The town of Brattleboro seems to be reaching a point where we can barely afford our expenses. Much like a person who has fallen behind, Brattleboro must now make decisions in a different way.
When there is money, something broken gets fixed. When there is money, it is easy to go to the store to get a new widget if the old one fails. It’s easy to go buy a new time-saving accessory like a snowblower, or install energy-saving devices like new windows or more efficient appliances. It’s not a problem if someone stops over for dinner, and it is easy to part with some extra food, beverage or even cash.
When there is money, loans aren’t necessary or can be paid off quickly. There is cash on hand to take that extra trip, buy the new car, and send the kid to college. One can add to savings, or make investments that will pay off in the future.
Brattleboro was like this, but a decade ago we realized that the checkbook hadn’t been balanced and our wealthy-living days were put on hold. The Town began to do what many people who start down this path do – use a credit card (ie, bonds).
Brattleboro began to buy things with the intention of paying for them later. The Waste Water Treatment plant costs millions and looks great, but it isn’t paid for. Water and sewer users will be paying for it in rising utility bills for years. Numerous projects in the past decade have been bought with the intention of paying later, which is fine if one’s poverty is short term.
For many who start to slip, though, it isn’t as easy to become your wealthy old self again. It’s more likely that you slip further. Late fees, increased interest payments, and reconnection fees are familiar to those with income on the decline. It begins to cost more to live as penalties for being poor kick in, and there is no longer room in the budget for emergencies.
Decision-making also changes as income declines. When one has cash, going out to eat or to the movies is easy to do and requires almost no thought other than the choice of destination. When income declines, the choices become more important. If we can only eat out once, we need to make a good decision about how to spend the limited funds.
Once all the “extras” are trimmed, the essentials are on the line. Can I go to the doctor? Can I eat? Do I have to move?
If Brattleboro were a person, it would seem to be close to this level. The recent debate over spending a few thousand dollars on energy audits for much greater savings would be a no-brainer when times are good, but harder to justify when there’s no money.
Decisions made in poverty are risky and painful. If one can’t pay the electric bill on time, there is the risk of a cut-off notice. A cash-limited person has no choice but to pay for the essentials of food, shelter, and power, but may not have the ability to pay on time anymore. This adds stress to an already stressful situation.
Gradually the extras drop away. It’s just cheaper to make food yourself, so restaurant-going is cut. No more going to movies or shows. No travel to concerts in neighboring towns, or sports events in big cities. No going out with friends to the bar. Being proud, one covers for this for a while with excuses, then the invitations drop away altogether.
With limited funds, increased fees and penalties, and a dwindling list of things one can do legally, a person heading down the ladder is faced with survival. Can I make it to my next check? Should I eat, or should I feed the pets? Sell cherished items? Ask for handouts? Get rid of the car and related expenses but lose ability to get to work? Stop taking medicine?
An income-challenged person looking at Brattleboro’s budget might see ample room for trimming that those who live in comfort might have a harder time noticing.
– A person with limited income would make no plans to buy anything new unless it was an emergency.
– Spending would be limited to essentials. There would be no frills and no growth or improvement unless one gets lucky.
– All spending would be cash. The credit cards would be cut up by now.
– Items of value would be sold.
And, of course, one would need to continue to hustle and bustle to make sure one’s income remains steady or increases if possible.
A person of limited means may still be able to choose to move elsewhere, but a town has a permanent address. There’s no getting away to look for better opportunities. Those opportunities have to be created here.
Brattleboro, the town, is barely able to maintain it’s middle class lifestyle. We’re not quite on skid row, but we’ve been knocked down a peg and need to be very careful. As wealthy people like to point out to those less fortunate, it’s about choices.
Towns are different than people, of course, but recent town budget struggles seem similar to personal budget issues dealt with by many of the town’s citizens over the last decade. As ability to pay declines, life changes and it becomes harder to be the same person as before. There may be tears or anger, but in the end we must marshall onward.
“In God we trust, all others pay cash.” – Jean Shepherd
Cart/Horse
I agree, Chris. Thanks for this post. I know many of us think along these lines, and it is becoming more and more frustrating for all of us who own businesses or homes here.
I’m more than a little surprised that we are now discussing laying off emergency responders as we begin paying to build them a new facility. It seems inconceivable to me that our selectboard fails to grasp the irony. So the question that arises in my mind is: Would these people make the same decisions in their own household?
I’m getting the feeling more and more lately that there’s an element of pride involved, and that it’s compounded by a bunker-mentality attitude – “we’re the good guys, and no one can fathom what we do here but us.”
