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Supporters of Higher Taxes Use Lies and Misleading Statements

With the help of Tiverton 1st co-coordinator, Brian Medeiros, elected officials and others who support higher taxes in Tiverton have been promoting a 30-minute public access TV panel, mainly to bash Budget #2, the 0.9% budget that I submitted for a private-ballot vote at this Saturday’s financial town referendum.

As it happens, the Tiverton Taxpayers Association had sent a letter to me and to the Budget Committee, inviting us to discuss the differences between the budgets on a similar show, but nobody from the Budget Committee ever responded.  Apparently, they prefer being able to badmouth people who aren’t in the room.

Not surprisingly, the video is full statements that are false, misleading, or even outright lies.  Here are ten of them.

1. Town Council President Denise deMedeiros.

“The petitioner… hasn’t really been involved in the last year.  He hasn’t gone to any meetings.  He hasn’t talked to department heads.”

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There are three accusations, here, all of which are false.

1) I have been involved. I’ve done extensive research on various issues important to the town, some of them extremely technical and requiring a great deal of information and research involving the town. Indeed, I put up a transparency site that is, to my knowledge, the first of its kind for a town of Tiverton’s size in the world.  That’s just the tip of the iceberg of my involvement.

2) I have been to meetings. In fact, I’ve filmed some of them, particularly when there was no camera crew. I’ve also watched other meetings, in whole and in part, online. That’s why they’re filmed, so that busy residents don’t have to be secondary (unpaid) people at every meeting in order to be involved.

3) I have talked to department heads. Indeed, I’ll let Town Treasurer Denise Saurette respond to deMedeiros with a video of something she said to me at the FTH.

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Beyond all this, in compiling the 0.9% budget, I worked with three Budget Committee members, a Town Council member, and others who are very deeply involved in the operations of the town.

deMedeiros is correct that I didn’t act as a volunteer understudy for the $90,000-per-year town administrator and sit down with every department head. That is why the 0.9% budget increased the council’s contingency fund even though it would have been an obvious line to cut: in order to make up for small expenditures, like a couple thousand dollars in postage, that we may have missed.

2. School Superintendent William Rearick.

“[Mr. Katz] has never talked to us.”

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As a point of fact, Mr. Rearick, his business administrator, and I have have exchanged dozens of emails during this fiscal year.  To be sure, they usually try to avoid giving me any information for which I do not very specifically ask, but the communication is there.

3. Former Budget Committee Member Christopher Cotta

“There has never been a scintilla of abuse or misspending.”

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Really? What about Robert Martin? Or former administrator Jim Goncalo?  What about firefighter overtime? Another issue that hasn’t gotten as much attention is that the town administrator has implemented cards for town gasoline, and now that it can be tracked fuel use has mysteriously decreased.  Go figure.

By all appearances, Mr. Wojcik — under pressure from taxpayers who are insisting on lower taxes, don’t forget — has been reining some of this abuse and misspending, but to pretend that taxpayer concerns are a figment of their imagination is ridiculous.

4.  Town Administrator Matthew Wojcik

“You have to add in every single other item that you can’t change because it’s in a personnel contract, whether it’s with an individual or a union.  And everything else that goes along with it: The insurance benefits, the social security expenses, everything that you have to do because you have employees.  By the time you cut it all out of the budget [as well as debt], out of the $19 million, you’re down to about $2 million.”

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Mr. Wojcik is asserting that the biggest part of the budget — roughly $13 million, by the numbers he rattles off — simply can’t be cut, even though deMedeiros then turns around and talks about how the Town Council needs more money in its budget for raises because they’ve got four contracts up for negotiation.

Why is it that taxpayers and the direct services that they receive are the only things that aren’t supposedly untouchable?

5. Town Administrator Matthew Wojcik

“[Last year,} the town surplus was $222,719 for the whole town.”

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This is false or misleading for multiple reasons.  I’ll put aside the fact that the town’s audit actually put the increase in the general fund at $245,038, $241,284 in the unrestricted/unreserved category. The school department is also part of “the whole town,” and its unreserved balance went up $670,405, or $222,004 if only reserved/restricted funds are included.

The total surplus — new money put in unrestricted reserves in town government — was almost a million dollars, last year.  The average increase for unreserved funds for the past five years has been $605,711.

6. School Superintendent William Rearick

“We don’t have a million-five.  That was the audited number.  What we have is the school committee has taken $600,000 and reserved it for capital expenses and to help offset the cost to renovate the high school and the middle school.  Currently, we’re at $900,000.”

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Actually, if Mr. Rearick wants to include reserves that the school committee has set aside for capital expenses, then the schools are up to $1.7 million.  If he’s taking the $600,000 from that number, then the reserve is actually $1.1 million.

But even taking his $900,000 as the number, that’s just over 3% of the schools’ requested budget.  In a recent letter, the school committee and administration stated that they strive to maintain reserves from 0% to 3%, which means, even taking the $126,000 for the one-time local expense of full-day kindergarten out of the reserves, this year, leaves them near the high end of their desired range.

