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The Mayor's new budget: Do residents get good value?
By Anonymous on Thu, 04/12/2012 - 5:23pm
The Mayor's new $2.4-Billion budget increases real estate tax 2.5% - the maximum if I'm not mistaken - even as wages for many Bostonians remain flat on the heels of the Great Recession. In addition, the MBTA has announced record increases in fares which will cost some commuters thousands more per year.
Please comment in the thread below and post links to other articles about the Mayor's budget. My questions about the City of Boston's finances and services are are follows:
- Do Boston residents get good value for their tax dollar?
- If you own your home, what do you pay? And what do you value in the services you receive?
- What is the value proposition being made to taxpayers in return for the 2.5% increase in real estate tax?
- Do you think residents should ask the City Council and Mayor to review the budget and identify cost savings of 5% that can be made without damaging programs and new initiatives?
- Would you like to hear more about the new spending that is planned, what it costs and what we get for it?
“We are perhaps the strongest city in the nation right now – our finances are stable, our economy is growing, and our neighborhoods are vibrant. The FY 2013 budget supports what got us here and pushes us to go further,” said Menino. “We will continue to invest in our strengths, build relationships, and engage our partners in a way that helps expand access to quality schools, empower neighbors to engage in their communities, promote healthy living, and ensure Boston’s prosperity for years to come.”
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Comments
How about a multiyear tax break, just like Liberty Mutual
If the super rich Liberty Mutual can get a property tax break, how about the rest of us?
In a word?...
No.
It's not even close. Value has two components - cost and quality. Bottom line - we spend a fortune compared to other cities in the Commonwealth (I believe of the 25 largest cities in Mass only Cambridge spends more per capita and keep in mind we are one of the wealthiest states in the country) - the cost is VERY high. That's fine, but for that kind of money we should have just about the best of everything (and despite my curmudgeonly budget posts - I do think we get mostly "good" - but given what we spend that doesn't reflect value which is my main concern). We do have the slight burden of being the state capital and financial center of the region so our budget necessarily must be a little higher than other communities - but keep in mind - this is only on the margin. The vast majority of Boston's expenses (probably 90-95%) are spent directly providing services to the city's residents, not to the tourists and commuters and other visitors that come into the city every day.
First - for those interested in learning more about the budget your primary link is:
www.cityofboston.gov/budget
You can then get most of your information from the summary budget here:
http://www.cityofboston.gov/Images_Documents/02%20...
When you look at expenses it breaks down roughly like this:
Schools 35% (school budget includes health insurance for all BPS employees)
Public Safety 20% (police and fire only)
All Other departments 20% (includes health insurance for all non-BPS personnel)
Public Health/EMS 3%
Pensions 5%
Debt service 6%
State assessments 7% (mostly MBTA and charter school tuition I believe)
Other 4%
Note - since 2010 teacher pensions are no longer accounted for in the reported budgets - it's a standalone entity. If you are comparing pre-2010 numbers you need to adjust for this as necessary.
Thanks!
Great summary and references. I'd have to agree. Relative to the rest of the country we seem to be in a far better place economically speaking. Why the increase? Normally the city cries poverty at budget time and magic money appears out somebody's bunghole later on. This year things are so good they didn't even bother with that but still raised the taxes. I lean towards being fiscally conservative (i.e., freak out about getting into debt and generally try to be cheap) and appreciate that the Mayor has done a good job of keeping a lid on spending even though he has to insult people's intelligence every year at budget time to do so. But I agree that in the end the quality of some of these services seem lacking given how we appear to be doing financially. Why not keep the taxes flat for a year and let people feel more comfortable and blow more discretionary income around town rather than jacking them up and then have skinflints like me bringing my microwave campbell's soup to work instead of going out for lunch and supporting the local economy?
Why not keep the taxes flat
So no hiring, no promotions, no raises, use less utilities to make up for rate increases... Depending on how the union contracts are written, base pay increases may be locked in. So in other words, to keep taxes flat, you'd need to cut costs. So what will you cut?
