Override 2024: Why I'm Voting Yes Next Week
“The City of Melrose has passed only one operational override in the last 30 years. That was in 2019. The previous successful override was in 1993. Unfortunately, this is not frequent enough to sustain what we need in the face of the constraints of Proposition 2 1/2. A community like Melrose should be considering operational overrides on a more regular and consistent basis so that our city services and schools can keep up with what our community needs and deserves.”
Mayor Grigoraitis, memo to City Council requesting override question
Next week, on June 18th, the city’s residents will be asked to vote on a $7.7M override request put forth by Mayor Grigoraitis. This request comes after she instituted a series of citywide budget cuts salary/hiring freezes in order to create a balanced budget for FY25. In the run-up to the 2023 mayoral election, I predicted that her election would be a boon for transparency within the community, and I think she’s made good on that. She’s passing a balanced budget and clearly laying out a spending plan for the proposed override funds.
Proposition 2½, for better or worse, directly challenges taxpayers to raise rates on themselves in order to fund improved city services. Whether or not communities can afford this often comes down to demographics, and this election will be another test to see how much Melrose has shifted in the past five to seven years. Personally, I’d like Melrose to compete with wealthier communities for staff, and I’d like our real estate market to compete with wealthier communities for future residents. I understand this approach costs money, and on balance, I think the benefits of this request exceed the costs, which is why I’m voting yes. I can’t be sure of this - nobody can. But Melrose’s long local history of denying overrides has, in my opinion, yielded few apparent long-term positives, aside from residential tax rates that sit at a near twenty-year low. We can, and probably should, strive to do a little more.
Proposition 2.5: A Very Brief History
While most Massachusetts residents are probably familiar with the “Taxachusetts” moniker, many are likely unfamiliar with its origins. It arose during the mid- to late-1970s, when the state really did have one of the highest tax rates in the country. Homeowners, feeling particularly burdened by growing property taxes, pushed back with a citizen ballot position, Proposition 2½, which capped both the rate at which property taxes could increase year over year and the overall amount that a city could collect. It passed in 1980, with 56% support, and went into effect for FY82. The most immediate effect was that many communities needed to actually cut their total budget and lay off employees, to bring their overall levies below the maximum (Melrose was one such community).
To avoid calamity, the state legislature responded by sending more state tax money to cities and towns. This was possible in large part because the state economy was entering into growth phase, fueled largely by increased defense spending and microchip demand, much of which wound up in the state’s infamous Route 128 tech belt. The dynamic would be dubbed the “Massachusetts Miracle,” and it played played a major role in Governor Dukakis’ infamous 1988 presidential run.
It wouldn’t last. The U.S. entered a recession in 1990, and the state responded by cutting aid to cities and town — aid which cities and towns had quickly become dependent on. Facing deficits, many communities turned for the first time to the prospect of overriding the 2.5% limit. In 1984, just 31 override questions appeared statewide; in 1990, that number rose to 538. Much of the controversy surrounding Prop 2½, and the fights about where to cut costs at the local level, came immediately back to the surface.
Proposition 2.5 Comes to Melrose
Melrose responded to these conditions in the same way as many other communities: starting with cutting school expenditures. In 1990, Melrose’s proposed school budget was $18.8M, the equivalent of $45M in 2024 dollars (relatively similar to current funding levels). That spring, the School Committee and Board of Aldermen were proposing a $2M overall reduction in the school budget, including layoffs of over two dozen teachers. In response, over 450 Melrose Middle & High School students staged a classroom walkout. A group of over 300 of them marched to city hall, and four were arrested. That October, the city did put five override questions on the ballot: three for school spending, one for roads/sidewalks/trees, and one for a fire truck purchase. All five questions, which carried a total price tag of $1M, were overwhelmingly defeated by voters.
Unsurprisingly, the following spring, the city faced a $3M deficit — the equivalent of a $5.5M deficit in 2024 dollars — despite slashing dozens of jobs. Rumors were swirling that the state’s Department of Revenue was considering placing Melrose’s finances under state control. After 20 years in office, Mayor Milano announced that he would not be seeking reelection. In a wide-open race, Jim Lyons, who campaigned on the need for a do-or-die $3M override question, was elected mayor. True to his word, he placed a $3M operating override on the ballot, and it passed by fewer than 400 votes.
