Massachusetts passed a law in 1980 that limits the amount of property taxes a city or town can collect. That law, known as Proposition 2 1/2 caps annual increases at 2.5% (plus new growth).  While this law was designed to keep taxes predictable, lawmakers anticipated that 2.5% increases would not always be sufficient to maintain city services. As a result, they gave the voters the power to approve local tax increases to fund the services they believe are necessary and valuable through overrides or debt exclusions.  An override increases the total tax levy amount and is best suited for operating and recurring costs. A debt exclusion is an increase that only lasts as long as it takes to pay off a specific large expense, like a building.  Over time, inflation has regularly exceeded the law’s 2.5% property tax limit, making it difficult for cities and towns to fund schools, public safety, and municipal services without seeking regular overrides to help bridge the gap. For this reason, many Massachusetts communities have needed to pass overrides in recent years, including our neighbors in Arlington, Belmont, Medford, Melrose, and Stoneham.

Winchester last passed an override in 2019. The override was designed to last three to four years. With conservative financial management and additional Covid funding, the town was able to stretch the override out for seven years. Despite those best efforts, the town has repeatedly faced a growing structural deficit of millions of dollars that it has funded through shrinking reserves.  With significant budgetary shortfalls looming, the town has spent much of the last year undertaking a State of the Town process to create a long-term, comprehensive plan for both our schools and town services. The process was led by the Select Board and included representatives from the School Committee, the Finance Committee, Planning Board, and Capital Planning Committee. In addition, seven at-large members brought diverse perspectives—from young parents to a former Select Board chair to a former superintendent of Arlington Public Schools.   Together, the group worked to build a plan that is rigorous, balanced, and forward-looking—one that supports strategic and essential investments in school and town services, supports growth of non-property tax revenue, minimizes impact on taxpayers, and rests on a foundation of strong financial stewardship. You can read the State of the Town’s findings and detailed report here.(https://www.winchester.us/1307/State-of-the-Town)  This report clearly lays out why an override is needed, alongside the many other steps the town is taking to minimize costs to taxpayers and put Winchester on a healthy and sustainable financial path. You can also find more details about why Winchester needs an override here.(https://www.yesforwinchester.org/why-an-override)

Click here (https://www.yesforwinchester.org/what-is-at-stake)to see what our town stands to gain - or lose - depending on the result of the override vote.

If the override does not pass, things will not stay the same. Costs will continue to rise while revenue stagnates, creating a larger deficit gap. There will be real and immediate cuts to our schools and the municipal services our residents rely on. And in the end, waiting will cost more money down the road. You can read more about what is at stake here.(https://www.yesforwinchester.org/what-is-at-stake) .

With significant budgetary shortfalls looming, the town spent much of the last year engaged in a State of the Town process to develop a long-term, comprehensive plan for both our schools and town services. The State of the Town Committee worked to build a plan that is rigorous, balanced, and forward-looking—one that supports strategic and essential investments in school and town services, supports growth of non-property tax revenue, minimizes the impact on taxpayers, and rests on a foundation of strong financial stewardship. You can read the Committee’s findings and detailed report here.(https://www.winchester.us/1307/State-of-the-Town) Based on those findings, as well as input from Town Meeting Members, Town Committees, and the public, the Select Board voted to place a $11.5 million override on the March town election ballot. You can read more about their decision here.(https://www.winchester.us/DocumentCenter/View/13271/Select-Board-Letter-and-Detail-on-State-of-the-Town-and-Override?fbclid=IwY2xjawQLHTpleHRuA2FlbQIxMQBzcnRjBmFwcF9pZBAyMjIwMzkxNzg4MjAwODkyAAEecq4czolk-CbnhidzmoqVvTJnHiKlz0r2lDUzhld6iTEWlT2_qpL5EqAtUJo_aem_YXUo9LKBQZhwxxuBYoslZg)

When costs rise and budgets can’t keep up, some “belt tightening” must occur. But Winchester has operated with a lean budget for years. At this point, further cuts would jeopardize our schools, our safety, historic town buildings, and public services [see what’s at stake](https://www.yesforwinchester.org/what-is-at-stake). Inflation has hit all city and town budgets hard in recent years, especially in key areas like transportation, healthcare, and construction. This is why towns all over the state have had to pass overrides in recent years, including our neighbors in Arlington, Belmont, Medford, Melrose, and Stoneham. Winchester has been able to delay an override for this long due to careful governance and strong financial management. The Town has regular turn-backs exceeding 1% of the budget, has nearly fully funded its pension obligations, and has created concrete plans to address our other long-term liabilities. Winchester’s government is well run from a fiscal standpoint: we are one of just 14 towns and cities in the Commonwealth to hold a AAA bond rating from Moody’s – and one of only two towns with our profile: a suburb of Boston with over 95% residential real estate.  Despite this responsible financial management, we’ve reached a point where an override is necessary to avoid substantial cuts to our schools and town services, and to ensure that our town remains the wonderful community we are proud to call home.

All Towns need healthy cash reserves (or “free cash”) to ensure financial stability, maintain high credit ratings (which lowers the cost of borrowing), and handle unpredictable expenses. Using free cash for recurring expenses year-after-year is unsustainable and at odds with the Town’s stated policies.  Even after the diligent work finding cost efficiencies that was part of the State of the Town process and the work of the Select Board and School Committee, the Town faces a deficit of over $5M entering the fiscal year starting this July. This means that if the override doesn’t pass, our town would need to burn through 25% of our $21M in free cash just next year to avoid damaging layoffs and substantial service cuts. And this $5M deficit is before we begin to tackle critical needs—from the investment in overdue curriculum and services in our schools to capital needs. If we were to include those expenses, we would likely burn $8M of free cash in a single year (more than one-third of our total reserves)—an unprecedented and reckless level of drawdown, something that neither Winchester nor any of its peers has done, even in the midst of major events like the COVID-19 public health emergency or the 2008 Global Financial Crisis.  Continued drawdown of our free cash reserves can also jeopardize our AAA bond ratings. Out of 351 cities and towns in the state, we are one of only 14 Moody’s AAA communities, and one of just two with our profile. This is not just a marker of our excellent fiscal management—it has real implications for the Town. If we were downgraded, all borrowing becomes more expensive; Muraco alone would likely cost $5M more from higher interest expenses.