SOUTH SHORE MUNICIPAL REVENUE 2012

Transcription

1 2012 MERC PUBLICATION SOUTH SHORE Cohesive Commercial Statistical Area MUNICIPAL REVENUE 2012 By Mary Phelan, M.B.A., C.P.A. Beverly Soriano, M.S., C.P.A. With assistance of MERC interns: Nicole Coccoluto, Intern II Aaron Marshall, Intern II December 2012

2 Copyright 2012 Framingham State University No material from this publication may be reproduced in whole or in part without the permission of the MetroWest Economic Research Center, Framingham State University. MERC provides regional economic data. MERC takes no position on policy issues at any level. METROWEST ECONOMIC RESEARCH CENTER At Framingham State University 100 State Street, Framingham, MA FAX:

3 INTRODUCTION The South Shore Cohesive Commercial Statistical Area (CCSA TM ) includes eleven communities located between Boston and Brockton. Anchored by Braintree, Quincy and Weymouth, the South Shore CCSA has a population of more than 328,000 and a public school enrollment of more than 42,000. Long a major retail center, the South Shore is a vibrant and economically diverse region that has emerged more recently as a center of financial services. Prominent South Shore institutions include: State Street Bank, South Shore Hospital, Quincy Medical Center, The Stop and Shop Companies, and Talbots. The new South Shore Tri-Town Development Corporation is also located in the South Shore CCSA. The region enjoys convenient access to several major highways including I-93, I-95/Route 128 and Route 3. This publication presents municipal revenue data and analyses and K-12 public school enrollment for the South Shore CCSA. Municipalities report budgeted revenue, actual revenue and actual expenditures to the Massachusetts Department of Revenue (DOR), Division of Local Services (DLS). MERC at Framingham State University uses the underlying information to prepare analyses for the local region. Budgeted revenue is presented in this report. Revenue consists of the total tax levy, state aid, local receipts and an all other category. Local receipts include motor vehicle excise taxes, licenses and charges for services. The tax levy consists of assessments on personal property, open space and industrial, commercial, and residential real estate. Personal property includes furnishings of second homes, some inventories and equipment of utility companies and unincorporated businesses. Tax levies are subject to limitations imposed by related legislation. For additional information on local taxing options, please see the Appendix. Public school enrollment is calculated for kindergarten through grade 12 using the annual classroom census conducted in October each year, and reported to the Department of Education. Included are all public school students in regular education, special education, regional schools and regional vocational high schools. Student enrollment for charter schools is also provided. 1

4 TABLE OF CONTENTS INTRODUCTION 1 TABLE OF CONTENTS 2 MUNICIPAL REVENUE OVERVIEW 3 MUNICIPAL REVENUE Growth in Municipal Revenue FY2000-FY Total Revenue Components FY2000-FY Components of Revenue FY2012 SS & FY2011 MA 6 Revenue and Tax Levy Components FY Revenue per Capita FY2000-FY Revenue by Source FY FY2012 Tax Levies by Municipality 10 Municipal Revenue per Capita by Community FY Single Family Average Tax Bill & Assessed Value FY2000-FY Single Family Average Tax Bill Nominal and Real FY2000-FY FY2012 South Shore Tax Rates 14 FY2012 Single Family Average Tax Bill 15 State Aid in Selected Categories FY State Aid per Capita by Community FY General Fund Expenditures FY General Fund Expenditures by Community FY FY2011 Educational Expenditure by Community 20 Debt Service by Community FY2010 & FY Fixed Costs by Community FY2010 & FY K-12 PUBLIC SCHOOL ENROLLMENT OVERVIEW 23 K-12 Public School Enrollment 2001 & K-12 Public School Enrollment 2011 by Community 25 K-12 Public School Enrollment 2001 by Community 26 K-12 School Enrollment by Year 27 Enrollment as a Proportion of 2010 Population Average Enrollment 29 APPENDIX: SHIFTING THE TAX BURDEN SOURCES AND ACKNOWLEDGEMENTS 32 2

5 MUNICIPAL REVENUE Municipalities report budgeted revenue, actual revenue and actual expenditures to the Massachusetts Department of Revenue (DOR), Division of Local Services (DLS) on form Schedule A which includes a tax recapitulation report. The DLS of the DOR prepares many analyses from these reports. The MetroWest Economic Research Center (MERC) at Framingham State University uses the underlying information as well as DLS reports to prepare analyses for the local region. Unless otherwise stated, revenue presented in this report represents budgeted revenue reported to the Massachusetts Department of Revenue, Division of Local Services by the respective municipalities. It consists of the total tax levy, state aid, local receipts and an all other category. The tax levy consists of assessments on personal property, industrial, commercial, open space and residential real estate. Personal property includes furnishings of second homes and some inventories and equipment of unincorporated businesses. On-site vehicles of utility companies are generally included in this category as well. State aid is earmarked as state aid for education and state aid for general government. Local receipts include motor vehicle excise taxes, licenses and charges for services. The all other category includes free cash and other available funds. Budgeted revenue and actual revenue differ very little. Tax levies are subject to limitations imposed by related legislation. In any given year the tax levy cannot exceed 2½ percent of the total assessed value of the property of the community. In addition, the tax levy cannot increase by more than 2 ½ percent of the prior year tax levy limit plus new growth without voter approval of an operating budget override or a debt exclusion override. An operating budget override constitutes a permanent adjustment to the tax levy base that is used for subsequent year calculation limits while a debt exclusion override is in effect only for the life of the bond for which it was approved. It does not become a permanent adjustment to the tax levy base. Individual communities are also able to determine the extent to which property taxes will be borne by residential taxpayers or commercial and industrial (C&I) taxpayers. Some communities choose to tax residential, commercial and industrial property at the same rate while others use split rates. Personal property is generally taxed at C&I rates imposed by the respective community. With the residential exemption, the tax burden shifts within the residential class from owner-occupied and relatively lower valued properties, to relatively higher valued ones and to those not eligible for the exemption such as vacant land, rental properties and seasonal homes. The small commercial exemption is a similar shift within the class in that it excludes a percentage of the assessed value of each eligible parcel. It covers commercial real estate property valued at less than $1 million that is occupied by certified small business (10 or fewer employees). 3