Since then, the city’s fortunes have often depended largely on state aid. Mitt Romney would take office in 2003, following the attacks of 9/11 and the bursting of the dot-com bubble. As governor, he embarked on a campaign of spending cuts, including reductions in local aid. In 2003, then-mayor Rob Dolan announced a budget gap of around $5M, and a corresponding $5.3M override request. That request was overwhelmingly defeated, 70%-30%. The city was forced to shutter a number of its fire stations and lay off public safety personnel; it also permanently closed the Beebe School, having closed Ripley just a few years earlier. The school budget continued to contract — in 2004, it was the equivalent of $36M — and the school committee voted to end the neighborhood-based approach to elementary assignments. Voters did approve, by a 700 vote margin, a debt exclusion to build a new middle school, after the old building’s flooding issues became unmanageable.
Dolan appeared to take the 2003 override defeat as a clear message. During his long tenure, he would not propose another override until 2015, when a “proactive” override question, largely to fund more school services, was put before voters. This was once again soundly defeated, with 61% voting “no.”
Enrollments, Enrollments, Enrollments
All of this history has happened against a backdrop of major changes to public school enrollments throughout the greater Boston area, beginning in the 70s. It’s difficult to imagine, but in 1972, Melrose had 7,041 students enrolled — about twice as many as currently. A major decline in enrollments ensued thereafter across the metro region, as family sizes shrunk and housing production (and sales) slowed, causing younger families to move further afield to find affordable places to raise children. By 1987, enrollments in Melrose were down to 3,945 (it was during this period that the city closed the Washington and Coolidge elementary schools and sold the properties). Enrollments would bottom out around 3,500 in the 90s and early 2000s before gradually beginning to creep back up in the 2010s.
That trend of declining enrollments meant that the city could, to a certain extent, keep paring away at the school budget despite rising per-student costs. There were limits to this approach, though, and when enrollments again began to creep up in the 2010s, the school budget was forced into annual deficits, with the city relying on repeat free cash allocations in order to “balance” the budget each year. By 2018, a majority of voters had tired of this charade, and in April 2019, a school-focused $5.18 override was passed, 6079 to 4875. This is part of what makes the now-infamous badly fumbled FY22 accounting fiasco particularly frustrating, because it once again forced the city into needing to use free cash (and ARPA funds) to close out the books. Mayor Grigoraitis’ FY2025 budget has made cuts across the board to, essentially, undo this error, and the district has confirmed with outside auditors that its DESE accounting practices are sound.
It’s essentially impossible to predict future enrollments, particularly post-COVID, though that hasn’t stopped people on both sides of the debate from commenting on it. My perspective is that voters miss the forest for the trees when viewing enrollments under a microscope. In reality, Melrose has been shirking on per-student spending for a long time. In 2019, the year prior to the last override, DOE ranked Melrose’s per-pupil expenditures second-to-last in the entire state, ahead of only Dracut, a majority-Republican community on the New Hampshire border that is shutting off its water parks in response to a growing, multimillion dollar budget deficit. While educational outcomes obviously do not scale directly with per-pupil expenditures, and district spending comparisons are not all apples-to-apples, by just about every available measure, the system is underfunded compared not only to other local systems but to state averages overall.
This, to me, is where the biggest value of the override can be found. Even holding enrollments relatively constant, the district should be considerably more ambitious about the quality of our local school system and about retaining our best teachers through more competitive funding. We should really have very high expectations for the performance of our public school system, and it’s not realistic to expect greatness when you’re being outperformed on spending by peers, especially when so few teachers can afford to live in the community we’re asking them to invest their careers in. Part of this is inevitably paradoxical, because the better we make our schools, the higher our property values will be, keeping many of those same teachers from living here. As we make these investments, we should demand more of the school committee and the district administration, to make sure we’re actually seeing corresponding improved outcomes.
