Q: What's this vote about?
Voters in Town of Lexington will be asked to vote to approve a debt exclusion to pay for construction of vital infrastructure for our schools and public safety.
The projects are:
Q: Why do we need to do this work?
These facilities are all operating in substandard buildings that are too small to handle the current and future needs of Lexington. Investing in these projects will improve the education system and public safety for all of Lexington. The buildings for the Fire Station Headquarters and Maria Hastings Elementary School are both past the end of their useful lifespan. The Lexington Children's Place is relying in part on space borrowed from "Old Harrington" that is not up to current building codes for public schools. Replacing these buildings is part of the town's master plan.
Q: What happens if this vote doesn’t pass?
If the town does not vote to approve the debt exclusion in December, it is difficult to predict how Lexington's local government will react. It is possible that the plans for Maria Hastings Elementary School would be shelved for the time being. Funding construction of the Fire Station Headquarters or the Lexington Children's Place might be feasible using within-levy debt, but this would require significant cuts in other parts of the Town's operating budget. In other words, it would impose service cuts to pay for the capital investments we need.
Q: What can I do?
You can support the YES! For Lexington campaign by:
Q: What is “Proposition 2½”?
“Proposition 2½” is a state law that controls the total amount of property tax (the tax levy) that the Town can collect annually. Under this law, the tax levy is capped by the levy limit. Every year, Lexington’s levy limit grows by 2.5%, plus any increase in tax revenue resulting from new growth (i.e. new construction and major renovations). The only way the tax levy can exceed the levy limit is if voters approve a debt exclusion. A detailed explanation of Proposition 2½ may be found here.
Q: What is a Debt Exclusion?
To fund capital projects, our Town borrows money from the public by selling municipal bonds. These bonds are a form of debt that the town pays off (with interest) in annual installments over a period of up to 30 years. Debt payments for smaller projects come from the normal tax levy, but the levy limit under Proposition 2½ effectively constrains the amount of debt that can be funded this way.
For major projects, Proposition 2½ allows voters to exclude particular debt payments from the levy limit. With voter approval, the town may raise the tax levy above the levy limit to fund debt payments for specific projects.
The vote on whether to allow debt payments to be excluded is commonly referred to as a “debt exclusion referendum”. A debt exclusion must be approved by a majority of the Town’s voters.
Q: How is a Debt Exclusion different from an Override?
A debt exclusion grants permission to exceed the levy limit for a period of years, but it does not change the levy limit. The permission is granted for a specific project, and the permission expires when the debt is fully paid.
By contrast, an operating override grows the levy limit for the current year faster than the 2.5% plus new growth specified under Proposition 2½. This creates an additional, and permanent increase in the tax levy. The additional tax revenue may be used to fund any municipal expense going forward.
In short, debt exclusions are used to fund large capital projects, while operating overrides are used to grow the annual operating budget of the Town by more than the normal constraints allowed under Proposition 2½.
Q: What will the tax increase be?
The exact tax impact will depend in part on the financing scenario chosen by the Town. Currently there are three scenarios under consideration, and each uses money saved in the Capital Stabilization Fund in different ways.
For a home of median value ($831,000), the annual tax impact from all projects is currently estimated to start at $360 in the first year, and to peak at between $423 to $503 in FY 2021 (depending on the financing), then fall to $330 by FY2026.
See the Board of Selectmen's presentation for more details.
Q: What options are available if I can’t afford the tax increase?
There are several state and local programs that offer tax relief, in the form of exemptions and/or deferrals, to qualifying property owners. These include, but are not limited to, certain exemptions for the elderly, low-income households, and disabled veterans. Information about these programs is available in a brochure published by the Town.