6 Total municipal revenue for the South Shore CCSA rose from $686 million in FY2000 to $1.1 billion in FY2012, an increase of 57.1%. The growth in municipal revenue varied somewhat by community over this period. Cohasset s municipal revenue more than doubled over the twelve years, with an actual increase of 107%. Five of the communities had increases of less than 60.0% and six communities had increases that were greater than 60%. Per capita revenue for the South Shore residents in FY2012 averaged $3,281, up from $3,138 in FY2011 and $2,176 in FY2000. In FY2012 the tax levy accounted for about 60.6% of total municipal revenue for the South Shore CCSA, while state aid contributed about 15.0%; local receipts and the all other category comprised the remainder. More than 77% of the tax levy was generated from residential property taxed for FY2012. These and other municipal revenue characteristics for the South Shore CCSA are described in more detail in the following pages. GROWTH IN MUNICIPAL REVENUE FY FY2012 Milton Quincy Braintree Hingham Norwell 35-60% 61-86% % Abington Hanover 4

7 Total municipal revenue in the eleven community South Shore CCSA rose from $686 million in FY2000 to $1.1 billion in FY2012, an increase of 57.1%. This represents an average annual rate of increase of 3.8%. The total tax levy experienced a 75% gain from FY2000 to FY2012, increasing from $373.1 million to $652.9 million: this represents an average annual rate of increase of 4.8%. State aid at $143.3 in FY2000 reached its lowest point in FY2004 at $140.5 million, before increasing to $180.4 million in FY2009 and falling to $162.2 million in FY2012. Local receipts include motor vehicle excise taxes, licenses, charges for services such as sewer, water and trash collection as well as local option meal taxes. Local receipts was consistently less than state aid until FY2004 reaching $226.3 million in FY2012. The all other category which includes available free cash, had the lowest totals for each year, ranging from its low of $19.9 million in FY2011 to its high of $46 million in FY2003. Millions $ 1,200 $ 1,000 $ 800 $ 600 $ 400 $ 200 $ 0 TOTAL REVENUE COMPONENTS SOUTH SHORE FY FY2012 Total Tax Levy State Aid Local Receipts All Other Total Revenue Fiscal Total Tax Local Total State Aid All Other Year Levy Receipts Revenue 2000 $373,134,808 $143,286,151 $134,087,900 $35,514,607 $686,023, $418,627,576 $162,430,136 $147,090,493 $38,201,666 $766,349, $464,058,437 $140,452,215 $164,222,066 $33,857,513 $802,590, $505,494,332 $143,180,032 $187,781,185 $43,568,118 $880,023, $546,161,463 $172,218,464 $220,277,863 $34,914,581 $973,572, $618,832,651 $157,059,176 $214,267,751 $27,076,822 $1,017,236, $652,903,844 $162,158,796 $226,272,342 $36,259,918 $1,077,594,900 5

8 SOUTH SHORE CCSA MUNICIPAL REVENUE Total municipal revenue is comprised of the tax levy, state aid, local receipts and the all other category. The following two graphics show the percentage distribution of FY2012 municipal revenue for the South Shore CCSA compared to the percentage distribution for FY2011 municipal revenue combined for all 351 communities in the state. The FY2012 South Shore CCSA distribution was: tax levy, 60.6%, state aid, 15%, local receipts, 21%, and all other, 3.4%. Comparative percentages for all municipalities were: tax levy, 56.8%, state aid, 21.1%, local receipts, 18.2%, and all other, 3.9%. At this time state totals are available for only FY2011 and prior years. COMPONENTS OF REVENUE South Shore (FY2012) vs. Massachusetts (FY2011) South Shore 3.4% MA 3.9% 21.0% 18.2% 15.0% 60.6% 21.1% 56.8% Revenue Category South Shore 2011 South Shore 2012 MA 2011 Tax Levy 61.5% 60.6% 56.8% State Aid 15.5% 15.0% 21.1% Local Receipts 21.1% 21.0% 18.2% All Other 1.9% 3.4% 3.9% 6

9 The South Shore CCSA total municipal revenue for FY2012 totaled $1.1 billion, an increase of 4.8% from FY2011. For FY2012 the total tax levy generated 60.6% of total municipal revenue for the region. The tax levy is comprised of residential real estate taxes (46.9% of total municipal revenue), commercial real estate taxes, 9.9%; industrial real estate taxes, 2%, and personal property taxes, 1.9%. State aid, 15%; local receipts, 21%; and the all other category provided the remaining 3.4%. SS FY2012 MUNICIPAL REVENUE Residential Tax Levy Provided Almost Half All Other 3.4% Personal Prop. Tax Levy 1.9% Local Receipts 21.0% State Aid 15.0% Industrial Tax Levy 2.0% Residetial Tax Levy 46.9% Open Space Tax Commercial Tax Levy Levy 0.0% 9.9% Revenue Category-FY2012 Amount % of Total Revenue Residential Tax Levy $505,162, % Open Space Tax Levy $0 0.0% Commercial Tax Levy $106,446, % Industrial Tax Levy $21,176, % Personal Property Tax Levy $20,118, % Total Tax Levy $652,903, % State Aid $162,158, % Local Receipts $226,272, % All Other $36,259, % Total Revenue $1,077,594, % 7

