Fiscal Year 2024 Budget, 2023 Annual Town Meeting & Election

ClearGov- Budget Overview

2023 Annual Town Meeting Warrant

The Community Preservation Act tax in Groveland is 3% of your annual property tax on your home. All the tax collected gets matched by the State each year. Groveland has consistently received among the top 25 communities in the state with CPA, a large match amount due to our demographics and our 3% rate. (Each of the 187 communities in the state with CPA receive different matches based on these factors. Communities can choose a 1, 2, or 3% rate when they approve the CPA.)

The Community Preservation Act provides new funding sources which can be used to address four core community concerns: acquisition and preservation of open space, creation and support of affordable housing, acquisition and preservation of historic buildings and landscapes, development of outdoor recreational facilities.

Proposition 2 1/2 is a law passed by the voters in 1980 which limits an increase in the tax levy (the total taxes raised to no more than 2 1/2 percent of the previous year’s tax levy). For example, if the tax levy for the previous year in a community was $10,000,000, that community could not increase taxes more than $250,000 or 2.5 percent of $10 million. Proposition 2 1/2 places constraints on the total tax levy raised by a city or town and on how much the tax levy can be increased from year to year.

A levy limit is a restriction on the amount of property taxes a community can levy. Proposition 2 1⁄2 established two types of levy limits:

• First, a community cannot levy more than 2.5 percent of Total Taxable Property (the total full and fair cash value of all taxable real and personal property) in the community. This is the levy ceiling.
• Second, a community’s levy is also constrained in that it can increase no more than 2.5 percent from year to year. This is the levy limit. The levy limit will always be below, or at most, equal to the levy ceiling. The levy limit may not exceed the levy ceiling.

Proposition 2 1⁄2 does provide communities with some flexibility. It is possible for a community to raise taxes above its levy limit or its levy ceiling on a temporary basis by debt exclusion, as well as to increase its levy limit on a permanent basis by an override.

A levy limit override increases the amount of property tax revenue a community may raise in the year specified in the override question and in future years. It increases the community’s levy limit and becomes part of the base for calculating future years’ levy limits. The result is a permanent increase in taxing authority. G.L. Ch. 59 §21C(g).

The purpose of the override is to provide funding for municipal expenses likely to recur or continue into the future, such as annual operating and fixed costs, although it may be used for any municipal spending purpose. The only limitation on the amount of the override is that the new levy limit, including the override, cannot exceed the overall Proposition 2½ levy ceiling of 2.5 percent of the community’s full and fair cash value.

A debt exclusion increases the amount of property tax revenue a community may raise for a limited or temporary period of time in order to fund specific projects. The amount of an exclusion may be raised in addition to the community’s levy limit. It does not increase the community’s levy limit nor becomes part of the base for calculating future years’ levy limits.

The exclusion may be used to raise additional funds only for a capital purpose, which is defined as any purpose for which a city or town is authorized to borrow under G.L. Ch. 44 §7 and 8. This would include most public building and public works projects, as well as land and equipment acquisitions.

The current override proposed is $1,250,000.  

The current tax rate is $13.13.

Proposition 2 1/2 sets the maximum amount of property taxes (the levy) that the town can raise.

Once the amount to be raised is determined, a tax rate is calculated by dividing the amount to be raised by the total valuation of the town.

Whether the tax rate for the community will increase of decrease from the prior year will depend upon the levy decided upon by the community: it also depends on whether property values appreciate, depreciate, or remain steady in the community.

These funds would be used to fund a portion of the Pentucket Regional School District annual assessment.

The Town cannot fund the total Pentucket Regional assessment with the budget assembled for Fiscal Year 2024. The Town budget without the PRSD operating assessment proposes to increase only 3 percent from Fiscal Year 2023 and there are uncontrolled costs such as property and casualty insurance, health insurance, and utility costs.  It should be noted the current budget level funds the PRSD base assessment at $10,192,246 and includes funding the Pentucket Capital Assessment at $2,258,585.  

