Our opinion: Stabilization fund idea has merit
An auditor’s recommendation that Pittsfield raise property taxes to create a stabilization fund may not be popular with city voters, and it is not the auditor who would court the wrath of voters next year at the polls if such an action is taken. Politics aside, however, city officials have to consider the recommendation seriously.
Thomas Scanlon Jr. of the Deerfield firm Scanlon & Associates raised this idea last week before the City Council’s Finance Committee (Eagle, April 6). The issue involves the city’s declining levy ceiling which governs its ability to raise taxes within the parameters of the Proposition 21Ž2 law of 1980. Pittsfield’s declining property values are lowering the ceiling, and it is the auditor’s recommendation that a stabilization fund be created that Pittsfield would have the option of drawing on as it approaches the 21Ž2 levy limit.
The Berkshire economy being what it is, it is difficult to ask voters to approve a Proposition 21Ž2 override. Pittsfield voters have not been asked to, and the familiar complaints about taxation aside, residents have not been taxed irresponsibly. The city is currently $8 million below its levy limit, but the declining levy ceiling could cause that $8 million buffer to evaporate.
As Mr. Scanlon explained to the finance committee, bond companies regard the taxing capacity as a reserve fund, which keeps a municipality’s bond rating high. A stabilization fund would protect the city against the possibility of a lowered levy ceiling pushing it to the Proposition 21Ž2 limit, which is the case with North Adams, according to state Department of Revenue figures. North Adams, which just lost its hospital and more than 500 jobs, is not in an ideal position to create a stabilization fund, but Pittsfield is at this point. While there remains some flexibility, Pittsfield officials must pursue the heads-up it has received from its auditor.