10 Municipal revenue per capita for the South Shore CCSA increased from $2,176 in FY2000 to $3,281 in FY2012. This represented an average annual rate of increase of about 3.5%. This statistic can also be viewed as spending per capita as communities work with balanced budgets. The largest actual rate of increase over a prior year occurred in FY2007 with an increase of 6.8% over FY2006. Decreases over the prior year of 1.9% and 1.5% occurred in FY2004 and FY2010. $ 3,500 SS MUNICIPAL REVENUE PER CAPITA FY FY2012 $ 3,000 $ 2,500 $ 2,000 $ 1,500 $ 1,000 $ 500 $ 0 Fiscal Year Municipal Revenue Per Capita % Change Over Prior Year 2000 $2,176 N/A 2001 $2, % 2002 $2, % 2003 $2, % 2004 $2, % 2005 $2, % 2006 $2, % 2007 $2, % 2008 $3, % 2009 $3, % 2010 $3, % 2011 $3, % 2012 $3, % Average N/A 3.5% 8

11 Municipal revenue for the South Shore CCSA in FY2012 was $1.1 billion. South Shore communities collected 60.6% of their revenue from the tax levy, 15% from state aid, 21% from local receipts and 3.4% from the all other category. There were wide variations in the distribution of these revenue components by municipality. The tax levy ranged from 73% in Hingham to 52.6% in Weymouth while state aid fell between 24.7% in Rockland and 4.8% in Cohasset. Local receipts ranged from 27% in Cohasset to 12.8% in Hingham. The all other category fell between 6.8% in Abington and 0.7% in Braintree. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% MUNICIPAL REVENUE BY SOURCE South Shore FY 2012 Tax Levy State Aid Local Receipts All Other Municipality Tax Levy State Aid Local Receipts All Other Abington $27,129,312 $9,108,329 $7,505,801 $3,190,744 Braintree $70,972,548 $17,130,747 $29,414,686 $808,349 Cohasset $29,539,748 $2,111,022 $11,979,398 $732,956 Hanover $64,660,066 $8,906,163 $11,347,796 $3,672,762 Hingham $34,098,760 $8,685,129 $8,724,473 $3,465,713 Milton $63,530,337 $8,841,827 $17,623,219 $1,604,931 Norwell $31,952,331 $4,604,425 $7,074,021 $2,450,582 Quincy $173,738,209 $39,261,450 $67,446,975 $13,991,259 Randolph $49,610,839 $17,638,112 $18,296,800 $2,758,882 Rockland $27,071,844 $12,542,737 $9,730,862 $1,338,997 Weymouth $80,599,850 $33,328,855 $37,128,311 $2,244,743 South Shore $652,903,844 $162,158,796 $226,272,342 $36,259,918 9

12 The tax levy for the South Shore CCSA was $652.9 million in FY2012. This graph shows the residential, commercial, industrial and personal property tax levies by community. Quincy had the highest residential, commercial and personal property tax levies, with its residential tax levy as the largest contributor to the total tax levy with $120.2 million. This represented 23.8% of the total residential tax levy for the eleven South Shore communities. Noteworthy is Quincy with its small industrial tax levy of about $2.5 million. Millions $120 $100 $80 $60 $40 $20 $0 FY2012 TAX LEVIES BY CATEGORY South Shore by Municipality Residential Tax Levy Industrial Tax Levy Commercial Tax Levy Personal Property Tax Levy Municipality Residential Commercial Industrial Personal Property Abington $23,178,847 $3,055,774 $321,921 $572,770 Braintree $42,527,851 $21,925,560 $4,282,173 $2,236,964 Cohasset $27,433,098 $1,830,165 $5,613 $270,872 Hanover $27,827,854 $4,601,025 $933,459 $736,422 Hingham $56,387,197 $5,162,708 $1,952,554 $1,157,607 Milton $59,654,558 $2,193,808 $91,432 $1,590,539 Norwell $27,016,589 $3,709,764 $755,580 $470,398 Quincy $120,172,750 $43,281,123 $2,478,204 $7,806,132 Randolph $38,270,065 $6,763,512 $2,607,965 $1,969,297 Rockland $21,459,032 $3,242,492 $1,698,532 $671,788 Weymouth $61,234,875 $10,680,395 $6,048,958 $2,635,622 South Shore $505,162,716 $106,446,326 $21,176,391 $20,118,411 10

13 Municipal revenue per capita for the South Shore CCSA for FY2012 was $3,281. The number was determined by dividing FY2012 municipal revenue by the Census 2010 population. The corresponding number for FY2011 was $3,138. Six communities had figures above this regional value, and five communities had figures below. Municipal revenue per capita was highest for residents of Cohasset at $5,882: this value was about 113.9% higher than the lowest municipal revenue per capita value of $2,750 for residents of Randolph. This statistic can be viewed as spending per capita as municipalities work with balanced budgets. Abington Braintree Cohasset Hanover Hingham Milton Norwell Quincy Randolph Rockland Weymouth South Shore SOUTH SHORE MUNICIPAL REVENUE FY2012 Per Capita by Community $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 Municipality Total Revenue Census Pop Municipal Revenue Per Capita Abington $46,934,186 15,985 $2,936 Braintree $118,326,330 35,744 $3,310 Cohasset $44,363,124 7,542 $5,882 Hanover $54,974,075 13,879 $3,961 Hingham $88,586,787 22,157 $3,998 Milton $91,600,314 27,003 $3,392 Norwell $46,081,359 10,506 $4,386 Quincy $294,437,893 92,271 $3,191 Randolph $88,304,633 32,112 $2,750 Rockland $50,684,440 17,489 $2,898 Weymouth $153,301,759 53,743 $2,852 South Shore $1,077,594, ,431 $3,281 11

