North Andover says the state is nothing but a tax deadbeat

NORTH ANDOVER–With the help of some thoughtful planning, the town of North Andover has been able to enjoy economic development without losing its historic character. About 27,000 residents coexist with such employers as Merrimack College and the Lawrence Municipal Airport. But in one sense, North Andover is among the Commonwealth’s biggest losers, and town leaders are looking to do something about it. Tired of waiting for full compensation for land that was taken over by the state, North Andover has joined STAR (Stand Tall, Act Responsibly), which began its existence as Small Towns Against Repression, a militant-sounding organization of rural communities that has recently grown to include nearly one-third of the state’s municipalities.

When the state acquires land within a city or town’s boundaries, that municipality loses that land from its tax rolls. Yet it still must provide police, fire, and road-repair services to the area. To compensate for these expenses and for lost tax revenue, the state began the PILOT (payment in lieu of taxes) program in 1910, with the amount due host communities determined by statutory formula.

But STAR members say that the state has reneged on these reimbursements to towns and cities across the Commonwealth. And North Andover is the fourth-largest casualty of PILOT penury. The state owns 91 parcels of land in town, including 1,967 acres in Harold Parker State Forest valued at $32.7 million and 60 acres in Boxford State Forest valued at $684,000, according to the Bureau of Local Assessment. (North Andover ranks 102nd among the state’s 351 cities and towns in terms of land area.) In 2003, the town received only $144,559 of the $559,718 owed, according to the North Andover Citizen. Over the last six years, the town has been shortchanged by an average of $311,000 per year. Only the towns of Edgartown, Framingham, and Sunderland are owed more PILOT funds from the state.

Town leaders in North Andover say they are joining the STAR movement because there is power in numbers, as well as in principle. Selectman Rosemary Smedile says that despite the state’s current budget problems, it has a responsibility to deliver the promised funds.

“There is a moral piece to this because the state has pledged this money in the past, and [the lack of payment] has become a burden to the town,” says Smedile, comparing the state to deadbeat dads who won’t pay court-ordered child support. “Children and public safety suffer.”

Smedile’s sentiments are not universal, even among smaller towns without much of a tax base to make up for the loss of PILOT money. In the central Massachusetts town of Berlin, for example, some residents want the state to purchase more conservation land, and some town officials are willing to give up their PILOT claim to get what they want. Because development of the land would increase the strain on town services, they say, Berlin would come out ahead on the conservation deal even without PILOT funds.

“The bottom line is that by taking beautiful natural areas out of the grips of developers, the state is doing local communities and future generations a lasting service,” Walter Bickford, chairman of the Berlin Conservation Commission, told the Worcester Telegram & Gazette. “The state should not, in addition to this wonderful gift of free open spaces to local towns, be pressured by local politicians into picking up the tab for other town matters beyond the demonstrable direct costs to towns for maintenance and protection of state lands.”

According to a 1975 law, the state’s annual PILOT obligation to each community is determined by the fair-market value of state-owned land (which is determined by the state Department of Revenue) and a town’s average commercial-property-tax rate over the previous three years. Under the law, state-owned land is defined as that “specifically used as a fish hatchery, game preserve, wild life sanctuary, state military camp ground, state forest or other land held for other state purposes.”

If Massachusetts towns were receiving these funds in full each year, STAR probably wouldn’t exist. But the gap between what is paid and what was promised keeps rising. In 1993, the state paid $6.5 million of the almost $18 million demanded by cities and towns. In 2003, the state forked over $10 million of the requested $30.8 million.

STAR was formed in 1996 to represent mostly small towns in western Massachusetts, like Adams, home to a large portion of Mount Greylock State Reservation, and Washington, where October Mountain State Forest is located. Eventually, the group did claim some credit for prying loose $10 million in overdue funding. It wasn’t all that they wanted, but it was better than the complete lack of funding proposed by then-acting Gov. Jane Swift–who, ironically, hailed from the western part of the state.

The organization lay dormant for a few years, but revived last May when the Legislature refused to appropriate $21 million in PILOT payments that were earmarked for various cities and towns. This time, STAR really spread its wings. Princeton town administrator Dennis Rindone, one of STAR’s organizers, said the group obtained a list of the top 30 PILOT fund losers in the Commonwealth from the state auditor’s office. (“We want to remain credible, so all of our numbers came from the state,” Rindone said. “It’s not something we made up.”) Surprisingly, 25 of them were communities in the eastern half of the state, including Concord, Bourne, Upton, Salisbury, and North Andover.

