HOUSE TAX FAQ

 

0.      When will the Tax start being effective, and how will it be paid?

A0. The House Tax will NOT have immediate effect. Residents signing the lease for next academic year (starting August 2007) will pay it together with their monthly Edgerton rent.


1. Why do we need a new House Tax?
A1
. EHA (Edgerton House Association) Officer Board has considered the question of House Tax for several past years. While, it was always felt that a house tax will benefit the house, the decision kept getting deferred due to variety of reasons. With the introduction of new Housemasters, EHA will lose a stream of revenue amounting to about $8200. This was received by the RLAs who used to 'donate' it to EHA as the best body to use this money. The money will now go to Housemasters who will utilize it to organize events of their own. The House tax, which was always deemed beneficial now became crucial to maintain revenues and sustain EHA functioning.  The house-tax (@$5 per month per resident) will bring in revenues of around $10.5K-$10.8K over one year, which will cover this sudden shortfall as well as allow us implement a moderate expansion of activities and house facilities in future in line with what that previous boards had envisaged. The money has two uses 1) Social programs 2) Maintenance and Expansion of House Facilities (TV, Cable TV, Gym, Computer Room, Movie DVDs). It is also probably worthwhile mentioning here that a house tax as this one is common practice on other dorms on campus.

2. If the Housemasters are going to spend the money on social events in any
case, why do we need more money?
A2.
Only part of the RLA money was actually spent on social events. Much of it was used for behind facilities as well as sports, IT and other activities. Also, the purpose behind having new housemasters was not to substitute the functioning of EHA but rather to complement and augment it. For instance, the housemasters will aim other type of events, as bringing alumni to the House, events aimed at graduating students, or catered dinners. EHA won’t have any control on those events. Indeed, one of the reasons for bringing in new Housemasters was to supplement and increase the level of social activities. If the EHA rolls back its activities as Housemasters start theirs, it will defeat the very purpose of their introduction in the first place. We will take care to see there is no overlap, but we do not expect a scale-down.

3. Still, earlier we had a budget of $8200. Now, we have almost $20K give or take a few hundred dollars. Do we need an over 100% increase?
A3. As mentioned in point 2, EHA activities should actually be considered independent of Housemasters. Also, the RLA money while a significant source of EHA's revenues is far from its only stream. Through funds raised through GSC and other MIT sources, EHA had a net spending in 2006 of about $20.5K. (Thus the RLA money contributes to about 40% of our budget) With the surplus brought in by House Tax, the total budget is now about $23K, which is a modest increase of about 12.5%.

4. Why were we not given an advance notice?
A4.
While the possibility of House Tax was anticipated by the Old board itself, the exact impact of the Housemasters' introduction on EHA's revenues was not clear until a month after the new board was appointed. At that point the board had to take decision in about a week, so that Graduate Housing can review and approve it and incorporate in the lease agreement. House tax was needed for EHA to keep functioning. The board however wanted to ensure that all the costs be made transparent to the residents before they signed their new leases. Hence the decision to implement the house tax in a hurry without a formal information session.

5. What about the new funds that Housemasters are planning to get?
A5.
These are great action items and we will work our best to secure them, however, these are long-term plans, yet to be explored and fructified and there are no guarantees here. In short, this is not something we can count on yet.

6. How do you plan to utilize the funds?
A6.
Bulk of the funds will be utilized to sustain EHA's current activities. We expect to build a surplus over time. There have been numerous suggestions and the board
will also conduct a survey amongst members to choose and prioritize. We are planning to conduct the survey soon and a more detailed plan will be made available after that. As always, all spending details will be transparent and accessible to residents.

7. How will the surplus money be utilized?

A7. As the cash-flows through house-tax will actually be realized on a monthly basis, the house will not actually accumulate a significant surplus roughly before 6 months into the next year (Feb ’08.) Also there is still some ambiguity about how some expenses that were previously directly borne by the RLA Office will be financed though we are hopeful that the Housemasters will continue to bear these.

Considering this, the EHA board felt it unwise to draw concrete plans right now and would rather form them when there is a better idea of the amount of surplus. As mentioned before, the board does have several ideas and we will take inputs from residents to get new ones and involve them in the decision making process to prioritize amongst the suggestions, so that we can put the surplus money to the best use when we build it.

Also, in absence of new streams, the house will have a meager balance of $300-$500 by Sep ’07 end, which is quite unhealthy for the house government. One of the reasons behind having a surplus is to maintain a small reserve that can provide a cushion to cover for any unseen sudden expenses (such as a TV breakdown!) (The RLA money was made available to EHA as a one shot lump sum in September, the beginning of the year.)

Considering this and the fact that EHA board turns over in March, the benefits of the tax might in fact be reaped by the next government J

 8. What about the other dorms that have Housemasters. Do they also have a house tax?

A8. Ashdown and Sidney-Pacific both have house-tax of $5 per month. Green Hall has a house-tax of $2.5. Tang Hall does not have a house-tax currently.


9. Now that we are not organizing La-Fete, don't we save a ton of money?
A9
. Funds for La-Fete were secured through GSC and other sources. This year we are organizing Grad Gala Reception, an event of similar scale in lieu of La-Fete. So this doesn't change the funding situation.  Also, we expect to bring back La-Fete with a bang in 2008!