14 In the South Shore CCSA, the average single family assessed value peaked in FY2007, at $435,194 while the average single family tax bill peaked in FY2012 at $5,147. The average single family assessed value (blue) is shown on the left vertical axis, and the average single family tax bill (red) is shown on the right vertical axis. Each year from FY2000 to FY2006 the annual percentage increase in the average single family assessed value exceeded the annual percentage increase in the average single family tax bill. After peaking in FY2007 the average assessed single family value declined each year until FY2012, while the average tax bill continued to rise through FY2012. Over the entire FY2000- FY2012 period, the annual average assessed value increase was 5.9%, and the annual tax bill increase was 4.7%. AVERAGE TAX BILL & ASSESSED VALUE South Shore FY FY2012 Avg. SF Assessed Value $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 $6,000 $5,400 $4,800 $4,200 $3,600 $3,000 $2,400 $1,800 $1,200 $600 $0 Avg. SF Tax Bill Avg. SF Assessed Value Avg. SF Tax Bill Fiscal Year Avg. Single Family Assessed Value % Change Over Prior Year Avg. Single Family Tax Bill % Change Over Prior Year 2000 $194,037 N/A $2,983 N/A 2002 $251, % $3, % 2004 $318, % $3, % 2006 $421, % $4, % 2008 $432, % $4, % 2010 $396, % $4, % 2012 $387, % $5, % 12

15 The single family average tax bill (blue) increased from $2,983 in FY2000 to $5,147 in FY2012, a gain of 72.5%. The single family tax bill was determined by calculating a residential tax rate for the region and applying this rate to the single family average assessed value. The rate was determined by dividing the residential tax levy by the residential assessed value for the region. The single family average assessed value was determined by dividing the total single family assessed value for the region by the total number of single family dwellings. The nominal single family average tax bill over time was adjusted for inflation (red) using a base year of 2000 and the Boston CPI for Urban Communities. The real single family tax bill or tax bill adjusted for inflation in 2000 value rose from $2,983 in FY2000 to $3,781 a gain of 29.8%. $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 SOUTH SHORE SINGLE FAMILY AVG. TAX BILL FY FY2012, Nominal vs. Real Nominal Real Fiscal Year Nominal Single Family Avg. Tax Bill 13 Real (Inflation Adjusted) Single Family Avg. Tax Bill 2000 $2,983 $2, $3,376 $3, $3,804 $3, $4,102 $3, $4,377 $3, $4,864 $3, $4,962 $3, $5,147 $3,781

16 FY2012 South Shore residential tax rates ranged between $10.45 per thousand in Braintree and $16.03 in Randolph. Five of the communities had the same rates for residential real estate and commercial and industrial (C&I) real estate while six of the communities had different or split rates. The respective C&I rates per thousand were; Braintree, $23.65, Hanover, $15.74, Milton, $21.99, Quincy, $28.66, Randolph, $29.12 and Weymouth, $ Braintree also adopted the small commercial exemption for real estate valued at less than $1 million that is occupied by small businesses (10 or fewer employees). The resulting decrease causes a slightly higher commercial and industrial tax rate. See Appendix for further information on local taxing options. $30 $25 $20 $15 $10 $5 $0 FY2012 SOUTH SHORE TAX RATES Residential and C & I Rates Per $1,000 Residential Commercial & Industrial Municipality Residential Total Assessed Residential C&I Assessed Value Value Rate/$1,000 Rate/$1,000 Abington $1,509,039,517 $1,766,231,234 $15.36 $15.36 Braintree $4,069,650,840 $5,278,531,923 $10.45 $23.65 Cohasset $2,289,907,980 $2,465,755,221 $11.98 $11.98 Hanover $1,855,190,259 $2,253,595,960 $15.00 $15.74 Hingham $4,742,405,100 $5,438,188,940 $11.89 $11.89 Milton $4,157,112,026 $4,333,363,901 $14.35 $21.99 Norwell $1,897,232,345 $2,243,843,430 $14.24 $14.24 Quincy $8,739,836,378 $10,608,833,560 $13.75 $28.66 Randolph $2,387,402,655 $2,776,852,303 $16.03 $29.12 Rockland $1,357,307,524 $1,712,324,050 $15.81 $15.81 Weymouth $5,044,058,859 $6,006,054,640 $12.14 $20.13 South Shore $38,049,143,483 $44,883,575,162 N/A N/A 14

17 FY2012 South Shore average tax bills for single family residences varied widely by community. Calculated in each community by applying the residential rate to the average single family assessed value below, the average tax bill ranged from a high of $10,199 in Cohasset to a low of $3,541 for Weymouth, followed by Braintree at $3,759. Norwell was the second highest at $7,714. Hanover, Hingham and Milton were between $6,000 and $7,700 and the remaining communities of Abington, Quincy, Randolph and Rockland were between $4,000 and $5,000. None had average bills between $5,000 and $6,000. $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 FY2012 SINGLE FAMILY AVG. TAX BILL By Community $0 Municipality Tot. Single Family Assessed Value Single Family Parcels 15 Single Family Avg. Assessed Value Avg. Tax Bill Abington $1,114,967,400 3,723 $299,481 $4,600 Braintree $3,241,506,800 9,012 $359,688 $3,759 Cohasset $1,951,313,000 2,292 $851,358 $10,199 Hanover $1,717,342,100 4,118 $417,033 $6,255 Hingham $3,963,099,200 6,160 $643,360 $7,650 Milton $3,634,448,600 7,124 $510,170 $7,321 Norwell $1,783,892,600 3,293 $541,723 $7,714 Quincy $4,446,877,500 13,656 $325,635 $4,477 Randolph $1,786,519,900 7,123 $250,810 $4,020 Rockland $965,674,500 3,730 $258,894 $4,093 Weymouth $3,818,173,600 13,089 $291,709 $3,541 South Shore $28,423,815,200 73,320 $387,668 N/A

