This document attempts to examine the growth of levies in Franklin from 1988 until 2005. It adjusts growth for the consumer price index (CPI) and population. The results, methods and references are presented here; the calculations are done in an accompanying spreadsheet. The technical methods are included in brackets[ ]. It's okay if you don't understand them; they are included for those who wish to check our work.

First, the definition of a levy. A levy is the portion of a budget that is paid for by the taxpayers. Take the municipal budget, if it were $1,000,000 and the state contributed $200,000 and other revenues totaled $50,000 then the taxpayers would have to come up with $750,000. There are four different levies we pay in Franklin: County, Municipal, BOE (Board of Education) and Other. "Other" includes the library, fire departments and open space. They are handled differently because they are each taxed in a slightly different way. In 2005 the total levy was $147M, 14.4% County, 17.5% Municipal, 61.2% BOE and 6.9% other. Because the library was originally part of the municipal budget to avoid complications this calculation will maintain that arrangement.

The analysis begins with an examination of the CPI, which is a measure of inflation. Without it an inspection of levies over time would be meaningless. If government is to continue to provide the same services year-to-year, inflation demands that the levies MUST increase. Figure 1 shows the effect of inflation since 1988 (blue line). From it we can see that if it took $1.00 to buy something in 1988 you'd need $1.73 to buy the same thing in 2005. Thus if the levy grew to 173% of its 1988 value there would be no TRUE increase in spending. [This line is obtained by dividing the CPI for each year by the CPI for 1988.]

Another correction that must be considered is population growth. Again, if government is to continue to provide the same services year-to-year population growth demands that the levies MUST increase. Figure 1 also shows the expected growth due to population combined with the CPI. From the magenta line we can see that due to the increase in population and inflation we should expect the levy to increase 2.5 times.

The calculations above were done to demonstrate inflation and population growth's expected effect on taxes. We will use however a slightly different method to look at the growth of levies. First using the CPI we will take the levies for every year and convert them to 2005 dollars [Levy for year X times the CPI for 2005 divided by the CPI for year X]. This produces the levies in constant (2005) dollars. Next we will divide the levies in constant dollars by the population of Franklin in that year. This will produce levies in constant dollars per capita Franklin population.

Figure 2 shows those results. One point, which is no surprise, is that the majority of the total levy is due to school spending. A more subtle point, that is easier to see in Figure 3, is that the county levy corrected for inflation and population has actually decreased. Figure 3 looks at percent change. [Divide the values for each type of levy in Figure 2 by the value of that levy in 1988]. Note that "other" is not included because its components are a very small portion of our tax bill and because there was no open space tax in 1988 making comparison mathematically problematic. From this we can see that even correcting for inflation and population school and municipal spending have increased by 50% since 1988.

The above analysis shows that Municipal, BOE and total levies and therefore taxes are increasing faster than can be explained by population and inflation. What it doesn't answer is what is causing the growth. The answer is NOT, repeat not assessments. Assessments accounts for only 1.3% of the increase in home owners' property taxes and has NOTHING to do with the levies. Levies are set by budgets, assessments do not affect levies. (There are 2 exceptions, by voter approved referenda the open space and library taxes are affected by assessment. For open space and the library combined we pay 8.33 cents per $100 of assessed home value, about $263 for the average home per year).

The answer is increased spending. The question is what is causing the spending. The list of possibilities include but is not limited to, increasing the police force, improving roads, adding buildings, adding services, fulfilling state and federal mandates, increased antiterrorism efforts, increasing services. Other possible reasons for growth are increased healthcare costs without a comparative increase in employee cost sharing, unneeded or blotted projects, over development and of course spending waste. This analysis does NOT prove that waste exists; just that inflation, population and enrollment cannot explain the increase in taxes. It does demonstrate that increases in population and enrollment correlate with even larger increases in levies and therefore taxes.

Everything in this document above this point is the result of objective calculations made on data supplied by the township and the federal government. These calculations have been checked by Township officials and are to the best of our knowledge correct and unbiased. The following is opinion but we also believe it to be logical and true.

Two ideas come to mind:

1. To get the complete story we need to work with the Township to annotate this graph to show events such as adding police officers or increasing health care costs. With that we can better see what is driving spending. Then curb that spending.
2. It is clear from the analysis that inflation, school enrollment and population growth result in the growth of levies. We need to limit population and enrollment growth in Franklin. Clearly as we add people to Franklin the added cost of serving both the people and the students grows faster then contributors to taxes. Thus taxes increase. These factors can best be limited by setting appropriate zoning and then sticking to that zoning. A common practice of developers is to donate relatively small amounts of money or services to the township (100% legally) in return for a zoning change or variance that allows increased densities. This typically results in a small revenue for the township, a huge profit for the developer and increased taxes for all of us. We need to stop allowing developers to build at increase population densities.

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