Friday, December 18, 2009
Strategist looks at town trends
“Demographics work strongly against Carlisle,” observed John Ballantine, Carlisle resident, former Selectman and senior lecturer at Brandeis in finance and strategy, when he visited the Structural Financial Planning (SFP) Committee on December 9 to offer projections on town demographics over the next five to ten years. He noted that as retirees begin to outnumber professionals, average household income will fall, and pressure to reduce taxes will increase. Town Treasurer Larry Barton agreed to rework the long-term plan to reflect this likelihood.
Slow recovery, aging population
Ballantine noted “The consensus scenario of the Fed [Federal Reserve Bank] and forecasters is for a slow recovery starting in 2011 to 2012.” Expectations are for average income within Massachusetts to be flat for the next five years, he added. In Carlisle’s case, the aging of the population will enhance that effect, as incomes drop with more people retiring. “Income is probably less now” than it was two years ago, said Ballantine, pointing to layoffs and retirements, as well as the reality that “the median income of those working is essentially flat.” This means that taxes as a percentage of income will rise even without higher rates.
The shift in age within the town has been dramatic: where Carlisle had 438 residents over 60 in 1990, there are now 1,480, and this number is growing. On the other hand, the young parent population is down 75%. Replenishment of the younger population is slow, as “it doesn’t look like we have a lot of young families moving into the state,” said Ballantine. In addition, current Carlisle seniors have proved more apt to stay in town, and a recent COA survey indicated those now entering their sixties also hope to remain here indefinitely.
Barton, who keeps the long-term financial model, had been working with an assumption of slowly increasing incomes in Carlisle. That model is a spreadsheet that allows assumptions about spending and growth to be tweaked and tested for future impacts. Barton and Ballantine agreed to confer on the new, lower income projections so the model can be improved. Barton will then generate more accurate calculations of taxes as a percentage of household income five and ten years out, and the new numbers will be reported at a future SFP meeting.
School population low for next five years
The other concern raised by the economic downturn is the impact on school populations. The number of home sales in Carlisle is about 2/3 of the peak years, at “64 or 65 last year compared to 90 in the good years,” said Ballantine. In spite of slow real estate sales, 41 new Carlisle School students moved into town last year. “Carlisle is still an attractive community for kids,” He observed. “There’s still a decent inflow of students.”
Recovery is expected to be slow in real estate, where Carlisle prices are currently down 20% to 25%. There should be some improvement starting in 2011, but now “prices are bumping along the bottom,” said Ballantine. He concluded that the Carlisle School population “will continue to drop to 640 or 650, maybe less depending on move-ins.” The number of students will remain low until at least 2015, when the children of the baby boomers will start to have school-aged kids. In the past, immigration has had a strong influence on school populations in Massachusetts, but current laws make it unlikely this will be a source of much future growth.
No one knew why Carlisle seniors stay longer than the seniors of other towns. David Freedman feared that “When change comes, because we’re an outlier, it could be dramatic” with many seniors leaving at once. It was agreed this is a population to watch.
Ballantine was asked to compare Carlisle’s demographics to Concord’s, but noted that Concord does very little projection or analysis of population trends. He will take a look at student populations of both towns and confirm that the assessment trends being used by the Concord-Carlisle High School seem accurate. ∆
© 2009 The