18 State aid for education for the South Shore CCSA as depicted in this graph grew from $76.4 million in FY2000 to a peak of $91.7 million in FY2003, then fell to $79.8 million by FY2006. It has since risen steadily to $120 million in FY2013. Note that the amount for FY2006 and subsequent years does not include an estimated $6 million annually in school construction that is now accounted for separately by the Massachusetts School Building Authority (MSBA). State aid for general government increased from $66.8 million in FY2000 to a peak of $70.7 million in FY2002, following an up and down pattern through FY2013 at $49.2 million. Total state aid to the eleven South Shore communities for FY2013, including estimated school construction costs of $6 million, was $176.2 million, compared to $162.2 million in FY2012. Millions STATE AID IN SELECTED CATEGORIES FY FY2013 $140 $120 $100 $80 $60 $40 $20 $0 Education General Government Fiscal Year State Aid & Education State Aid & General Gov. State Aid Total 2000 $76,393,678 $66,833,041 $143,226, $91,155,842 $70,724,514 $161,880, $79,797,318 $63,382,714 $143,180, $87,085,563 $70,583,251 $157,668, $102,104,277 $66,223,762 $168,328, $104,180,355 $48,974,557 $153,154, $110,702,179 $45,734,732 $156,154, $119,951,405 $49,227,695 $169,179,100 16

19 The following graph displays per capita state aid given directly to the communities of the South Shore CCSA for FY2012. Per capita state aid was determined by dividing the 2010 Census population into municipal state aid reported as part of municipal revenue by the respective communities. The values ranged from a low of $280 for Cohasset, followed by Milton at $327 to a high of $717 for Rockland. The corresponding Massachusetts average for state aid given directly to all municipalities for FY2012 was $712 and the South Shore CCSA average was $494. Six communities received per capita state aid that was below the South Shore average and five communities received state aid that was above the South Shore average. Abington Braintree Cohasset Hanover Hingham Milton Norwell Quincy Randolph Rockland Weymouth South Shore MA SOUTH SHORE STATE AID PER CAPITA FY2012 By Community $0 $100 $200 $300 $400 $500 $600 $700 $800 Municipality FY2012 Tot. State Aid 2010 Census Pop. FY2010 State Aid/Capita Abington $9,108,329 15,985 $570 Braintree $17,130,747 35,744 $479 Cohasset $2,111,022 7,542 $280 Hanover $8,685,129 13,879 $626 Hingham $8,906,163 22,157 $402 Milton $8,841,827 27,003 $327 Norwell $4,604,425 10,506 $438 Quincy $39,261,450 92,271 $426 Randolph $17,638,112 32,112 $549 Rockland $12,542,737 17,489 $717 Weymouth $33,328,855 53,743 $620 South Shore $162,158, ,431 $494 MA Avg. $4,660,009,290 6,547,629 $712 17

20 The following graphic identifies components of the general funds by function (departmental) and their distribution for the South Shore for FY2011. The communities in total spent $839.2 million for the general fund expenditures. There are various other funds that municipalities employ that are unique to each community. Some communities use enterprise funds to account for water and sewer while others use the general fund. This means that careful interpretation is required when comparing the distribution of the general fund as it is often published in municipal reports. Expenditure for the other funds has been estimated at $188.8 million for the South Shore CCSA by subtracting general fund expenditure from total revenue for FY2011 of $1.02 billion. Note that total revenue is assumed to be equal to total expenditures as communities work with balanced budgets. SS FY2011 GEN. FUND EXPENDITURES Education Largest Share in FY2011 Police, Fire & Other Public Safety 15.5% All Other 10.4% Education 46.1% Fixed Costs 16.8% Debt Service 5.5% Public Works 5.8% Expenditures FY2011 % of General Fund Education $386,705, % Public Works $48,361, % Debt Services $46,180, % Fixed Costs $141,121, % Police, Fire & Public Safety $129,844, % All Other $86,977, % 18

