Amherst Center: Mr. and Ms. Amherst make family budget

Published on June 29, 2007

A $68 million budget, 852 employees across over 100 departments, and 35,000 residents (12,000 or so living in dorms). The complexities of Amherst's budget can reduce the average Town Meeting member to tears on any given night - and there are plenty of nights to provide the opportunity.

Deep into the budget debate at Town Meeting, Select Board Chairman Gerry Weiss offered a novel way of looking at the town's budget. By dividing the big numbers by 1,000, he reduced the budget to a scale that might compare to an average Amherst family.

We'd like to continue the metaphor, to look at what the family budget trends look like for our hypothetical family, "Mr. and Ms. Amherst" So our family, the Amhersts, spent about $68,000 last year.

As every family knows, expenses go up every year with inflation, and it's no different for the Amherst family. But recently, health insurance, heating oil, gas and electricity bills have been really going through the roof.

The problem is, for the past few years, the family's income hasn't kept pace. This wasn't always the case, so the Amhersts have been having trouble dealing with their changed circumstances.

Fortunately, the family has a rich uncle on Beacon Hill in Boston who sends out yearly checks to help them along. During the late-1990s Internet boom, he was making a killing on Wall Street and was able to send the family a nice check every year - in fact, it covered about 33 percent of the Amhersts' expenses in 2001. Sadly, Uncle's bubble has burst, and he's cut back again on the checks - down to 28 percent of annual expenses in 2007.

The Amhersts' income from their own jobs was about $47,000 last year. They would like a raise, but the boss won't give more than 2.5 percent each year unless he's convinced there's a good reason - and lately he hasn't been convinced. He's still talking about the one raise above that amount that he gave back in 2004.

So between their jobs bringing in $47,000 and the Boston uncle (and his cousin in Washington, D.C.) kicking in about $17,000, the Amhersts brought in about $64,000 last year - but they spent $68,400!

They made up some of the difference in various small pieces: $1,800 from side businesses (water, ambulance, etc.), $824 left over in the checking account from the previous year, $530 from an annuity (library endowment), and $263 from gifts (grants) and various other sources. But even that wasn't enough, so they had to dip into their savings for $1,000.

During the boom times, the Amhersts were able to build up a nest egg of about $9,000 in their savings account. But since the Boston uncle has cut back on the checks, they've been spending from the savings account each year to make ends meet. Their savings got down to about $3,000 this year, which isn't much if an emergency comes along.

The family just had their annual family meeting to figure out their budget for next year. The good news is they've stopped raiding their savings account. And it looks like they may have spent less than planned this past year, which would mean that their savings may actually increase next year by $1,000 to a total of $4,000. Not enough for comfort, but at least it's moving in the right direction.

The bad news is, because of the rising health insurance and energy bills and the Boston uncle's cutbacks, for the past four years they've been cutting spending on important basic needs like food, clothing and their house (schools, public safety, public works). The house is starting to look a bit ratty, everyone's cranky, and there's no agreement on what to do about it.

The family meeting was exhausting. The Amhersts spent more than two hours trying to figure out whether to budget $12 so they could go to Puffer's Pond. And they spent several nights just trying to figure out if they could afford $70 for a second pool pass. All that talking and they weren't able to discuss the big problem - the $3,000 gap between what they were bringing in and what they were spending - in any coherent way.

We here at Amherst Center suggest that the family needs to stop spending all its time arguing about the small potatoes and spend some more time focusing on how to increase their paychecks to pay for their core needs.

Mr. and Ms. Amherst have a lot of great qualities that are in demand these days and could help them increase their income, but they don't seem to realize it.

It sure would be easier for the Amhersts if their neighbors would rally around them for support in their new endeavors. We here at Amherst Center surely will!

Amherst Center is a monthly column that seeks to present local issues from a centrist viewpoint. It is written by Town Meeting members Baer Tierkel and Clare Bertrand and School Committee member Andy Churchill.