town Meeting Members, have consistently budgeted to meet the needs of our residents while keeping the average residential tax bill low. The proposed $9.5M override funds will be allocated in FY22 as follows pending approval at the Annual Town Meeting: educational spending will be increased by $5.1M, the municipal budget will be increased by $1M, and $3.1M will be used to establish an override stabilization fund. The remaining $300,000 will reduce the use of Free Cash in the operating budget. 

If the override does not pass, the approximately $5M budget shortfall in the education budget may result in the inability to open the new Beal School as planned. Fifty teachers and support staff across all grade levels will need to be eliminated, resulting in a drastic increase in class size at a time when maintaining physical distance is a necessary public health measure required to prevent the spread of COVID-19. It is important to note that a $1.9M shortfall in the current school budget was resolved by eliminating programs and reducing 30 staff including classroom teachers and reading tutors. The effects of prior reductions combined with the reductions outlined for FY22 will only exacerbate the educational impacts of more than a year of interrupted learning, compounding the level of need as students return to school full-time. 

In the area of municipal services, the Board of Selectmen has actively supported ongoing strategic and innovative initiatives to reduce costs wherever possible. Both school and municipal departments have aggressively sought public and private grant opportunities to secure additional dollars outside the appropriated budget to meet service needs. To reduce the burden on residential taxpayers, opportunities for economic development were actively pursued resulting in the Lakeway Commons and the Market Basket project that is redeveloping the Edgemere Drive-In property. Town Meeting Members recently voted to create a Town Center Zoning District based on a grant funded Town Center Visioning study completed in 2019, with the goal of attracting more small businesses to the center and revitalizing the downtown area. Despite these efforts, available revenues are insufficient to allow for municipal staffing levels to keep pace with Shrewsbury’s population growth. The Board of Selectmen believes it necessary at this time to request additional funds for the schools and for certain targeted improvements in the areas of economic development, public safety, senior services, community engagement and public works. 

The Board of Selectmen anticipates the Town shall receive funds from the recently passed Federal American Rescue Plan (ARP). Many of the details of the ARP remain unclear, however it is abundantly clear that the one-time ARP funds will be largely restricted in use and cannot be applied to recurring costs without creating an even greater financial cliff for Shrewsbury in future years. Based upon the limited information available at the time of its vote, the Board of Selectmen believes it is in the best interest of the residents to proceed with an override vote as planned, based upon its agreement with the School Committee. The Board of Selectmen acknowledges the variability of the situation and pledges to the taxpayers of Shrewsbury that every effort will be made to supplant taxpayer dollars with ARP funds wherever possible, and to utilize ARP funds to offset other costs related to infrastructure improvements and maintenance to reduce the burden on taxpayers. 

Without approval of this override question, the Fiscal 2022 Town Budget simply will not and cannot meet the needs of our community. The Board encourages residents to review the information on the town website, explaining the current financial situation and the proposed plan to address the problem and provide financial stability to school and municipal budgets for several years into the future.

We ask for your continued support of our town services. 

Respectfully,

Beth N. Casavant, Chair

John I. Lebeaux, Vice-Chair

John R. Samia, Clerk

Maurice M. DePalo

James F. Kane


On Thursday April 1, 2021, the Finance Committee unanimously voted to approve the override stabilization model framework as presented by the Town Manager and agreed to by the Board of Selectmen and School Committee to support the $9.5M operational override. 

CLICK HERE FOR VOTING INFORMATION. 

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