By Bob Rakoff
The Town of Amherst is not fiscally sustainable without significant changes. The major problem is that nearly 50 percent of the land in town is exempt from property taxes, which account for 70 percent of the Town’s annual revenues. State aid makes up another 20 percent, while 10 percent comes from other sources.
The Town has limited control over these sources of revenue. The state makes its own decisions about local assistance. And the ability of the town to increase property tax revenue is constrained by law, by the regional real estate market, by a limited supply of buildable land that is appropriately zoned for development, and, of course, by the unpopularity of tax increases.
At the same time, demand for public services continues to increase beyond the growth of our tax base; we already face one of the highest property tax rates in the state. Deferred capital projects (library, school, fire, public works) pose significant financing challenges, even in an era of low interest rates. Voter approval of a tax override in 2022 to finance a new elementary school is by no means assured.
In response to this tension between the supply of tax revenue and the demand for expanded and quality services, there have been two kinds of responses.
Some people call for retrenchment, with deferral or scaling back of some capital projects along with cutbacks in regular annual spending. Others see more intensive commercial and apartment development as the route to a more sustainable and affordable future that does not sacrifice needed building projects or popular programs.
Retrenchment is not politically popular, and its proponents are also largely opposed to increased apartment development. Meanwhile, proponents of expanding apartment construction to increase tax revenue acknowledge that such development may make expansion of town-financed services (e.g., schools, library, public safety) even more necessary. Of course, if apartment development attracts mostly households without children, then the impact on school spending is lessened. But that would mean more apartments for college students, not working families, hardly the best or most equitable future for our diverse town.
There seem to be no easy answers. We need new revenue sources. And we need new, outside-the-box thinking.
So, in the spirit of Jonathan Swift, here are a few modest proposals for a more sustainable fiscal future for Amherst.
NULLIFICATION. Texas has taken the lead in declaring that it has the right and power to nullify federal laws it dislikes. Let the Lone Star State be our guide here. The Town should declare as oppressive the state and federal laws that prevent the taxation of property owned by non-profit organizations and move expeditiously to tax the holdings of Amherst College, Hampshire College, and other rich, tax-exempt landowners.
UMASS STUDENTS. There is not much we can do to get more money out of UMass. But UMass students are another story. Those students spend millions of dollars to purchase credit hours. Those credit hours are a commodity that is ripe for taxation. Let’s go after them.
GAMBLING. Instead of pursuing boring and expensive capital projects that will never return real profits to the town, we should pursue the more lucrative path of casino development. Perhaps go for double-or-nothing by locating a casino on the capped landfill.
NAMING RIGHTS. We already have a library named for the benefactor, Samuel Minot Jones. Let’s sell the naming rights for other buildings and spaces. Imagine a Jeff Bezos Elementary School, or a Warren Buffet Public Works edifice. Or imagine buying your local fruit and veg on the Apple Computer/Steve Jobs Memorial Town Common.
ANNEXATION. As one local wag put it (OK, it was our own Nick Grabbe), the Town of Amherst has outsourced its commercial development to the Town of Hadley, which reaps the benefits of an expanded tax base, increased revenue, and low tax rates for homeowners. We need to take control of that development and seize those tax benefits. The town should raise a militia (perhaps ROTC at the University could assist), march directly down the hill, and forcibly annex the Town of Hadley. This would add substantially to our commercial tax base while providing us with valuable agricultural and waterfront property. The likelihood that there are more gun owners in Hadley than in Amherst should not deter us. Be of stout heart.
Pretty wacky, I know. But both fantasy and reality require outside assistance to move toward fiscal sustainability. The state grants the town new taxing authority. A rich benefactor comes to town. Neighboring towns join forces to work together on common problems.
It’s this last case that points the way to a new path. Not through conquest, but through regional cooperation. The accident of having a big state institution or less valuable property should not determine a town’s ability to offer and pay for public services. Equity and efficiency demand a shared, regional approach to governance. And for Amherst that means re-creating Hampshire County government. What that would entail, and promise, will be the subject of a future article.