Capital, City Costs, and Everything Else
A key promise made by the architects of Proposition 2½ was that the spending cap it imposed on cities and towns would force municipal governments to become more efficient in their spending. This simply hasn’t happened. Municipal governments are persistently caught between state and federal spending mandates on the one hand (Melrose cannot simply opt out of educating costlier students), and on the other hand, the reality that it can be extremely difficult for local residents to agree on what “efficiencies” really look like. Proposition 2½ doesn’t provide us with a rubric for solving cost-benefit questions. We just do less with less. A company might respond to budget constraints by selling off unprofitable units. But Melrose can’t exactly sell off a street whose servicing costs outweigh the property tax revenue and local receipts it brings in, or opt to withhold police services from certain parts of town. Furthermore, the city really does seem to be having problems staffing its fire department, and short of some sort of major reshuffling of its police and fire operations, it has no apparent funding source outside of the override to meet upcoming contractual obligations.
Many of the capital decisions made by the city in recent decades, such as closing the Ripley and Beebe schools, likely would have been made with or without Proposition 2½. Other larger investments, such as the debt exclusions for the Middle School and the Public Safety Buildings will always require special elections anyway. The annual budget affords extremely little room for even smaller capital investments, and we are generally forced to borrow money (at whatever interest rates the market demands) for things like building repairs. This is why many of the city’s assets tend to be in pretty bad shape.
Is there a lot of unnecessary spending elsewhere, in the day-to-day operation of the city? Not particularly. All of the city’s budgetary line items are reviewed annually by the City Council, and the council has historically taken a fairly conservative view on spending priorities. If there were opportunities for cuts, they’d happen here, but city council cuts are very rare. The lack of obvious opportunities for cost-saving is also why you’ll never see any participation in the annual budget process, ever, by anyone from the “Melrose Taxpayers’ Alliance,” or “Keep Melrose Affordable To All,” or whatever association happens to be fighting any particular override request at any particular time. These are not efficient-spending groups, they are simply low-tax proponents. Yes, sometimes opportunities arise to phase out spending, but these are often offset by emergent needs. A century ago, Melrose had an Inspector of Slaughtering and a Superintendent of Gypsy Moths. Residents no longer demand these services, but this override, for example, creates funding for a Director of Sustainability and a Director of Economic Development, positions the city would be well-served by in the current century.
Conclusion
There are plenty of areas of the city budget that taxpayers should be concerned over. We have more buildings than we can afford to take care of, now and in the future. The city operates 84 miles of roadway, but unlike water and sewer, it cannot charge use fees, and hence it is entirely dependent on state funds to maintain them. If the override does not pass, the city will have no IT capital budget, virtually assuring that within the coming decade it will fall victim to a costly cyberattack. Our overall balance sheet is negative owing to unfunded future pension liabilities. Many of these issues plague municipal budgets statewide, and require statewide action. Voting “no” on an override request to force more layoffs, or more hiring freezes, or less capital maintenance, does virtually nothing to address these long-term structural issue and only makes short-term services worse.
Yes, property taxes often tend to be regressive, and Melrose, as an overwhelmingly residential community, is highly sensitive to the problems inherent with its main source of revenue. One of the primary downsides of Proposition 2 1/2 is that it creates winners and losers. Communities with relatively wealthier residents — i.e. those who are more easily able to afford tax increases — can adopt more, or larger, overrides than less-wealthy communities, whose residents may be less likely to support tax increases. This is an obvious subtext behind the situation in Melrose, where property values have skyrocketed over the past decade. This means Melrose’s tax base is considerably wealthier than it was even a decade ago, though for many reasons, that paper wealth does not always translate to an increased ability to pay annual taxes. Voting “no” will not solve this problem, either. In my view, the two options are to spend money investing in better services, or to save money by making cuts. In the absence of a clear reason for doing so, I just don’t think you can cut your way to a better Melrose. I’ll be voting yes on the 18th.
Any word on the result? I have unsuccessfully been searching for results on the web. I actually found your Substack before I found any result announcement, which feels bizarre!