To Fix our Town’s Deficit, Look to Labor Costs (By Bob Guerin)

While the Selectmen and School Committees regularly wrangle over how much can be cut from a sliver of their respective budgets — the percent that makes up non payroll spending — responsible politicians (and town department heads and managers) know that the real issue is payroll. 

Solving the Town’s budget problems would not only reduce the so-called structural deficit, but also improve the future job security of all town employees. 

Restoring balance to the Town’s budget would also make taxpayers feel more sanguine about their ever increasing property tax burden. The sad truth is that without any changes, payroll will soon consume 100 percent of the school’s operating budget (today it’s nearly 82%) — explaining why anxiety about the school’s immediate financial future is real and growing. The Town’s ever increasing payroll obligations are significant too. Eliminating the sizeable shortfall between payroll growth and tax revenue collections or regularly proposing and approving proposition 2 1/2 overrides are the only viable alternative solutions. 

The key question is: are our politicians and our labor unions ready to deal with our current fiscal reality? The Town’s payroll financing gap can only be closed by cutting benefits, slowing the rate of payroll growth, or raising taxes. Some of both will be needed for sure, but gone are the days of only relying on tax increases to solve spending problems. 

Simply put, more and more taxpayers just don’t have the ability to support tax increases. The National and local economy is a wreck and most households are struggling to maintain their homes and pay their bills. 

Solving the Town’s structural deficit is conceptually easy and it’s relatively manageable. Here are four major changes required: index payroll increases to the actual rate of tax revenue growth; gradually increase employee premiums for group health insurance; gradually increase employee health insurance co-pays; and, implement real retirement plan reform. 

A balanced plan of benefit and payroll reforms and tax increases can more than solve the Town’s structural deficit problem. While this plan is far from perfected — it can serve as a starting point. Restoring balance to our Town’s finances would make taxpayers and town employees feel more secure, increase confidence in our town finances and set a precedent for future sustainable budget growth. This is not a political game. Someone has to go first, put a real, actionable proposal on the table and implement real reform. This election cycle please be sure to vote only for candidates who understand both the problem and the solution.