The Pentucket Regional School Budget must be approved in accordance with M.G.L. Chapter 71, Section 16B, which states, the annual regional school district budget as adopted by a two-thirds vote of the regional school. Therefore, if two of the tri-towns fund the assessment and the other town cannot, a subsequent town meeting would be called to reduce the Town operating budget passed at the annual town meeting to fund the Pentucket Base Assessment. However, if two of the tri-towns cannot fund the assessment the School Committee will be forced to reduce its budget and provide a new assessment.

The town has not passed an override since 2007. However, there have been debt exclusions passed in 2019 (Pentucket Middle/High School), 2017 (Fire Truck Purchase) and 2015 (Center Street Purchase). While a debt exclusion is not the same as an override, an exclusion increases the amount of property tax revenue a community may raise for a limited or temporary period of time in order to fund specific projects.

It would be impossible to guarantee that no override would be proposed in the future. However, unless there is an unforeseen expense, it has not been a position of the Board of Selectmen and Finance Board to pursue overrides in the community, which can be seen in the lack of requests in prior years.

The Town bonds/borrows the funds needed for capital projects like new radio equipment, vehicles, and building upgrades which will be paid out of our debt service in our operating budget. These loans must be paid back with interest, and those payments must be made from our operating budget. Without the additional funds from an override, these additional loans would increase the Town’s debt to levels that a balanced budget could not cover without threatening our AA+/Aa2 bond rating, or cutting programs or services to make the loan payments.

By law, 10 percent of CPA funds must be reserved for each of the three main purposes: Open space, historic preservation and affordable housing. Up to 70 percent can be spent on recreation or any of the three purposes. These funds cannot be used for any other purpose. There is no way to “suspend” CPA. The only option is to revoke CPA or lower the surcharge the same way in which CPA was adopted in the community back in 2005. State CPA trust fund provides communities with an annual matching contribution based on the amount of CPA funds raised locally. Groveland now received an 82.5 percent match from the state.

Revoking or reducing a CPA surcharge eliminates or reduces a guaranteed funding source that can benefit the Town and individuals. Without CPA, communities must rely exclusively on private fundraising or a tax levy without a state match to fund community housing, historic preservation and open space and recreation needs. Especially in a tough economy, CPA helps municipalities balance funding among these needs, and reduces the financial competition with other community needs such as fire, police, schools, maintenance, and public works, including infrastructure.

Valuation in Massachusetts is valuation at “full and fair cash value,” defined as the amount a willing buyer would pay a willing seller on the open market. Proposition 2 ½ does not limit any individual property tax increase or decrease. The limit only applies to the grand total, or aggregate, property tax that a community raises. Depending on relative property value changes, taxes on a single property can change by greater amounts than 2.5 percent. Changes in property values determine how the overall tax is apportioned across the taxpayers. The tax rate is calculated by dividing the budget by the value of property.

• PENTUCKET BASE ASSESSMENT: $11,442,246
• PENTUCKET CAPITAL ASSESSMENT: $2,258,585
• WHITTIER VOCATIONAL-TECHNICAL ASSESSMENT: $647,000
• ESSEX TECH: $191,000

This is based on the drafted budget. The final budget still needs to be approved by the Finance Board and Board of Selectmen. 

TOTAL BUDGETED *DRAFT $22,828,632 *WITH OVERRIDE

• PUBLIC SAFETY: $2,293,460
• GENERAL GOVERNMENT: $2,305,596
• PUBLIC WORKS: $1,751,944
• UNCLASSIFIED: $894,212
• DEBT SERVICE: $376,340
• LIBRARY: $347,121
• HUMAN SERVICES: $321,130

• PROPERTY TAXES: $18,978,674 
• LOCAL RECEIPTS: $1,455,908 
• STATE AID: $1,196,164 
• OTHER FINANCING SOURCES: $180,625