Worcester Business Journal

wbjournal.com | September 17, 2018 | Worcester Business Journal 17 Acton 2007 0.0% 3.2% $7,926 2017 2.1% 5.2% $10,696 Fitchburg 2007 0.0% 0.3% $2,523 2017 4.5% 4.0% $3,535 Framingham 2007 2.6% 1.4% $4,564 2017 7.0% 6.1% $6,138 Franklin 2007 7.2% 0.7% $3,872 2017 2.8% 3.2% $6,004 Hudson 2007 0.9% 5.6% $3,607 2017 1.9% 3.1% $5,822 Leominster 2007 7.6% 5.5% $3,003 2017 9.5% 6.3% $4,565 Marlborough 2007 5.3% 2.6% N/A 2017 7.6% 7.3% $4,941 Milford 2007 10.0% 2.0% $3,756 2017 23.8% 6.0% $4,863 Shrewsbury 2007 0.6% 4.6% $3,598 2017 0.7% 4.9% $5,274 Worcester 2007 0.5% 0.4% $2,995 2017 2.8% 0.9% $3,898 Fiscal Rainy day fund Free Cash as Average single Municipality Year as a % of budget a % of budget -family tax bill Note: Fiscal 2018 was not yet available Source: Massachusetts Department of Revenue Of the 10 largest communities in Central Massachusetts, nearly all have more rainy day funds now than they did before the Great Recession, though some have far more stashed away than others. Each of the 10 largest communities have more free cash than 10 years ago, a sign that revenues have exceeded projections during the long period of economic expansion. Rainy day fund growth Let's talk. FLOURISH. SMART BUSINESS BANKING WITH SCU We've got you. 888.599.2265 | southbridgecu.com Membership to SCU requires a one-time dividend-earning deposit of $5.00 in a prime share account. Equal Housing Opportunity. Equal Opportunity Employer. Federally insured by NCUA. NMLS #616673. MassMEP is proud to present the first regional event showcasing the emerging technologies being developed by the Manufacturing USA Institutes. THURSDAY, OCTOBER 4, 2018 8:00am to 1:30pm | DCU CENTER | WORCESTER, MA Join us and discover future technologies opportunities for U.S. businesses and education institutions. Dean Kamen, Executive Director, ARMI | BioFab USA Featured speakers include: Lt. Governor Karyn Polito House Speaker Robert DeLeo Tracy Frost, Director, DoD Manufacturing Technology Dean Kamen, Executive Director, ARMI | BioFab USA REGISTER TODAY (Registration Fee: $50) MassManufacturingSymposium.org B A N K I N G & F I N A N C E F O C U S "ey get it," he said. "We keep them informed, and they understand the benefits." More rainy-day funds For the largest cities and towns in the region, rainy day funds generally far exceed what they were before the Great Recession. But there's a bit of a catch: rainy-day funds are higher in part because so are property tax bills. In Worcester, for example, the city's stabilization reserve fund was about $2.6 million at the start of the fiscal 2007. By the start of fiscal 2017, the account had ballooned to $18 million. But the aver- age residential property tax bill during that time rose by $903, or 30 percent. Others grew by even more. e Massachusetts Department of Revenue doesn't track average commer- cial and industrial tax bills in cities and towns, but tax levies – the total amount of property and personal property taxes collected – have risen considerably in most of Central Massachusetts' largest communities in the past decade. Hudson, for example, collected 64 percent more in property taxes in fiscal 2018 than it did a decade prior, and Franklin, Shrewsbury and Worcester each collected more than 50 percent more during that stretch. e annual revenue collected from Worcester's commercial and industrial tax base grew the most in that time, by 82 percent, or more than $41 million. More long-term obligations Although rainy-day funds are up from a decade ago, the fiscal picture gets complicated by other factors. Pension and employee retirement funds have generally skyrocketed in the years since the recession, and many communities have just begun paying down those obligations, statistics show. In Fitchburg, for example, unfunded pension liabilities have grown by $19 million since 2012. In Marlborough, general debt has risen by $92 million since 2011, and in Framingham, it's up by $88 million. Steve Ng, a finance professor at Clark University in Worcester, cautioned communities' higher savings levels may mask a lack of urgency in dealing with pension or retiree healthcare costs known as OPEB, or other post-employ- ment benefits. "I'm not sure if that's going to be sufficient," Ng said, generally speaking of communities' savings and his doubts for whether those amounts can ultimately cover long-term obligations that can oen hit tens of millions of dollars. Continued on next page

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