In this recession, much has been said about who is feeling economic pain and who is not. Indeed, while much is made in the media of the skyrocketing cost of living, the housing and credit crises and their economic fallout have not impacted everyone equally.
Affluent consumers are not affected by the recession in the same way that the middle class is. According to the results of a survey conducted by Phoenix Marketing International’s Affluent Marketing Practice, the unstable stock market, eroding value of the dollar, and soaring gas prices have not curtailed the spending habits or altered the positive economic outlooks of the majority of the country’s wealthy households. More than half—56 percent—of households with investments greater than $250,000 stated that their discretionary spending remained the same, while another 20 percent actually increased their spending during the same period.
Close to home, income statistics support the reality that those who live in the wealthiest towns are faring far better than their poorer neighbors. A recent article in the Boston Sunday Globe’s Globe South section, written by Matt Carroll (son of Norwood’s town manager, John Carroll), provided an enlightening analysis of income data and defined the socioeconomic profiles of several Eastern Massachusetts towns.
In his article, Carroll presented income figures from the Internal Revenue Service, as well as insights from specialists in economics, political science, and regional affairs. Most telling is a quote from Marc Draisen, executive director of the Metropolitan Area Planning Counsel, who acknowledged that society is becoming more segregated by income.
“The income of the wealthy has gone up much faster than the middle-class or low-income families,” Draisen said. “That definitely plays itself out in the quality of services you can afford at the local level, including schools.”
Proponents of building a new $100 million-plus high school in Norwood have compared Norwood to neighboring towns, suggesting that Norwood can afford a high school like the new facility in Westwood, or that Norwood’s comparatively low real estate taxes should be raised through overrides to be more in line with the tax rates of surrounding towns.
According to the 2005 average income data reported in the Sunday Globe article, Westwood not only had the highest average annual income among area towns in 2005 at $173,588, but also showed the largest increase in income: 35.1 percent between 2001 and 2005.
In stark comparison, Norwood was among the six Metro Boston zip codes that reported the least growth in income during the same period, at less than 5 percent, with an average 2005 annual income of $54,747. The towns most often compared to Norwood when town officials make the argument for higher taxes also reported significantly higher incomes than Norwood, including Canton at $96,854; Dedham at $76,864; and Walpole’s three zip codes at $82,930, $69,849, and $68,564.
Sharon, the only town registering negative growth, down 1.4 percent between 2001 and 2005, still reported an average annual income of $111,324 in 2005.
Town officials and residents who promote the idea of future overrides will argue that Norwood’s residential tax rate, which is offset by a healthy commercial tax base, has plenty of room to increase to be comparable to the residential tax rates of area towns. But they fail to mention that Norwood’s average annual income, from which these residential taxes must be paid, is considerably lower than the average incomes of its neighbors.
Many other Massachusetts towns with lower average annual incomes cannot afford to build, operate or maintain the deluxe facilities that wealthy towns have. Unless state aid to poorer towns can bridge the income gap—and that is not likely to occur—less-affluent towns must live within the means set by the income of their residents.
Norwood resident Candace Leary’s Midpoints column appears Mondays in the Transcript.