21 Total general fund expenditures in FY2011 for the South Shore CCSA were $839.2 million, an increase of $16.9 million or 2.1% over FY2010. Municipal expenditures are classified into six main categories: education, public works, debt service, fixed costs, police, fire and other public safety and all other. Of the eleven communities only Quincy at 34.4% had less than 45% go to education. The remaining communities ranged from 45.6% in Cohasset to 55% in Braintree compared to the South Shore average of 46.1%. For the region fixed cost was the second highest expenditure at 16.8%, with Quincy having fixed costs accounting for 27% of general fund expenditure. Regional shares for the remaining categories were: Public Works (5.8%), Debt Service (5.5%), Police, Fire & Other Public Safety (15.5%) and all other (10.4%). There was variability in these categories among the communities % 80.0% 60.0% 40.0% 20.0% 0.0% MUNICIPAL EXPENDITURE BY FUNCTION FY2011 South Shore Education (ED.) Debt Service (DT. Serv.) Public Safety (Pub. Sfty.) Public Works (Pub.Wrks.) Fixed Costs (Fix. Csts.) Other Municipality ED.* Pub. Wrks.* DT. Serv.* Fix. Csts.* Pub. Sfty.* Other* Abington $18,754 $2,373 $2,690 $6,987 $4,511 $2,407 Braintree $48,656 $5,547 $3,023 $6,356 $14,890 $9,939 Cohasset $15,101 $1,656 $3,821 $4,280 $4,516 $3,754 Hanover $23,985 $2,094 $3,726 $5,806 $6,011 $3,238 Hingham $35,686 $4,449 $7,325 $11,586 $9,916 $6,528 Milton $34,037 $3,978 $3,821 $5,682 $10,657 $7,689 Norwell $19,216 $1,532 $3,026 $6,527 $4,639 $4,291 Quincy $79,431 $14,914 $6,898 $62,371 $41,187 $26,019 Randolph $39,676 $2,560 $2,196 $12,009 $9,817 $10,000 Rockland $20,642 $2,414 $392 $8,665 $5,735 $4,540 Weymouth $51,522 $6,844 $9,262 $10,853 $17,967 $8,571 South Shore $386,706 $48,361 $46,180 $141,121 $129,84 $86,977 *All figures are in thousands. 19

22 In FY2011 education expenses consumed the largest share of municipal expenditure in the South Shore CCSA. In the following graph FY2011 municipal education expenditures are ranked by size. Values ranged from a low of $15.1 million for Cohasset to a high of $79.4 million for Quincy. The table below shows educational state aid given directly to each municipality as a percentage of educational expenditures reflected in the graph. Cohasset recovered 11% of its education expenditures with state aid while Rockland recovered 49.4% followed closely by Weymouth at 43.8%. The remaining communities recovered between 15.2% and 38.7% of their education expenditures with state aid. Cohasset Abington Norwell Rockland Hanover Milton Hingham Randolph Braintree Weymouth Quincy FY2011 EDUCATION EXPENDITURE By Community $0 $20 $40 $60 $80 Millions Municipality Education State Aid Education Expenditures State Aid % Abington $7,252,017 $18,754, % Braintree $11,536,191 $48,656, % Cohasset $1,662,203 $15,101, % Hanover $6,013,329 $23,984, % Hingham $5,409,258 $35,685, % Milton $5,529,473 $34,037, % Norwell $3,004,219 $19,215, % Quincy $19,123,893 $79,430, % Randolph $11,868,277 $39,676, % Rockland $10,206,902 $20,641, % Weymouth $22,574,593 $51,521, % South Shore $104,180,355 $386,705, % 20

23 Municipalities in the South Shore CCSA had debt service as a percentage of general fund expenditure that varied widely for both FY2010 and FY2011. Debt service includes retirement of debt principal and interest on long term debt, interest on short term debt and other interest. Cohasset had the highest debt service as a percent of general fund expenditure for both FY2010 (11.9%) and FY2011 (11.6%). Rockland had the lowest for both years: FY2012 (0.7%) and FY2011 (0.9%). The remaining communities fell between 10.6% and 2.9% in FY2010 and between 9.7% and 2.9% in FY % 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% DEBT SERVICE FY2010 & FY2011 As % of General Fund Expenditures FY2010 FY2011 Municipality Debt Service FY2010 Debt Service FY2011 Debt Service % of Gen. Fund Debt Service % of Gen. Fund Abington $3,305, % $2,689, % Braintree $2,434, % $3,022, % Cohasset $3,834, % $3,821, % Hanover $3,952, % $3,725, % Hingham $7,780, % $7,324, % Milton $4,081, % $3,821, % Norwell $3,179, % $3,026, % Quincy $7,107, % $6,897, % Randolph $2,756, % $2,195, % Rockland $305, % $392, % Weymouth $9,896, % $9,262, % South Shore $48,636, % $46,180, % 21

24 Municipalities in the South Shore CCSA had fixed costs as a percentage of general fund expenditure that varied widely for both FY2010 and FY2011. Fixed costs include workers compensation, unemployment and health insurance, other employee benefits and all other insurance and retirement. Quincy had the highest other fixed costs as a percent of general fund expenditure for both FY2010 (24.9%) and FY2011 (27%). Braintree had the lowest for both years: FY2010 (7.6%) and FY2011 (7.2%). The remaining communities fell between 20% and 8.4% in FY2010 and between 20.4% and 8.6% in FY2011. All communities, except Braintree, had higher fixed costs percentages in FY2011 compared to FY % 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% FIXED COSTS FY2010 & FY2011 As % of General Fund Expenditures FY2010 FY2011 Municipality Fixed Costs FY2010 Fixed Costs FY2011 Debt Services % of Gen. Funds Debt Service % of Gen. Funds Abington $6,657, % $6,987, % Braintree $6,433, % $6,355, % Cohasset $4,100, % $4,279, % Hanover $5,182, % $5,805, % Hingham $9,687, % $11,586, % Milton $5,432, % $5,682, % Norwell $5,931, % $6,527, % Quincy $56,201, % $62,370, % Randolph $10,971, % $12,008, % Rockland $8,337, % $8,664, % Weymouth $10,392, % $10,853, % South Shore $129,329, % $141,121, % 22

