Brattleboro Citizens’ Breakfast
April 17, 2015
Gibson-Aiken Center
Municipal Philanthropy Video Link
Presenter: Chris Chapman
A writer friend had advised Chris not to lead with the negative, so he began his talk saying that there is “reason to hope” because there is untapped opportunity to break the pattern of “scarcity” of municipal resources in Brattleboro, the state, and the region. Currently, we cannot afford all that we need by raising taxes. We have been taxed about as much as we can be. Yet we still need money for the basics – infrastructure, including roads, bridges, sidewalks, library hours and maintenance equipment, plus public safety. The Green St retaining wall and Elliot St bridge repair are just two visible examples, and the much larger Police / Fire project is a more prominent one.
Local municipalities are faced with infrastructure depreciation and taxpayer exhaustion. Taxes are increased just to keep up with the status quo. There is a need to attract businesses to grow the local tax base, but you can’t blame businesses that leave for places with healthier economies. Children have become our most valuable export: two-thirds of tax money is spent on education. Once educated, they leave, seeking employment opportunities elsewhere. Businesses can’t find the local talent and skill they need, so they stay away, leaving the town to cope with its expenses and needing to raise taxes just to maintain the status quo and still try to keep the town attractive for business formation, expansion, and resettlement. All of this can be summarized as a slow-motion economic “death spiral.”
There is a “ray of hope,” however. If we can change the relationship between those who are taxed (including renters who help pay their landlord’s taxes) and the taxing authority. In essence, we need to change the paradigm of taxation, at least at the local level. Changing the relationship would mean not demonizing government but rather seeing it as the effective instrument that it is. (We can indeed have ten-hour Town Meetings to discuss policy, but we do come to informed agreement.)
America is the most generous country in the world. Giving USA reports that $335 billion was given to charity in the United States in 2013, and this figure does not include in-kind public service. We are now on the front end of the largest intergenerational transfer of wealth in the history of civilization, estimated at $59 trillion. Assets are now more liquid than ever. Add to that fact the longstanding willingness in our society to make philanthropic donations, and the way to break the death spiral becomes clear.
The most recent example of municipal philanthropy is that of Ronald Read, a janitor whose bequest of $1.2 million to the Brooks Memorial Library was the largest in its 150-year history and whose $4.8 million estate gift to the Brattleboro Memorial Hospital was stunning. But Read is not alone. The Thompson Trust, with a current portfolio of some $20 million, was started to provide for retired seamstresses in Brattleboro VT and Rhinebeck NY. The Austine School was founded by Col. Austine, a Civil War veteran. Anna Marsh endowed the Brattleboro Retreat. More recent examples include the Nelson Withington Skating Rink and the West River Park. The generosity of individuals has sometimes been well known, but others have also made quiet contributions to the town. It’s likely that most people are unaware of the late Dr. John Hogle’s endowment of a piece of property off Eaton Ave. as a wildlife sanctuary. A retired Brattleboro janitor established a $500,000 scholarship fund — the Eames Award — for further study of the arts.
Philanthropy is not solely motivated by the promise of tax relief, but more so by an internal need for personal fulfillment. The root of the word itself, which literally translates from Greek as love for one’s fellow human beings. The tax code allows and promotes philanthropic donations to municipalities, cf. §170 of the IRS Code. [1] Contributions to the Town are tax-deductible. With the trillion-dollar transfer of wealth going on around us, in the most generous society in the world, this is a good time for the town to announce that it would welcome contributions over and above people’s property tax obligations. The Selectboard could simply state that it welcomes such contributions. These contributions are likely to be episodic, but they can range from huge transfers all the way down to “the widow’s mite” and add up substantially over time. It will take our Selectboard’s leadership to promote such a trend, which would in essence effect a needed change in the paradigm of taxation. As a practical matter, the Selectboard votes to accept all grants to the Town. This practice gives the Selectboard the ability to accept, reject, or negotiate conditions that a donor may wish to place on a contribution. This longstanding practice makes the transaction publicly accountable. The process to do this is currently in place; there is no need to form a committee. The only addition to the town’s work would be issuing receipts for donors’ tax reporting (which might even include thank-you notes).
Summary of some Questions and Answers:
- A suggestion of approaching the Vermont Community Foundation to set up a Brattleboro municipal fund was termed “sound,” but the Municipal Philanthropy idea looking toward a bigger goal, seeking to change the paradigm of taxation.
- A criticism that federal expenditures of taxes act to “crimp the hose up the line” before resources can get to the Town level was not disputed, but this philanthropy proposal attempts to address problems at the local level in a humane and simple manner.
[1] cf: Charitable Contribution Deductions
