It looks like your typical, frugal
Yankee town hall from the outside, but inside Boxford Town Hall, there
is a golden secret.
When the town's money managers
closed out their books for last year, this little town of about 6,500
found itself with almost $1.3 million in surplus taxes, the most it
has ever had in its 314-year history. A generation or so ago, that is
about how much it cost to run the whole town for a year.
Boxford is not alone in its
record-breaking bounty.
Across the Merrimack Valley, and
statewide, cities and towns are sitting atop stashes of surplus taxes.
It is a remarkable turnaround from the dark days of the early 1990s,
when the economy was sour and many towns were millions of dollars in
debt.
These days, the state is pouring
money into local coffers at unprecedented rates, while local business
growth and housing construction -- not to mention tax increases
approved by voters -- pump in even more.
But it has raised a conundrum for
some town officials: What do you do with an embarrassment of riches?
Like their counterparts in the
Massachusetts Statehouse, town officials are struggling to find a
happy meeting ground between giving their town a comfortable financial
cushion to guard against bad times, spending money on projects that
have been shelved for years and giving taxpayers a little break on
their property tax bills.
"Those economic times in the
early 1990s were very damaging; the money was flowing in nothing near
what is flowing in today," said North Andover Selectman and state
Rep. David M. Torrisi. "There's revenue coming in at all
levels."
There are few places that have seen
as dramatic a turnaround as his town. In 1991, things were so bad the
School Department cut the entire sports program, and residents had to
raise the $250,000 to pay for it privately.
The town stayed about $2 million in
debt for a few years, while voters defeated a handful of attempts to
raise their property taxes above the 2.5 percent yearly increase state
law allows.
Things started to change in 1996,
when the town found itself with over $1 million in extra money. The
surplus has hovered around that figure ever since.
The question now is what to do with
it.
"We still have some major
infrastructure needs," said Rep. Torrisi, referring to plans for
a new police and fire station. "Education is also a priority.
There's no question the School Department has a very ambitious plan to
get up to par."
So far, North Andover has not
considered using its surplus for tax breaks.
When it comes to surplus cash,
Andover has skyrocketed from the middle of the pack to the second
richest town in Essex County.
It has a little over $5.3 million,
compared to the $278,000 it had in 1991. It ranks just below Peabody,
which has historically run surpluses of $5 million or more. This year
it has $6.5 million.
Andover Selectman Chairman William
T. Downs attributes the change to the economy and good management.
He said at least $2 million will be
used to limit increases in property taxes. Most of the rest will be
kept in order to maintain a high bond rating, which lowers the town's
cost of borrowing money. Some will be used to pay for building
projects in the future.
"There's always pressure about
how to spend the money," he said. "The thing I worry about
is having a big debt."
Some of the most dramatic turn-arounds
happened in Amesbury, Haverhill, and Lawrence. All three were millions
of dollars in debt in 1991, and now they are firmly in the black
financially.
In his 26 years in city government,
Haverhill City Councilor George Dekeon cannot remember a time when the
city was in the black -- until now. It has just over a $1 million
surplus, compared to a deficit of $3.3 million in 1993.
"Financially speaking, we do
have a lot of debt, but at the same time we're in the black, and
that's good," he said.
That is a notable achievement for
what is perhaps the only community in the state that has a city-owned
hospital and nursing home.
"They're not moneymakers,"
Mr. Dekeon said.
Like Andover, Haverhill is using
some of its money to lessen the growth of taxes, some to buy needed
equipment like a fire pumper and the rest to stash away for a
"rainy day."
In 1992, Lawrence struggled under a
$5.2 million blot of red ink. Last year, it showed a $1.5 million
surplus. City Council is considering a small tax cut, about $12 for
the average homeowner.
In Amesbury, about half of the $1.4
million will be used to cut taxes, which translates into $44 for a
home worth $150,000.
"You just have to be cognizant
that things can change," said Mr. Dekeon. "There's always a
cycle of ups and downs. I just hope it stays like this for a
while."