25 SOUTH SHORE CCSA - K-12 PUBLIC SCHOOL ENROLLMENT K-12 PUBLIC SCHOOL ENROLLMENT The MetroWest Economic Research Center (MERC) at Framingham State University annually collects data on K-12 public school enrollment for several substate regions. The South Shore CCSA public school enrollment is calculated for kindergarten through grade 12 using the annual state student census conducted in October of each year. Included in the data are all public school students in regular education, special education, ELL (English Language Learners), regional charter schools and regional vocational high schools. The Massachusetts Department of the Elementary and Secondary Education implemented a student enrollment database, the Student Information Management System (S.I.M.S.) in The MERC K-12 data presented in this report is obtained from both the October 2011 S.I.M.S. student census and data provided directly to MERC by the local school districts. 23

26 SOUTH SHORE CCSA K-12 PUBLIC SCHOOL The total South Shore public school enrollment declined by 2.6% from 2001 to 2011 (vocational and charter school enrollment are not included). Rockland (33.8%) and Randolph (29.8%) had the largest decline in student enrollment from 2001 to Quincy had the lowest decline in student enrollment (0.9%). Hingham (19.7%) and Norwell (16.3%) had the largest increase in student enrollment. Hanover had the smallest increase in student enrollment. The vocational student enrollment increased by 18.6% from 2001 to The charter school student enrollment increased by 57.6% during the same period. SOUTH SHORE K - 12 ENROLLMENT 2001 and 2011 Student Enrollment 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, Source: MERC and the Massachusetts Department of Elementary and Secondary Education 24

27 SOUTH SHORE CCSA K-12 PUBLIC SCHOOL State aid for education given to the eleven South Shore municipalities in FY2011 was about $104.2 million, as reported on page 16. In FY2011 the communities spent more than $386.7 million on education, as detailed on page 18. The South Shore K-12 public school enrollment in October 2011 was 42,470 not including vocational and charter schools. The communities reporting the highest enrollment were Quincy with 8,971 students enrolled, followed by Weymouth (6,703) and Braintree (5,375). Abington, Hanover, Hingham, Milton, Norwell, Randolph and Rockland had enrollment between 1,700 and 3,000. Cohasset reported the smallest student enrollment at 1,476. Enrollment in vocational high schools totaled 903 and the charter school totaled SOUTH SHORE PUBLIC SCHOOL ENROLLMENT By Community MILTON 3,790 RANDOLPH 2,898 QUINCY 8,971 BRAINTREE 5,375 WEYMOUTH 6,703 HINGHAM 4,086 COHASSET 1,476 NORWELL 2,295 Below 2,500 2,500 3,999 4,000 5,500 Above 5,500 ROCKLAND 2,211 ABINGTON 1,78 HANOVER 2,687 Source: MERC and Massachusetts Department of Elementary & Secondary Education 25

28 SOUTH SHORE CCSA K-12 PUBLIC SCHOOL The South Shore K-12 public school enrollment in October 2001 was 43,589 (vocational and charter school enrollment are not included). The communities reporting the highest enrollment were Quincy with 9,057 students enrolled, followed by Weymouth (6,844) and Braintree (4,847). Abington, Hanover, Hingham, Milton, Norwell, Randolph and Rockland had enrollment between 2,000 and 4,200. Cohasset reported the smallest student enrollment at 1,370. Enrollment in vocational high schools totaled 76 and the charter school was SOUTH SHORE PUBLIC SCHOOL ENROLLMENT By Community Source: MERC and Massachusetts Department of Elementary & Secondary Education 26

29 SOUTH SHORE CCSA K-12 PUBLIC SCHOOL Enrollment in the South Shore CCSA K-12 public schools totaled 43,589 students in Student enrollment from 2001 to 2005 declined by 2.6% excluding vocational and charter schools. Student enrollment in 2011 was 42,470 a slight increase from The vocational school enrollment increased by 18.7% and charter school enrollment increased 57.6% from 2001 to South Shore K-12 Enrollment 2001 to 2011 Enrollment by Year Number of Students Source: MERC and the Massachusetts Department of Elementary and Secondary Education Period South Shore Enrollment (except Voc. & Charter) Vocational School Enrollment Charter School Enrollment Total Enrollment , , , , , ,912 27

30 SOUTH SHORE CCSA K-12 PUBLIC SCHOOL The K-12 public school enrollment in 2011 was 43,373 not including charter schools. This map measures the proportion of each community s population enrolled in public school. Public school enrollment in 2011 is given as a percentage of estimated 2010 population, the most recent census data available. The highest enrollment as a percentage of population occurred in Norwell (21.9%), followed by Hanover (20%). In these communities, about 1 in 5 population members were in public schools. Over 15% of the population in the communities of Braintree, Cohasset, and Hingham attended public school. Quincy has the largest population and public school enrollment but the smallest proportion of population in public school at 9.8%. SOUTH SHORE PUBLIC SCHOOL ENROLLMENT As Proportion of 2010 Population Source: U.S. Census, MA Dept. of Elementary Education & Secondary Education and MERC 28

31 SOUTH SHORE CCSA K-12 PUBLIC SCHOOL In 2011, South Shore CCSA K-12 public school enrolllment averaged 3,378 students per grade. At the elementary school level, the average number of students per grade was 3,413 students. The average number of students per grade at the middle school was 3,408 students. The average number of students per grade at the high school level was 3,303 students. For this graph, the average number of students per grade was calculated including the vocational and charter school students K-12 ENROLLMENT SOUTH SHORE Average Enrollment Avg. Enrollment by Grade 4,000 3,500 3,000 2,500 2,000 1,500 1, K* South Shore Source: MERC and Massachusetts Department of Elementary & Secondary Education Grade Total Enrollment # of Grades Avg. Enrollment by Grade K , , , , , ,303 All Grades 43, ,378 29