There is no doubt, having read up recently on our charter, as well as state law, that the board does indeed have the power to reverse, table, or postpone the police/fire project regardless of the insinuations they’ve made to the contrary. Yes, it would be embarrassing, and yes we’d still be liable for the funds we have already received, but it’s my belief that most taxpayers in town would gladly take a short-term hit in order to forestall or eliminate an impending disaster. Its not hard these days to find entire cities and counties in the process (or on the verge) of declaring bankruptcy.
How much money out of the
How much money out of the $1,000,000.00 has actually been paid out? Seems that should be an easy answer from the managers of the project. Isn’t it possible or probable that there’s still quite a bit in reserve and the only loss from early payback to the loan would be any penalties for early payout. Also most of what’s been done would be prep work, i.e. architectural drawings, planning etc. which could just be set aside and used at a more appropriate and affordable time.
Police/fire facility
I was amazed by the vote on the police/fire facility in the first place.
An other commenter warns against poverty budgeting. And I would agree that you can’t cheapass your way to prosperity. Sometimes you have to invest to realize long term savings.
But while there may be a need for the police/fire facility, it doesn’t seem to be an investment. At least, I haven’t heard how it will save money or increase revenue.
Cutting staff
Do I understand this correctly?
In order to pay for the Police and Fire facilities we’re going to lay off Police and Firemen?
I hope I’m wrong.
That sounds too much like “In order to save the village, we had to burn it”.
Let’s face reality. WE CAN’T AFFORD THIS LUXURY.(At least st this time).
Let’s re-think this. Recover whatever we can, cancel what’s left of the bond issue, and revisit this again when we CAN afford it.
Don't Worry!
All those green energy jobs from shutting down VY will fix all your problems!
Please forgive my schadenfreude 🙂
I learned that I should put a 🙂 after a particularly obnoxious comment from Lise, I hope I did it right.
Another straw for the camel
You are right that VY closing will be an additional impact in coming years.
Brattleboro’s currently facing a situation made while we were planning for VY to be here for decades to come.
Poverty budgeting is a trap
Poverty budgeting is a trap that leaves many stuck in an endless cycle. Never buying anything unless it’s an emergency leaves you no room to bargain for a better price and costs more in the long run. Things that save money in the long run are passed up because the up front cost is too high so that money continues to bleed and no savings accumulate. Selling anything of value leads to not having what you need and having to buy new and waste more money than you gained selling.
Poverty mindset doesn’t save money. It causes budget bleed and scrambling because decisions are based on desperation, not long term planning because there is no ability to plan long term when the short term is in such a crisis. It’s horrible enough when people are forced into it, let’s not suggest that a town willingly adopt it.
I think there's a big
I think there’s a big difference between what Chris is suggesting and the ‘crisis’ of poverty budgeting. What happened to living within your budget? Sure, emergencies come along; things break; people get sick; jobs are lost -all the more reason to live within your capabilities rather than borrowing for expenditures that could, reasonably, be put off for awhile or a better price be sought for them. Of course,it sometimes makes sense to spend money to fix a situation that will only get worse -and more expensive- as time goes on.Sometimes that roof has to be replaced and you find the money for it. But to recklessly approve enormous expenditures for things that are not time sensitive is not the solution this town needs. And while a brand new police/fire facility would certainly be nice to have the town will survive without it for the foreseeable future. The irony of approving this size project and then talking about having to decrease town employee hours is both ridiculous and irresponsible.I look at this town and see so many things that need to be fixed; the potholes; the still evident destruction from Irene; the dangerous intersections where people continue to be killed; the fact that small businesses are unable to maintain their businesses in this town causing even more empty storefronts;there are dozens of things that need attention -that need some funds to fix. It seems like the decision about the new police/fire project was pushed through with not enough public information and now the SelectBoard seems to have drawn a line in the sand that they can’t or won’t back down from. Most of us have to live within a budget- it’s not always easy and almost never fun but it’s what you do to keep your family and your life functioning on an even keel. If I want to go on vacation or buy a big ticket item I plan for it; I research what it will cost and I save for it. Long term planning and looking at the entire situation does not equal desperation or crisis mode. It equals responsibility.
Lest someone forget
You are now paying the lowest taxes of any American all the way back to Truman. The rich are paying far less, normal people are paying slightly less but we are all paying less than people in our current situation have ever paid.
Where did you get your
Where did you get your information?
From what I’ve read the median wage earner has seen taxes rise, the lowest income earners have seen taxes fall and the top earners have had a precipitous drop in taxes. Also you cannot tie the discussion of town taxes with income taxes. I’ll go out on a limb and say that town taxes have risen significantly since Truman’s era while most of us who live here have seen little rise in income proportionately and a stable or slight higher income tax rate.
