It’s rained buckets this year, so it seems only appropriate that one of the big questions at town meeting next week will be whether to tap into the town’s rainy day fund to help offset the tax burden.
Currently the town has about $907K in its rainy day fund — officially called the stabilization fund. The Board of Selectmen and the Advisory Committee disagree quite strongly on whether to spend any of it. The Advisory Committee say yes, the Selectmen say no.
Ultimately, it’s up to you as voters to decide. To help you out, here are the opposing viewpoints.
The Advisory Committee position: Spend it
The Advisory Committee believes the town needs a rainy day fund, but not one as big as it has today. They recommending holding on to $400K to cover unexpected expenses, and then spending the rest to help keep taxes lower.
“We’re going to have a tax increase regardless of whether we use stabilization money. Our position is to have less of an increase,” Advisory Committee member Tim Langella said at a meeting this week with the Board of Selectmen.
The Advisory Committee recommends the use of stabilization money in part to fund school technology purchases and to keep the road maintenance budget at normal levels.
While some have argued that having less money in the stabilization fund would negatively impact the town’s bond rating, the Advisory Committee says an analysis of the data shows that’s not the case. “There’s no correlation between how much you have in the stabilization fund and your bond rating,” Langella said.
They also argue that it’s not in the taxpayer’s best interest to keep money in the stabilization account.
“Voting to put your money into a town account, or leaving it there, is like putting your cash into a mattress. Of course it is nice to have a mattress stuffed with cash, but you realize that putting it there costs you money that you would otherwise earn in interest,” Advisory Committee member John Butler said via email. “Advisory cannot responsibly recommend that you leave your money in town accounts.”
The Board of Selectmen position: Save it
For the Board of Selectmen, the issue comes down to the fact that our budgets are structurally unbalanced — that is, we spend more money than we take in. Using stabilization money, they argue, just puts a band-aid on the problem.
“The use of one-time money continues to create structurally unbalanced budgets that are unsustainable and each year put us further in the hole,” Selectman Bill Boland said. “If we can’t bring in enough money to fund our budgets, then we cut our budgets, if we have to lay off teachers, firefighters, DPW workers, or police officers.”
The Selectmen say the guideline they use is to have at least 5% of the town’s budget held in reserve. Five percent of Southborough’s budget would be about $2M. “We’ve been able to do some very good things with reserves like fund the ladder truck,” Boland said.
Selectman Sal Giorlandino said that once taxpayers start using stabilization funds to decrease the levy, it becomes more and more tempting to continue to do so. “It’s a slippery slope that’s going to lead to us having zero dollars in stabilization,” he said.
Selectwoman Bonnie Phaneuf said instead of using stabilization funds to balance the budget, they have been asking town departments to make cuts in both operational budgets and capital items. As part of the cuts, the selectmen recommend not funding school technology this year, and reducing the road maintenance budget by $100K.
“Our department heads have stepped up to the plate. Every week came in with something more to cut,” Phaneuf said. “We’re all trying to do the best for this town.”