From its initial membership of 14 sparsely populated towns in the western part of the state, STAR now includes 110 cities and towns across Massachusetts, including voter-rich suburbs. The state’s most populous town, Framingham, was one of the first communities in the eastern part of the state to join. It was also one of the few towns that saw its PILOT funding increase from 2001 to 2002 (when it received $490,000), but it still gets far less than town leaders feel they are owed.

Members were briefly pleased by a proposal from Gov. Mitt Romney that would allocate $173 million in PILOT payments for fiscal year 2004. Then they read the fine print, which explained that most of the funds would go to cities that host state office buildings and courthouses (neither covered by the PILOT program previously), and not to towns with large blocks of state-owned conservation land. The governor’s formula would also have changed the way towns and cities receive all state aid–including education aid and lottery aid. Legislators have not been receptive to the idea because communities will be unable to predict how much aid they will receive, state Rep. Daniel Bosley, a North Adams Democrat, told the Berkshire Eagle.

All STAR members are now keeping tabs on the local services they provide to state land. These data will be used for a study to determine exactly how much money towns spend on land that they can’t tax. Expenses include sending police to investigate criminal activity, putting out fires, rescuing victims of climbing and snowmobile accidents, and cleaning up illegal dump sites.

Not every STAR member community is in it for the money. Southwick and Easthampton have joined the group despite being owed less than $5,000 for the small parcels of state-owned land within their boundaries. With a membership fee of $25, it’s easy for towns to join STAR and demonstrate their support for other cash-strapped communities that are waiting for money they are owed. “Part of it is solidarity, and part of it is really believing that the state should have to pay their taxes,” says Florida town administrator and STAR administrative coordinator Jana Brule. “Everyone else has to.”

But as a recruitment device, there’s nothing like municipal self-interest. When STAR emissary Rindone visited North Andover town selectmen at a September board meeting, he informed them of the magnitude of funds owed to them. In addition, town administrator Mark Rees told the board of selectmen that over the past three years, the fire department has answered 129 ambulance calls to the Harold Parker State Forest, according to the Citizen, costs which the town has to incur. Fire Chief William V. Dolan has estimated that it costs the town $1,350 to respond to a single false alarm. The elected officials agreed to join the STAR cause.

“This has been something that [state Auditor Joseph] DeNucci’s been examining for some time,” Glenn Briere, director of communications for the office, told the Lawrence-based Eagle-Tribune, adding that the PILOT program was under review. “The auditor has been a consistent advocate for full funding,” said Briere. “It’s an important law. Particularly, smaller towns in the Commonwealth depend on this funding.”

Monies previously allotted to a variety of programs have shrunk dramatically as state leaders scramble to close the Commonwelath’s budget shortfall, but one North Andover legislator is concerned that the lack of funding puts an added drain on the communities it affects. “Obviously, if there is a drain on town services [because of] the state, the state should be doing everything in its power to pay for those services,” state Rep. David Torrisi, a Democrat, told the Eagle-Tribune.

If a home or business owner refused or was unable to pay their local taxes, town officials could place a lien on their property. Not so with state land. After Rindone spoke at the September selectmen’s meeting, town leaders complained to lawmakers, but nothing changed. “The number they give you is the number they give you,” Selectman Smedile told the Eagle-Tribune. “You can fight it all you want, but if that’s what you get, you’re stuck with it.”

While North Andover could obviously use the PILOT funding in the current economic climate, the money owed to them this year makes just a dent in their $62 million budget. But the tiny western Massachusetts town of Washington only received $26,000, a drop from last year’s payment of $102,000–40 percent of all the state aid it received, including money for schools and roads, out of a total budget of $650,000.

For now, Rindone and other STAR members are traveling to other select board meetings to speak with town leaders, and they’re cautiously waiting to see if Romney will fund the program next year. “We’re good stewards to [the state’s] property and we provide good services,” Rindone said. “We’ll have to see in January if Romney fully funds the PILOT program. If he puts it in the budget, we’ll have to get the Legislature to support that.”

And they’ll go there with new allies. As more voter-rich towns join STAR, Rindone believes that more lawmakers will fight for money owed to their districts. North Andover Selectman Mark Caggiano agrees that there is power in numbers. “It becomes so much easier when you’ve got a whole crowd of senators and representatives saying, ‘Hey wait, my people are involved, too,'” Caggiano told the Eagle-Tribune.

“I think the PILOT program will have greater success now because we’re picking up new legislators that we never had before,” says Rindone. Take Plymouth, which recently joined STAR; Plymouth’s state senator is Therese Murray, chairman of the Senate Ways and Means Committee. “That’s got to make some difference,” says Rindone.

Victoria Groves is a freelance writer living in Chelmsford.