Hoping to end an impasse with the city council, the mayor of Pittsfield, Massachusetts is agreeing to spend $1 million in unused tax revenue.
Mayor Linda Tyer gathered reporters Monday in hopes of ending a standoff with councilors looking to lower the impact of rising taxes in 2020.
“We are putting forward an order to appropriate an amount not to exceed a million dollars,” said the mayor.
The city already has $750,000 of free cash baked into its 2020 budget. The move comes after the council rejected Tyer’s plan for adding an additional $500,000 – as well as a compromise at $750,000 – at its November 12th meeting. The subsequent meeting Nov. 26th yielded no progress on the negotiation.
Now, before Tuesday night’s special meeting, the recently re-elected Tyer says she is unhappily agreeing to the $1 million.
“My concern has been that with every compromise we make, they change the target," said Tyer. "So we are willing to go up to a million but no more. If they insist on more than a million, they are going have a problem.”
If the city fails to send out February 2020 tax bills by the end of 2019, it risks facing a funding shortage for the first part of the year.
“I’m aware of the political dynamics that are at play here, and I’m more concerned about the risk to the city of Pittsfield than I am about winning this argument,” said the mayor.
Ward 2 councilor Kevin Morandi – who proposed the $750,000 compromise only to reject it for the $1 million plan proposed by Ward 6 councilor John Krol – made the rare procedural move of lodging a charter objection to prevent a vote on the compromise at the final November meeting.
“Obviously there’s a stalemate here," he told WAMC. "Obviously some of us really want to use that $1 million and really help the residents. We certainly have the opportunity to do that. We have the revenue – account in the stabilization fund we’re over $10 million so I think anything we can do to help the taxpayers I’m certainly willing to do.”
The projected tax rate increase under the $750,000 plan was 5.94% for the average homeowner – around $215.36. Raising the spending to $1 million in free cash will reduce that to 5.68%, saving the average homeowner around $10. Tyer says the city council is thinking in the short term, while her administration is thinking in the long term.
“It is because we are at our levy and we also have no ability to do a proposition 2 ½ override," said Tyer. "So if there is any significant emergency that impacts this community, we need those reserves in order to respond accordingly to any emergency that comes our way, because we cannot do a proposition 2 ½ override like most of communities in the commonwealth can still do.”
“Under Proposition 2 ½, communities are limited in the amount that they can raise their levy in any given year by 2.5%," said Pittsfield’s Director Of Finance Matt Kerwood. “It’s last year’s limit, times 2.5%, plus new growth gets you to your new levy limit.”
The tax levy is the amount that needs to be raised through taxation to fund the municipal budget. The city is currently projecting the levy at around $89.8 million for fiscal year 2020. The levy ceiling is the maximum amount the city can raise through taxation.
“Under the law, your levy limit can never be higher than your levy ceiling," said Kerwood. "So given that we’re at our levy ceiling, our levy limit automatically becomes our levy ceiling and the levy ceiling automatically becomes our levy limit.”
In Kerwood’s opinion, the city should keep its $6.3 million in free cash as savings in the event of a recession.
Councilor Krol – who will exit city government after a decade in January – told WAMC that he applauded Tyer’s move, and chalked up the entire exercise as a healthy representation of checks and balances.
“This is the number that I had stated right from the beginning is $1 million, so I’m completely satisfied with that,” said Krol.
Ward 4 Councilor Chris Connell – who was opposed to the first two figures presented by the mayor – confirmed to WAMC that he too would support the proposal.
