FSC Report Problems – Part 1

There are many problems with the Shrewsbury 2013 Fiscal Study Committee Report, dated November 26, 2013. The following article highlights the problems with just one section, Executive Summary – Significant Findings – page 4. All of the quotes come directly from page 4 of the report. To see the quotes in context, view the entire report here –  2013 Fiscal Study Committee Report.

Quote: ‘ … to determine what of significance has changed since the Fiscal Study of 2007

This question should have been, but was not, answered in the Significant Findings section of the report in order to have a clear understanding of current economic conditions and their impacts on the town. It was only addressed in a cursory manner in the other sections.

Of course, the major change since 2007 is the great recession and its continuing negative impact on average taxpayers’ financial situation and on state aid. While other sections discuss some of the impacts of the recession, they fail to point out how important it should be in reordering town officials’ priorities.

Quote: ‘ … the greatest benefit was the educational process itself. Many in the current group had only cursory knowledge of the factors that go into making and managing our budget.

In fact, other than the eight town or school officials, almost all of the other members had very little, if any, experience with a town budget. Given this inexperience, it would only be natural for these members to follow the lead of the eight members who were officials. There is nothing wrong with relying on more experienced members when such a group is formed, but when these officials have publicly advocated for an operating budget override in the past, it would be surprising if some of the biases of the eight officials did not creep into the committee’s decisions about which areas to cover/not cover, how deeply to cover an area, what data/charts/exhibits to use, etc.

After only 4 months, how likely were those who started with almost no knowledge of the budget to do more than follow the lead of the town officials on the committee who were known to favor an override?

Quote: ‘ … the committee found that there are no viable or realistic alternatives to reduce the expenditures of the town government.’

But that is an answer to a question that no one has raised! This is the kind of straw man argument that governments use frequently to confuse people. No one has suggested that reducing the expenditures of the town government is required in order to solve the town’s chronic budget problem. What has been urged on town officials is a reduction in the annual growth rate of expenditures.

Quote ‘ … The committee found that the departments have achieved every level of efficiency that is feasible, from streamlining operations, contracting out services and regionalization. Costs that can be controlled have been reduced or the rate of growth moderated.

Improved efficiency is only one of the variables that can control costs. For example, contracting out town custodial services was less about efficiency and more about lowering the unit cost for a service, and probably limiting future increases in the unit cost. The school department has not significantly reduced the rate of growth of school salary accounts in order to reflect current economic realities, nor has it considered changes in current school policies (e.g. increased PreK and Full-day Kindergarten enrollments, and its version of SPED full inclusion) that could reduce service level requirements, and therefore costs.


Quote: ‘The key question going forward is, what kind of community do we wish to be and what are our


Is this really the most important question that the FISCAL Study Committee should ask? Shouldn’t a FISCAL Study Committee’s most important question be how to find ways to limit spending increases and find new revenues in order to achieve as many of the priorities as possible?

Limiting the growth rate of teacher salaries would do a lot to resolve the town’s budget problem, but while the report does discuss salary increases in general terms later in the report (under Human Resources), it downplays the negative impact of salary increases on the budget by talking only about the minor reduction in general salary increases from 3% to 2%. But taken together, municipal and school salaries are the biggest expenses in the town budget, so any year-to-year increase in a large salary account will have a disproportionate impact on the total budget. And since teacher salaries are the biggest payroll account by far, the combination of general and step increases in teacher salaries have the biggest impact on the town budget. Yet this Fiscal Study Committee report fails to analyze this area in depth, or show how much faster teacher salaries have grown compared to other expenses in the town budget.

This omission is only to be expected, since school and town officials do not want to deal with this difficult subject.