Speaking in terms of real estate.....
I get a much better bang for my buck (in terms of real estate assessments/taxes/real worth) in Boston and Brookline than I do in my dinky little house in the burbs, and that is without the residential exemption. But I choose to live in a dinky house in a "nice" town because I like living with woods around me and be able to walk around my back yard naked if I wanted to. But that is neither here nor there.
The 2.5% increase in real estate tax isn't going to make me raise any of my rents in Boston and I have less of a problem paying that than I do paying $200-$250 a month in gas. There are still people willing to pay high rents in Boston and Brookline, and I don't see the rental market suffering in these places as you might in other parts of the country.
You can still get a nice two family home in West Roxbury for 500K and you will be paying 2.5K-4.5K a year in real estate taxes, even without the exemption. A 500K house (market price) in the town I live in will require about 7K-12K a year in taxes depending on the assessment.
Just my 5 cents.
Only in Boston
could a town be rural enough you can walk around your yard naked with privacy and still count as a "suburb."
Boston Public Schools
The Globe Reported last week that Suffolk County has a 62% high school graduation rate.....I can't believe 35% of taxes in Boston are spent on FAILING schools. I own a condo in Dorchester and my wife and I own a house in Hyde Park.....We are about to have kids and everyone we talk to tells us the elementary and high schools are acceptable in the city but the middle schools are the problem. I think the BPS should be reworked starting with the ellimination of Busing of kids to schools in neighborhoods they don't live in....this makes no sense and requires a large cost in addition :(
The under performing Boston
The under performing Boston public schools (we have a few) are primarily a function of the student population and not the schools per se. Performance of public schools is based on student performance on standardized tests. The schools that do not do well on the tests have a high number of students who are ESL.
A public school teacher told me it takes 3-5 years of ESL to be a productive student in non science subjects. Current MA state law (courtesy of the Mitt Romney administration) gives these students 1 year and no more of dual language instruction. A big city like Boston which WILL have many ESL language students needs better policy on ESL instruction if it wants to improve performance of its schools.
The push for community schools needs a fuller debate. It has not addressed school choice (in fact it limits choice by heavily weighting preference to families in geographic proximity) and it has not addressed federal law that has distribution requirements for low income student population (we can't put all the students from poor families in the same school.)
Who would argue that we should end METCO to save money on transportation? No one. So why is transportation savings a valid argument for community schools? Because is whitewashes all of the other effects of such a policy.
IMO, Community schools is a seductive idea that will further advantage middle class families over low income families without addressing the issues that cause some schools to under perform.
But about the budget. I thought Boston spent a bigger percentage of it budget on public schools, so thanks Stevil for the info.
Does anyone have an opinion about Menino's initiatives to improve under performing public schools as compared to other spending such as teen centers? Do these these new initiatives address the most fundamental and pressing issues gov't must address?
I'd argue
I'd argue for ending METCO because it takes the most motivated students away from low income neighborhoods and schools, exacerbating racial and income segregation in city schools.
The transportation savings is just a bonus.
more about why you think Boston residents don't get good value
Stevil, I'm interested in reading more about why you think Boston residents don't get good value for their tax dollars. If you're interested, spend some more time sorting through your thoughts and share them below.
Top Line?
Dear anon
Looking just at the top line, I bought my place in 1993. Since then my taxes have increased almost 4 fold or about 6% a year for almost 20 years. If the taxes were "sufficient" in 1993, although perhaps not generous, over the years they have long since passed into the "generous" phase. I can assure you that our employers have not been anywhere near that generous with salary increases over the years so the property taxes take up an ever increasing portion of our income.
Two things - 1) my wife and I are fortunate that we can still afford the taxes because in 1993 they were perhaps low. However, if taxes continue to increase at this rate, even if we can afford them, it simply won't be worth spending that kind of money to live in Boston, especially as we approach retirement. 2) what kind of other product (that is effectively the same product) could quadruple in cost over the past 20 years that you could say still offers good "value". You may still pay for it as you don't have much practical choice - but it certainly does not offer good value.