7. School Business Administrator Douglas Fiore

“[What the petitioner’s budget] is going to cause going forward is a structural deficit, and in the subsequent year, we’re going to have to fund all-day kindergarten again, and we’re going to have to ask, really, for an increase to get to where we already are, next year.”

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With the way Mr. Fiore presents this, it’s simply not true, for two reasons.

First, Fiore had just said that the school committee had wanted to go forward with all-day kindergarten because they had some “favorability” in special ed costs.

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In other words, the schools had increased their baseline budget to pay for something that they didn’t need anymore, so they had a structural surplus. I’m sure there are ways for them to muddy these waters, but the starting point for discussing the amount of that surplus is $600,000.

Second, starting with the 2016-2017 school year, the state aid will increase — because of full-day kindergarten — to an amount that almost entirely pays for full day K (within a few hundred dollars). I’ve confirmed this with both the state and with Mr. Fiore. This increase is in state law, and there’s no reason to believe it’s going to change.

So, the Tiverton schools found themselves with a structural surplus this year, and they want to increase their baseline by another $126,000 for the one year that they’re going to have to pay for a good portion of the full-day kindergarten cost, so that will be added to their structural surplus next year.

This isn’t about full-day kindergarten.  It’s about something else that the school department isn’t admitting, even if it’s just a desire to always take more money from the people of Tiverton.

8. School Committee Chairwoman Sally Black

“What S&P said was that the only concern that they had [for the town’s bond rating] was taking the six hundred out [of reserves last year] to balance our budget.”

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This simply isn’t true.  The most significant factor affecting the town’s bond rating was not the use of reserves last year.  It was that the town’s financial management is only “standard,” which they score as only “adequate.”  As I’ve written before, with stellar management, the town could have gotten to a AAA rating (the best) with its current reserves; with management only “adequate,” there was no way reserves could have brought the rating up to AAA.

S&P applies a simple formula.  The school reserves are a good example of how it works.  S&P mentioned in the report that the large school reserves provided the town some additional flexibility, but that did not count toward our bond rating because the schools keep it on their books instead of the town’s.

9. Former Budget Committee Member Christopher Cotta

“I don’t have an issue with the alternative referendum… but when you only have to have 50 voters when we used to have 300 people at a minimum come to a financial town meeting, it is kind of ludicrous that anybody can put a wild [blank]… guess.  It’s ludicrous that the town has to be dealing with this and then have to justify why your budgets are more appropriate and why they’re sound.”

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First of all, the 0.0% budget received well over 100 signatures last year, to get on the ballot, and the 0.9% budget received over 150. That’s practically enough to have won FTMs back in the day. More important, though, the people of Tiverton (1,234 of them) selected 0.0% by almost a two-to-one margin.

Second, what’s ludicrous is Mr. Cotta’s belief that elected officials shouldn’t have to go out and “justify” their budgets to the people of Tiverton. Frankly, that attitude is why the town is in the mess it’s in with its budgets.

10. All together.

The most pervasive theme of the video is that the town wants to have it all ways when it comes to the general fund reserve balance.  It’s important to note, by the way, that we’re only talking about the portion above the 3% required by the charter.  That leaves more than $1 million in reserves that nobody is talking about touching.

As shown above, Sally Black thinks the reserves should be held to keep up the bond rating.  Here’s Budget Committee Member Cecil Leonard likening use of the reserves to use of a credit card, which is truly odd, because reserves are money that the town has on hand. The real credit card is the debt, like the bonds that many of the same high-tax people pushed the town to add to its debt load.

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And yet, here’s Mr. Wojcik talking about how the reserves are really more like a savings account that we should put money into every year so that it’s there to “cushion” the blow when big expenses come in the future.

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Another way to say the same thing is that the town has to take the money from taxpayers now so it won’t have to take it from them later.  That’s actually a conversation worth having.  As I said in the midst of last year’s debate, higher reserves would be worth having if they were in a dedicated fund, or at least one that had some restrictions on its use.

At least at this time, the argument of the town government is that we should simply trust them to build up reserves to put toward important expenses that they haven’t adequately laid out, yet.  My preference is for the people of the town to keep that money in their own accounts, for now, while bringing down the tax rate to something that’s more in line with neighboring communities.  That should provide relief and aid in improving the economy in the town.

At one point in the TV show, Wojcik scoffs that $75 (or so) can be considered to be significant money to poorer families.  Maybe he’s been lucky enough to never be in the position in which that is significant, but he ignores that it’s year after year.  Increase after increase.

As I’ve pointed out before, when the tax rate gets to four or five dollars more per $1,000  of value — when it’s double or even triple the rates in neighboring towns — that gets to be real money for anybody.  Tiverton is at that point, and needs to turn around, even if town employees getting raises don’t like it.

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Justin Katz

Justin Katz is a writer and researcher focusing on Rhode Island policy and politics. For more about Justin, see our About page. justin@justinkatz.com (401) 835-7156.

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