An Unclear Tax Future Makes the Rec Center an Irresponsible Investment

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by

Jane Snow

On May 13, residents will vote on funding an $8.3 million Recreational Center. This amount does not include furnishings, gaming/sporting equipment or any recreational materials. The city is referring residents to a tax calculator on its website to understand what the project will cost them. For me, it was $51 based on my current property assessment. For 30 years I will pay additional taxes, but the amount will rise every year with my assessment.

The city’s tax calculator also shows that extra taxes of $36 per year for the high school renovation will end this year and suggests I count that as a “savings.” But for the next 10 years, I will still be paying for previous debt exclusions for the Bresnahan school, the Nock/Molin school, and the Senior Community Center. About $404 per year.

There is no mention that the high school and middle school need new roofs now. The current estimate for this is $3.3 million. There is no mention that our wastewater treatment plant requires at least $4.65 million for critical upgrades, a fact just presented to the city council on April 22. Both of these projects will require borrowing. And they are not the city’s only needs.

On April 26 Mayor Reardon, speaking on “Local Pulse,” talked about the city’s new budget, which will start on July 1. He said the city recently learned there will be a 14.5% increase, $2 million, just for staff health insurance.

Mayor Reardon also talked about capital spending projects, including $68 million for our water system. None of the projects he discussed have funding.

The mayor’s proposed budget and capital spending plan will not be officially submitted to the city council and residents until May 12, although early voting for the recreational center began on May 3.

Why is this so important to me? Because there has been no time for residents to digest and ask questions about the coming budget and tax rate before agreeing to add taxes for a recreational center. Or to understand what other debt exclusions, extra taxes for essential projects, we will face within the next five years.

Jane Snow
Newburyport resident

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Comments

5 responses to “An Unclear Tax Future Makes the Rec Center an Irresponsible Investment”

  1. Beth Trach Avatar
    Beth Trach

    It’s a common misconception that individual taxpayers’ share of the Rec Center debt exclusion will rise with their assessments. While this may be true of their standard taxes within the levy, a debt exclusion—like the one we’re voting on—is different. Here’s how it works.

    First, the bond (loan) amounts for the Rec Center are set at a fixed interest rate over a fixed period of time. This functions like a home mortgage, so the principal and interest are added together and spread evenly over 30 years. The city therefore has a predictable, stable amount to pay each year for the Rec Center.

    That stable amount to pay is then divided among assessed properties each year. An individual homeowner’s share of that amount depends on their assessed value *relative to their neighbors’ assessed value*. When all property values rise together, individual shares remain relatively stable *in comparison to each other*.

    The only way an individual would pay a larger share based on their assessment is if their assessed value shot up faster than their neighbors—perhaps due to a home addition, new garage, or swimming pool. If that happens, their share would rise by a few dollars per year, but their neighbors’ would fall—again, because this is a relative amount.

    So while it is true that the essayist’s taxes may continue to rise each year, it’s not because of the excluded debt that we are voting on. That amount is predictable and, barring any major home improvement projects, stable.

    Reply
    1. LORI WISWELL Avatar
      LORI WISWELL

      So no one should improve their property in order to maintain the $55 per year override? That’s an interesting argument. But I don’t believe that anyone has mentioned this prospect before which continues to lead me to believe that the misinformation that is coming from city hall is more nuanced than first thought. I don’t want to be penalized because I am going to renovate my bathroom in the next 30 years. $55 is a lie all the way around.

      Reply
  2. David L Shepard Avatar
    David L Shepard

    I believe that Jane Snow’s comments and Lori Wiswell’s comments hit the proverbial nail squarely on the head!
    We, the taxpayers of Newburyport need more time to digest the many known existing capital expenditures as well as the upcoming expenditures such as new roofs for the Middle school, NHS and upgrades to the wastewater treatment plant, let alone any unforeseen catastrophic emergency expense that may happen, and emergency expenses do happen.
    After thoroughly investigating all of current and future expenditures, the evidence will establish how financially burdensome and unnecessary a new 8-million-dollar (plus) recreation center will be…..now, or in the future.

    Reply
  3. Jim Higgins Avatar
    Jim Higgins

    Simply put, public education is everyone’s responsibility.
    After school childcare is not!
    I’m voting NO!

    Reply
  4. Warent Russo Avatar
    Warent Russo

    Important infrastructure repairs are being ignored while our amateur “mayor” pursues something that he can put his name on, i.e. a “rec center” no one needs. This is malfeasance in office and must be rejected by all responsible taxpayers.

    Remember, Proposition 2 1/2 was created to stop irresponsible municipal officials like ours from spending taxpayer money on pet projects like this one. Do not be deluded by municipal wordspeak: A debt exclusion does not exclude anything. It is a DEBT, and you will be paying it back for decades. So-called “Free Cash” is NOT free cash! It’s your tax money that has not yet been spent!

    Newburyport has a wealth of educational and recreational opportunities for kids — playgrounds and sports fields, school teams, clubs, Boy Scouts and Girl Scouts. The Public Library has meeting rooms of various sizes that go unused most days, and the YWCA offers a range of wholesome activities beyond teaching kids how to swim.

    The so-called rec center is mostly Reardon’s gift to the PickleBall crowd to get their votes in the next election. The cost numbers being promoted are a blatant lie, just like everything else that comes out of the mayor’s mouth.

    In the spirit of Proposition 2 1/2, this self-serving project by our incompetent mayor must be rejected. Andrea Egmont and her team do not need a $8 million dollar building to get kids to put down their cell phones and start moving.

    Let’s start fixing what’s broken in Newburyport — that’s what tax money is for!

    Reply

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