Stevil
Your property that you bought in 1993 should be worth a lot more now than what you paid for it. If it is worth more, you should be paying more taxes. The services you get of your taxes shouldn't really be a factor in your arguement unless the value of your property hasn't increased and you still pay more in taxes. Your mortgage is also probably paid off as well.
I bought a piece of property in Roslindale in 1994 for 150K and I could probably sell it for 650K now if I wanted to. The taxes are about 6K a year, and in 1994 they were almost 2K if I remember correctly.
And are you saying there are other places in Massachusetts where you get a better bang for your buck in terms of taxes Stevil? Besides Brookline, Wellesley and maybe Newton, I can't think of anywhere else in eastern Massachusetts where your tax rate/real estate market worth is as good as Boston's is. And I'm not even including the residential exemption.
As I've said before Pete...
Taxes have nothing to do with value - it's relative value (and appreciation that's important). If everyone's house doubles in value tomorrow - taxes don't double - actually they go up by 2.5% if there is no override (and we've never had one in Boston). As I've said - our taxes have doubled in the last 10 years and almost quadrupled in 20 (off of what was then a low base - our taxes USED to be a phenomenal value - we are now below average).
By the way - if your home is worth $650k and you get the residential exemption - you may be surprised to learn that the residential exemption has almost no value to you - maybe a few hundred dollars at most. Without it our tax rate would be about a couple dollars per thousand lower. The break-even is about $750k I think - if you own a home assessed over that you'd actually be better off with without the exemption (although that's not a choice).
I did some comparisons - if you look at Brookline, Newton, Wellesley, Winchester and Hingham for some random surrounding "exclusive" towns - they tax about $3000 per person and total spending is about $4000 (2010 census data and 2011 fiscal data per DOR website)
For some middle class cities in the area I compared to Watertown, Taunton, Waltham, Somerville, Quincy which tax about $2000 per person and spend about $3000 per person.
Boston taxes about $2500 per person and spends just shy of $4000.
So we are taxing and spending on par with some of the most exclusive communities in America, but I'd say we are getting services on par with (or below) those of typical middle class Commownwealth communities. In my book that's poor value.
Ok I see what you are getting at.
It isn't always about services though, its about location. It's probably the reason you chose to live in Boston and not Worcester or Hartford or Portland, ME. I mean, Boston is Boston. It's a place where people want to live, work, and visit. The basic services are going to cost a little more, but that's kind of how popular cities work.
Sure, the schools arent the greatest, but that's why you pay a little more in Brookline and newton, and a lot more in Dover or Sudbury.
Real Estate Tax
I own my home in Boston, and as an individual who resides in my home, I get a very substantial resident tax break. Basically, for people who own and live in their homes in Boston, the rate hike is closer to 1%, than the 2.5% cited.
I'm happy with my taxes
I don't have many complaints about property taxes in the city and the overall cost/value equation.
I agree with what most people think, that the public schools waste money and could save some by eliminating most busing and cutting overhead, although I haven't looked at their budget line by line. And, if results are measured in educated students being ready to go to work or to attend college (and how else would you measure it?) then they are failing, or at lest not succeeding.
Our bill is around $3,200 after the $1,600 residential exemption. Our tax bill has gone up every year. Our assessed value went up by more than 10% in one year (which, I'm sure coincidentally, was the year after I ran for public office ...) but has only gone up about $9,000 since we first bought it - which is probably a fair measure of its market value.
Do we pay too much in taxes? Don't we always? Do I feel I'm getting good value for my money? Most of the time. As I've often said, as long as the police keep a crazy person from knifing me, I'm happy to pay.
Hard data
This would be a good place to start:
Missing link
http://www.bostonherald.com/projects/your_tax_doll...