December 15, 2005

In rural settings like Little Compton the cost of providing municipal services is bourn for the most part by real estate taxes. This reality sets the scene for an ongoing struggle between the people who want the Town to provide more and better services, and others who are saying no, no more. As our population is living longer and more people are subsisting on pensions and Social Security, the burden of increased taxes on folks on fixed incomes becomes more and more intolerable.

This situation has brought about something closely resembling warfare. On the one hand there are the parents of school aged children, on the other hand there are the grandparents living on fixed incomes and feeling as though they have paid their dues. Then there are the other municipal services; public safety; public road maintenance; refuse disposal; and the administration of the town, collecting taxes and the like.

Taxpayer revolutions are taking place all over the country. This began in California with the overwhelming passage of Prop 13 some twenty five years ago. Our neighbors to the north in Massachusetts passed Prop 2 ½ by a two to one margin, which also limits the annual growth of property taxes. Here in Rhode Island growth in spending increases by local government is limited to 5.5 percent.  There is a strong cry surfacing for a Voters Initiative Petition, once again California has pioneered that movement. Legislators in the various states and union members are strongly opposed to such measures and view them as threats. This November's election in California has more than 50 Initiative Petition questions on the ballot.

Home owners and renters love Prop 13… Here’s why: their property tax is based upon 1% of the purchase price of the home. This is true of rental property. The law limits the increased assessment to be no more than  2% per year.  Let’s say that you purchased a home today for $200.000 (you can still do that in many parts of California). Your taxes for the first year would be $2,000. The following year, if the assessment were increased by 2%, your property taxes would only increase by $40. This is a real plus for folks who intend to remain in their present home for long periods of time.

The Proposition 2 ½ bill that swept into law in Massachusetts did so because property taxes were jumping as much as 10 to 15 percent every year, forcing many people on fixed incomes out of their life long homes.

Unfortunately here in Rhode Island where there is no initiative petition, the legislature almost doubled the Massachusetts rate when the 5.5 % cap came into law. Rhode Island legislators are looking at a watered down version of most Initiative Petition Laws which, if passed, would still require a vote of the Legislature to put a measure on the ballot.

 The greatest opponents of the Initiative Petition are municipal employees, teachers, and union members. It does not take a rocket scientist to figure out why these folks are in opposition. Over the years municipal employees have organized and have built a firewall between themselves, the management, and the taxpayers of Cities and Towns. Teachers are clamoring for smaller class sizes, police and fire departments want more people and higher wages along with better benefits and retirement packages.

The initiative petition and bills like Prop 13 are part of a growing taxpayer’s revolution. The battle lines are being drawn. We saw indications of that at last Spring's Financial Town Meeting. Elected leaders are calling for a toning down of the rhetoric. We think that the Town Fathers are involved in wishful thinking. Future Financial Town Meetings need to be more effectively managed with strict adherence to Roberts Rules of Order as required by the Town Charter. The voting process needs to move into the 21st century to assure accuracy and to be conducted in a much more timely fashion.

The proponents of increased spending and the demise of the 5.5% cap were grinding away at the opposition, hoping that many would tire of the battle and retreat from the Town Meeting to the relative safety of their homes. Thus allowing the proponents to tax and spend out of all proportion and force the Town to enter into a costly court battle over the constitutionality of the 5.5 percent limit on spending. That’s what it’s all about.

One of the unfortunate by-products of any spending cap is that it appears to be a license to spend more money to run the town. As various department heads prepare their annual budgets all they have to do is add 5.5% to the previous year's numbers and present it to the Budget Committee, Town Council, and taxpayers at the Financial Town Meeting.  That is referred to in the vernacular as a “no brainer.” If you applied this method of budget creation to your business you would soon be unemployed.

Before you head for the Newport Bridge or stick you head in the gas oven, there has got to be a solution short of ending it all or simply moving out of town. The answer is to get involved.

Every year leading up to the Financial Town meeting, the Budget Committee holds frequent meetings that are open to the public. We attended many of those meetings last year and and noted that they could have been held in a phone booth. Virtually nobody shows up.

The Budget Committee members are the architects of the Town Meeting. They meet with the leaders of all town departments and wrestle with money requests that end up as Strokes on the official Town Meeting document. Because of voter apathy the Committee operates in a vacuum. There is little or no media interest which allows department heads a free pass. This process is flawed.

Much the same is true of other important meetings that impact upon the cost of operating the town.

Taxpayers need to show up at these meeting to clearly demonstrate to elected and appointed officials that we are watching, and will hold their feet to the fire. More fiscally responsible people need to run for elected offices. Not enough people ran for the 2005-2006 Budget Committee to fill all of the seats. The Town Council ended up appointing people to staff-up the Committee.

Next to the Town Council, the most important elected office is the School Committee. Clearly 60 percent of the cost of operating the town goes to the School Department. We desperately need conservative candidates to run. If you do not care to run for this important office, you need to carefully identify candidates who share your concerns and work hard and contribute to getting these folks elected.

The power of incumbency is awesome. It not impossible to unseat incumbents but it is very difficult. That means that you have to get involved in the process and work your tails off to get the job done.  If you allow incumbents to go unchallenged you are asking for more and bigger spending and higher property taxes to feed the "500 pound gorilla." If you are happy with things the way they are, then just go back to sleep.