So Many Budgets!

By Sarah Marshall

In my family, we have only one budget that accounts for all the money that comes in and goes out, and we have (almost) complete control of it.  I think that Amherst residents tend to assume that Amherst’s public budget is similar – there is one big pot of money and we have complete freedom to decide how to spend the funds. Certainly, this was my hazy assumption for many years. But it is not entirely true. If you have ever wished the Town spent its (our) money differently, it is worth reading on so you will know when and how to voice your opinion most effectively.

Amherst has, in effect, several budgets and funds.  Crucially, much of the money cannot be moved from one use to another during the fiscal year.  We have the Regional Schools budget, the Jones Library budget (which addresses all the Town’s public libraries), the Elementary Schools budget, the Community Preservation Act (CPA) fund, Enterprise funds (water, sewer, solid waste, and transportation), the Town (Municipal) budget, and a few others.  Adding to the confusion is imprecision in the term “Town Budget” – to some, it may refer to all aspects of spending on public services, while to others, it may refer to specific chunks of that spending that are within the control of the Town Manager.

Our local officials and managers make critical decisions early in the planning cycle, namely, what are the bottom-line contributions the Town proposes to make to the Regional and Elementary Schools and the Libraries.  It is at this point – generally in November – that significant shifts can be made instead of across-the-board increases or decreases. Once the elected leaders of those bodies – the school committees, for example – develop and pass their budgets, and they are subsequently passed by the Town Council, only those bodies have authority over their money.  The Town cannot take money out of the Elementary Schools budget during the fiscal year to buy new computers for the Department of Public Works, for example.

Amherst’s contribution to the Regional School budget (which funds the Middle and High Schools) depends heavily on the decisions made by Pelham, Leverett, and Shutesbury, Amherst’s regional partners. Once Amherst votes its contribution, the Town has essentially no power to claw back money from the Regional Schools to use for, say, affordable housing. Similarly, the schools cannot reach into municipal funds.

The Enterprise funds represent the self-funded water, sewer, solid waste, and transportation operations. Even though they appear in the Municipal budget, these Town services are required to charge fees sufficient to cover their costs, and Enterprise funds cannot be raided to fund unrelated activities of the Town. Our water and sewer bills reflect the cost of those services.

The CPA fund receives a property tax surcharge, as well as some funding from the Commonwealth, that by law can only be spent on certain projects pertaining to historic preservation, community housing, recreation, and open space.  I recently heard someone complain that the Town was choosing to spend on the order of a million dollars on a renovation of the North Common and should instead fund the new Community Responder program.  Such a re-allocation is not possible, since the North Common renovation will be paid for almost entirely by CPA money that cannot be spent on town services.  In fact, the ability to apply CPA funds to the needs of Town buildings and properties frees money for services such as the Community Responder program, or at least avoids pitting these needs against each other.

During any fiscal year, the Town Manager has the authority to re-allocate funds within the Municipal budget, understood here to exclude all the operations and expenses discussed above.  For FY2022 (which began this July), that budget amounts to $25 million, out of the approximately $96 million that also includes the budgets for the schools, libraries, Enterprise funds, capital investments, and some other uses.

The relatively small fraction of total spending spent on municipal services managed by Town Hall can lead to problems of interpretation.  For example, I have heard people express dismay at the fact that our Public Safety Department accounts for 44% of the General Fund (the Municipal budget). That certainly seems disturbingly large if one assumes that public safety is simply police services.  In fact, comparable funds are spent on the Police and Fire Departments, the two major Public Safety services.  Furthermore, in comparison to our total public expenditures, Public Safety services account for just 12% of spending, with about 6% allotted to the Police Department.  Since our property tax payments and water and sewer bills contribute to all Town services, from police to schools to libraries to capital improvements, I think the latter comparisons are more informative.  Whether 6% is an appropriate level of funding for the Police Department is another matter.

Image by Steve Buissinne from Pixabay

So, no, Amherst’s public budget does not allow nearly as much flexibility as my household enjoys. We can set our own rules and priorities and change them as we see fit but the Town is much more constrained.  Residents who want changes in the Town’s spending priorities need to figure out which elected body to speak to, and when.  Fortunately, in the fall, a budget calendar will be released, outlining the steps, responsibilities, votes, and opportunities for public input.  Anyone wanting to learn more about where our Town’s money comes from and where it goes can jump into the resources at https://www.amherstma.gov/78/Budget.  The calendar will also be posted there.  Residents can also email their Town Councilors, School Committees, Town Manager, and library Trustees at any time.

3 thoughts on “So Many Budgets!”

  1. Well done, Sarah. This is a basic primer on Amherst’s finances and clearly explains things that lots of residents don’t understand. Your delineation of the schools budgets, enterprise funds and CPA funds was succinct and useful for residents to know. Thanks.

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  2. Sarah – thank for putting this together. Could you please change emailing library staff at the end of your article to emailing the Library Trustees. We definitely do not want to inundate library staff with budget matters! Thank you.

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  3. Very useful summary – thank you! It’s also worth noting that the total town budget includes state funds as well. For example, for FY22 the elementary schools received $6.2M in state aid, and the regional schools received $9.6M. Similarly, Amherst received $835K in state aid for roads.

    This is a different point than the one you were making, but as people look at the overall total spending in various categories, they also should drill down to understand how much the town is actually paying for and how much is subsidized by the state.

    Ch. 70 (education) link: https://www.doe.mass.edu/finance/chapter70/fy2022/chapter-2022-local.xlsx
    Ch. 90 (roads) link: https://www.mass.gov/service-details/chapter-90-apportionment

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