32 SOUTH SHORE CCSA APPENDIX FOUR OPTIONS TO SHIFT THE TAX BURDEN WITHIN AND AMONG PROPERTY CLASSES The property tax levy is the levy a city or town raises through real and personal property taxes. In 1981 Massachusetts voters approved Proposition 2 ½ which caps a community s annual tax levy. This cap is referred to as the levy limit which increases annually by 2 ½ percent of the full and fair value of tangible property in the community. A municipality can also permanently increase its levy limit through a successful override referendum. Municipalities can choose to temporarily levy above their levy limit through a successful debt or capital outlay expenditure exclusion referendum. Communities may elect to shift the tax levy burden both within and among the major property classes in accordance with four state legislated, limited local options. The split tax rate, the open space discount, the residential exemption and the small commercial exemption are the four options. For the most part, the split tax rate results in a shift of the tax burden from residential to the other classes of property while the open space discount shifts the related open space tax burden to residential property. More than 100 of the 351 Massachusetts communities have adopted split rates. The open space discount reduces the tax burden of open space and natural land contributing to the public benefit and enjoyment. It does not cover property held for income production, property with a permanent conservation restriction or chapter land such as farms and forestry (M.G.L. CH. 61, 61A, 61B) that receives reductions via another avenue. The tax burden is shifted to the residential class and results in a slightly higher overall residential tax rate. The discount may be up to 25% of this residential rate. In the last few years only one community, the town of Bedford, chose this option which was approved at 25%. The residential exemption excludes part of the value of an eligible taxpayer s principal residence. This discount may be up to 20% of the average assessed value in the total residential class. It is this fixed amount that is deducted from each eligible parcel. Since it is still necessary to raise the same pre-determined dollar amount from the residential class, the result is a higher residential tax rate. By special legislation the cities of Boston, Cambridge and Somerville are permitted to increase the residential exemption to not more than 30%. The following 13 communities presently have residential exemptions: Barnstable (20%); Boston (30%); Brookline (20%); Cambridge (30%); Chelsea (20%); Everett (20%); Malden (20%); Nantucket (20%); Somerset (10%); Somerville (30%); Tisbury (20%); Waltham (20%); Watertown (20%) and West Barnstable (20%). Eleven communities have many apartment buildings and two (Tisbury, Nantucket) have a large number of seasonal homes. 30

33 The small commercial exemption is a similar shift within the class in that it excludes a percentage of the assessed value of each eligible parcel. It covers commercial real property valued at less than $1 million that is occupied by certified small business (10 or fewer employees). It results in a slightly higher C&I tax rate although the personal property tax rate is not affected. At the present time ten communities have adopted this exemption at 10%. The communities are: Auburn, Avon, Bellingham, Braintree, Dartmouth, New Ashford, Seekonk, Somerset, Westford and Wrentham. A brief discussion of the rules relating to a split tax rate follows. Split tax rates - The classification Act of 1979 established two limits on the ability of municipalities to shift the property tax burden. The first is that the commercial, industrial and personal property (CIP) tax rate may only be 50% higher than what it would otherwise be with a single rate. The second limitation requires that the residential rate be at least 65% of what a single tax rate would be. This is referred to as the Minimum Residential Factor (MRF). Modifications to the first limitation were enacted in Under these later provisions, if a community s maximum shift results in a residential share larger than the prior year s, the CIP share may increase by as much as 75%. However, the residential tax levy share cannot be reduced below 50% of its single tax rate share nor can it be less than the levy share in any year since the community was first certified. Tax levy shifts allowed under the property tax classification law for allocating the annual property tax levy among residential and business taxpayers were temporarily changed effective January 2004 for fiscal years 2004 (if rates had not already been set), 2005, 2006 and A community will continue to have its maximum shift computed under current law in each of those years. If adopting the shift would result in residential taxpayers paying a greater share of the tax levy than the prior year, the shift will then be further adjusted upward using that year s expanded parameters. The shift in tax burden for commercial properties was increased up to 200% and the maximum burden for residential properties was reduced to 45%. As a result of the decision, beginning in fiscal 2009, the maximum shift to commercial property will be 170% of the fair cash value share of the tax levy if the community qualifies for and makes this temporary change, choosing to exceed the preexisting 175% maximum. The maximum business shares for 2004, 2005, 2006 and 2007 are 200%, 197%, 190%, and 183% respectively while the minimum residential shares are 45%, 47%, 49% and 50% respectively. There is the additional limitation that residential taxpayers cannot pay a lower share of the tax levy than in the prior year. Braintree and Milton were among the several split rate communities that adopted this provision. Current law allows increasing the commercial, industrial, and personal property burden by 50% as long as the residential and open space classes contribute at least 65% of the burden. The rate of this maximum shift is known as the Minimum Residential Factor. 31

34 SOURCES Massachusetts Department of Education (MA DOE) Massachusetts Department of Revenue (MA DOR), Division of Local Services (DLR) MetroWest Economic Research Center (MERC) United States Census Bureau, U. S. Department of Commerce (US CENSUS) ACKNOWLEDGEMENTS The MetroWest Economic Research Center (MERC) at Framingham State University would like to acknowledge the contributions of the following individuals and organizations: Massachusetts Department of Revenue, Division of Local Services Office staffs of the public school districts serving the communities of Abington, Braintree, Cohasset, Hanover, Hingham, Milton, Norwell, Quincy, Randolph, Rockland, Weymouth Massachusetts Legislature: House of Representatives and Senate Framingham State University Ginger Conti, MERC s Office Manager, for reading and editorial comments 32

35 For additional copies or further information, please contact the MetroWest Economic Research Center Framingham State University Framingham, MA METROWEST ECONOMIC RESEARCH CENTER At Framingham State University 100 State Street, Framingham, MA fax