A $3 Million Elephant

Jim Goodrich is a retired businessman and a 35-year resident of Westport.  His 3 children are graduates of the Westport school system.  Here are his thoughts on this year’s town budget — and his solution.

In trying to resolve a single budget issue, the Board of Finance has created a host of problems far more significant than the one they have set out to fix.  There may be other ways to remedy the situation.

Attending the review of the Board of Education budget by the Board of Finance was disheartening.  I was disappointed because significant reductions to a well received and well thought-out budget were made, and the reduction did not square with my personal values.  The disheartening part came from statements made by certain BOF members that indicated to me that some of them understand little about how the school system operates.  They may not even believe in public education.

I understand how town officials can also feel frustration.  Cutting police and fire headcount, for example, is pretty draconian stuff.  When you have the first selectman talking about being forced to cut vital services, and the schools talking about cutting educational programs, you feel the divisive battle lines being drawn.

Is this the way it must be?  I certainly hope not.  But I think we have been brought to this juncture as a result of less than effective leadership by the Board of Finance.

The $3 million elephant in Westport's budget room.

The BOF apparently believes that its only job is to keep taxes flat or low, and they have found a way to do so by “spreading the pain” – but at a cost to the fabric of the community they serve and that we all live in.   The BOF may feel that its job is done and now they can pass the problem down the road to the RTM that will have to resolve a serious set of issues.

Somehow we’ve come to this point without a good look at the elephant in the room:  a town pension liability of $3 million that needs to be funded.  The BOF may think it has handled the issue by cutting expenses by about $3 million.  But from another viewpoint they have created a host of other significant problems, while superficially solving the one they most feel responsibility for.

The pension issue is real, and because it is a town liability, it is also a taxpayer liability.  We taxpayers own the liability and have to pay it.  The essence of the BOF’s decision is that we taxpayers must pay for our liability by cuts in essential services.  Those cuts means a dirtier town that is less secure, with an educational system that is less than high quality.

In other words, the only “win” for the taxpayer is to continue to pay low taxes as compared to neighboring towns.  In every other respect we taxpayers “lose.”  I’m not pleased to think that a stretched police or fire department might not be available for my emergency, or that our schools may not do for today’s students what they did for mine.

I believe that if you have a complaint or a problem, you have a responsibility to try and resolve it.  I do not believe that cuts to key services is the way to solve the liability we taxpayers own.  I do believe there are things that can be done.  I offer a couple of possibilities that are more of a rifle shot aimed at the proverbial elephant in the room, as opposed to destroying the house with the elephant in it.

The most simple-minded suggestion is to raise taxes to pay for the liability of $3 million.

A variant of the first is to create a tax surcharge targeted at the liability, and payable over a defined period of time.  Taxpayers who are unable to pay the surcharge could be eligible for relief through a program similar to that offered to seniors (a deferral of tax until the taxpayer’s home is sold, or the tax lien is otherwise paid off).

Create a tax-exempt, interest-bearing bond for the $3 million liability that could be purchased by taxpayers (or, perhaps anyone) and paid back to investors over time. My parents bought me war bonds when I was a child, and savings bonds later.  Why not Westport Bonds and Minute Man Bonds?

“Our” liability has a defined size and scope, and we can end it.  If the clever people involved with the Westport Country Playhouse could raise $30MM to fix a facilities problem, perhaps some of them would lend their considerable “bling” to help fix a one-time budget problem.

How?  Hold a “Retire the Debt” fund raiser.  Buy a kid a piece of a fire truck, police car or classroom.  Sponsor a teacher, a firefighter, a cop, a police dog.  If you like golf, sponsor a fairway or one of the greens.  You want waterfront property?  No problem, you can have your own section of Compo beach. Then let’s recognize and celebrate those who have taken part.

Hey, this is Westport.  We’re smart, generous and creative.  Given the choice between a poke in the eye with a sharp stick (read “cuts in essential services”) or a pat on the back (read “my own section of Compo Beach”), I know what I’d choose.

So come on, Board of Finance:  Hunker down and think of something more uplifting than “shared pain.”

You’re Westporters.   You can do better.

10 responses to “A $3 Million Elephant

  1. BRAVO Jim! This is a very well written and thoroughly thought out plan of action that would work for the entire town. I hope some on the various boards read it and give your ideas some careful thought.

  2. The Dude Abides

    Concur. Excellent examination of solutions rather than just cripes. But I think we have to come to a stark realizaton in this country as well as in this town, that if we want something, we are gonna have to pay for it. No more deficit spending, no more 3rd mortgages and no more carrying credit card balances. It is a tough time to do so with the economy as it is but that was one reason it took a dump. I applaud Mr. Goodrich’s sensibility and initiative. Now let’s do something!

  3. Catherine Davis

    Brilliant! Parents have always been more than generous when given a specific fund raising goal like Smartboards, or playground equipment, or auditorium seats. If we know that, if we all pitch in, we could get rid of this cloud once and for all and not have it keep factoring into the budget for town services and school programs, most of us would step up. I see a giant “thermometer” going up in downtown to chart our fund raising progress! OK, I’m ready for the cynics or realists now….