As you can see by the chart provided below the drop for low earners wasn’t significant, especially when you consider that a tax rate drop for someone making $30,000 would only amount to a small amount of money anyway since you’re beginning with a low or barely livable wage.
http://visualizingeconomics.com/blog/2007/11/03/nytimes-historical-tax-rates-by-income-group
In order to get a realistic idea of where tax rates are compared to the 1950s you need to see a break down by income as provided in this article. The huge drop for the upper earners skews the figures otherwise. So while it is true that overall Americans are paying less tax that is a bit less enlightening than the chart I’ve provided because instead of averaging all incomes you can see where you really are based on income level.
But as I said income tax also doesn’t correspond to town taxes.
Sight correction: slightly
Sight correction:
slightly higher income tax rate.
As you can see by the chart provided below the drop for low earners wasn’t significant, especially when you consider that a tax rate drop for someone making $20,000 would only amount to a small amount of money anyway since you’re beginning with a low or barely livable wage.
However the tax drop shown in this chart even for those making 30,000 to say 70,000 is not going to amount to much in spending cash. Compared to what those top earners have seen in actual tax savings it’s a hill of beans, or maybe pennies.
Oh for crying out loud. It's
Oh for crying out loud. It’s typographical error morning I guess
Sight correction:
SLIGHT CORRECTION
One more chart showing
One more chart showing marginal tax rates really shows where we are with our tax rates. This is a little sobering.
http://www.aei-ideas.org/2013/01/were-taxes-really-higher-in-the-1950s/
And again
Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports
Just a little Google gets:
a USA Today analysis found last year that if we include everything — federal, state, and local taxes, including income, property, sales, and other taxes — the percentage of personal income that’s paid in taxes is still at its lowest level since 1950.
http://www.usnews.com/opinion/blogs/robert-schlesinger/2011/02/08/under-obama-taxes-reach-lowest-level-since-truman
Actually, as a share of the nation’s economy, Uncle Sam’s take this year will be the lowest since 1950, when the Korean War was just getting under way.
And for the third straight year, American families and businesses will pay less in federal taxes than they did under former President George W. Bush, thanks to a weak economy and a growing number of tax breaks for the wealthy and poor alike.
In the current budget year, federal tax receipts will be equal to 14.8 percent of the Gross Domestic Product, or GDP, the lowest level since Harry Truman was president. In Bush’s last year in office, tax receipts were 17.5 percent of GDP, just below their 40-year average
http://www.foxnews.com/us/2011/02/07/measure-federal-taxes-lowest/
mid complaints about high taxes and calls for a smaller government, Americans paid their lowest level of taxes last year since Harry Truman’s presidency, a USA TODAY analysis of federal data found.
http://usatoday30.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm
While I don't have an opinion
While I don’t have an opinion on whether taxes are “too” high or low, I don’t think you can look at overall rates. If you look at the NYTImes chart the drop has not been that much for anyone except those in the top 20% and the most for those in the top 10%. I think we need to be accurate and look at how much tax rates have affected each individual income bracket and not an average. To say across the board that we are paying less might be accurate but it doesn’t indicate how much less the upper brackets are paying.
All these stats can be skewed in any direction but I’ll go with the NYTimes over USA Today and Fox News. And I certainly am not in line with tea party-ers screaming about their taxes. Facts are most of them are probably in an income bracket that isn’t paying much at all.
And I applaud Obama for his policies but I’d like to see those upper echelons paying a larger share of what they make. They get write-offs galore on top of having had their brackets cut and the only people benefiting in this economy are those upper income people. I think corporate and upper income level taxes should go up. Of course it might be difficult to get something through a Congress where almost everyone is a millionaire or more
One of your sites stated that the number in the top 1% was low so it didn’t affect overall rates much. But I wonder, when the top 1% is holding the 42% of the nations wealth according to Think Progress, I wonder how accurate that statement can be. If they have a precipitous drop in tax liability and now hold 42% of the wealth why the big drop in tax rates for these people.
But again, whether people are paying more or less on income taxes doesn’t really factor into how this particular town’s property and school taxes are faring. You can’t take an average for the entire country and say it applies to what’s happening here.
Care to elaborate?
“Facts are most of them are probably in an income bracket that isn’t paying much at all.”
Most of who?
Tea partiers. I know that's a
Tea partiers. I know that’s a little judgmental of me but there are quite a few people who identify themselves that way where my family lives and most of them are on social security or make subsistence salaries. So it’s just a judgment based on personal experience. So fact is every tea party member I’ve met so far pays little or no tax and yet the rallying cry of the tea party is that taxes, meaning federal taxes, are too high.