  4. Along the lines of the late Harry Chapin and Billy Joel both created charaties or foundations that took care of their “own”. Mr. Chapin’s was all about hunger and Mr. Joel’s was about the Long Island Fisherman, in the same vein we can take care of our own. Let’s do something we can be good at and be selfish at the same time. Give back to Westport in ways that have all sorts of great ramifications. The ideas that have been shared here are seeds to sew. Sponsorship of 18 different holes of golf genious. Levitt Pavillion gets a sponsor more loot. Fundraising in Westport with a true visual and tactile outcome

  5. Charlie Haberstroh

    Jim,

    Thank you for your thoughts. Unfortunately, the problem is a $30+ million one, not a $3 million one. Also, the problem is primarily on the municipal side of the ledger – the bulk of school pensions are handled by the State.

    If it were a one time event, we could have handled it…that is what the town’s general reserves are for. The actuaries engaged by the town determined that we have to pay a pension contribution of $8.3 million per year for the next 30 years to cover our obligations (last year which were $7.7 mln) and unfunded shortfalls ($30+ mln). Additionally, this does not include growing liabilities for post employment medical costs and the underfunded portion of that fund.

    The $3 million referred to by the press is actually the amount the Selectman proposed to underfund the plans this year (i.e. $5 million instead of $8 million), placing our finances in an even bigger hole.

    Several members of the Board of Finance voted against the size of the school cuts, not wanting to degrade our town’s greatest asset.

    The ultimate, long term solution to the pension problem is to re-open the pension and union contracts. We must move toward defined contribution plans which provide retirement funds but eliminate the financial risk to the taxpayer.

    The idea of a town wide fundraiser to cover the pension fund shortfalls has merit, but the issue that the BOF had to deal with this year was how to fund the higher pension outflows. The town of Westport will have a similar problem in the years ahead.

  6. A modest thought. Let the community discuss and clearly define what we want from our school system in terms of measurable goals.

    My first question would be … what are the educational goals and expectations of the parents and students? The second is, what are the differences, if any, from the rest of the community?

    For example, what would be a major school goal and how would you measure it?

    How does one measure if the Staples Mission Statement is achieved and how much does it cost? The Staples Mission Statement reads: We are a community of learners engaged in a quest for academic excellence and committed to civic and social responsibility. We are unwavering in our belief that we must act with integrity and treat each other with respect.

    I believe that the prime goal of many parents and students is to get accepted in a college of their choice. And this goal can be measured.

    Then we can determine the cost of achieving specific goals, and decide if we want to pay that price, and its affect on liabilities from previous decisions.

    I find most discussions are about process rather than defining and achieving clear and measurable results that benefit the users of those services.

    Interestingly in our system of town governance, many governing bodies have the authority to determine policy and budgets. As a result, it is difficult to assess accountability. Who is at fault if the agreed-upon goals are not reached?

  7. Jim Goodrich

    Charlie,
    Thanks for the information. I tried to reach you yesterday and fact check but could not make the connection. Thirty is bit heftier than three and represents about $3,000 per household. If Westporters want to try and reduce the exposure it can still make a meaningful difference. And thanks to you, Ed and Avi for your support of the schools.

  8. The Innocent Bystander

    It appears that the 3 million dollar elephant in the room just got ten times bigger if the above statements are correct. Two things stuck me curious on this blog discussion: (1) Is the primary goal of our educational system just to get our kids in the college of their choice? As a product of such misdirected expectations, I find
    this to be worrisome in a world where a $250,000 education may bring a minimum wage job and (2) I am impressed that there seems to be a consensus that we need to deal with these financial problems locally via fundraisers of various nature. To me, such is the American way instead of running to Hartford or Washington for a handout or worse yet,just whining about it.

  9. Mr. Goodrich implies that people move to Westport for two reasons: (1) the school system and (2) low taxes compared to neighboring towns. Now if taxes were “equalized” among all the neighboring towns with good school systems, people could pick anyone of those towns and be satisfied that their children would get a comparable education. Instead, they move to Westport, which has the added advantage of lower taxes. That, for them, also means higher home prices and, most likely, bigger mortgages with larger monthly payments. And that’s one reason why residents want to keep their taxes low.

    To the list of solutions that he has suggested, would Mr. Goodrich add another? Like following the Parks and Recs model: Core functions (such as using the beaches and parks) are free; additional functions (golf, tennis, pool, skate-boarding) are fee-based, but no one is ever turned away based on inability to pay

  10. When Jim referred to other communities, he likely included Westchester with its out-of-control taxes. Westport’s property tax rate is higher than Greenwich, Darien, and New Canaan. Note that this often depends upon when the properties were revalued. Thank you Mr. Haberstroh for helping make sense of the pension predicament we’re in.

    Greenwich 8.316
    Darien 11.37
    New Canaan 13.351
    Westport 14.41
    Wilton 19.58
    Weston 23.61