On Tuesday, the Charles River Regional Chamber hosted a one-hour online forum with Mayor Ruthanne Fuller and Interim Superintendent Kathleen Smith to discuss proposals for an operating override and two debt exclusions (see video). After a brief presentation by the Mayor and Interim Superintendent, Chamber president Greg Reibman moderated a Q&A session. Below is a paraphrased summary of the conversation with links to specific points in the video. Except as noted, questions were posed by Reibman from those submitted by attendees beforehand.
Mayor Fuller said she believes that NPS is the lifeblood of our City, that it’s why people move here, why they live here, and why they stay here even when their kids leave the public school system. She said that a healthy school system means a health community, which in turn means a healthy business and nonprofit environment.
Why now? Why not next year? Reibman pointed out that this has been a “brutal” three years as businesses have depleted their savings and we are seeing layoffs in the tech center, which may be impacting many Newton residents. The Mayor acknowledged that this is a really difficult time and said that there is never a good time for an override, but “This is the time.” She added that in the past, the funding pressure on the schools was largely due to enrollment but now it is about supporting all types of learners.
Why aren’t there ARPA dollars available? The Mayor noted that ARPA is a one-time source of funds, and most of that has been invested, and that a lot of ARPA funds went to businesses, village centers, and small businesses. She said that the City is facing the exact same pressures as businesses, and we must ween ourselves off these one-time funds and be careful to use one-time funds for one-time investments. She said that’s why we need an operating override on a permanent basis, for permanent needs.
What about using the cash settlement from Eversource? The Mayor noted that the Eversource settlement was about $14 million, of which $8 million is held in reserve because it is not yet completely settled. These funds have been incorporated in the City’s planning, and $7.5 million has been allocated to the Horace Mann project.
We’re hearing that even with the override, it’s not enough. The Mayor noted that the override money will make an enormous difference to preserve important services, that the schools are 65% of overall budget funds and are the core service the City provides. Proposition 2.5 limits growth in property taxes to 2.5% annually plus any new growth from redevelopment, and she said that pressure is good for us to keep us prudent. She added that when we need to accelerate the work we are doing or have spikes in cost, then we need to ask for an override, and the City of Newton will periodically be looking to do overrides. She said that Mayor Warren said after the last override that the City will be fine for the next five years but after that may need another override. This Mayor reiterated that forecast.
Some participants expressed concern about the tax split between the residential and business sectors. John Rufo, Chair of the Board of the Chamber, said that no one is arguing how important schools are for the business system, but there is concern about the timing of this request. The Mayor responded that about 84% of taxes come from residents and the rest from businesses, and that would be equally true about override funds, but the percentage of taxes paid by residents has grown slowly over the years. She said, “Overall, we have a half a billion dollar budget. The $15M in the three proposals are really important dollars but overall are a 3.5% increase in overall tax dollars.”
Kate Masterson, of Johnny’s, expressed frustration that restaurants are increasingly being asked to shoulder increased expenses via pressure from other businesses (e.g., rents, recycling costs, and third-party delivery costs). She said “businesses have no override, no pot of money we can go to” and “at some point, we make Newton an unfriendly place to do business” — except for banks, real estate, and national chains. She said businesses need concrete support. The Mayor responded that the City gave $610,000 in grants to small businesses and literally delivered concrete barriers to create outdoor dining and will continue to look for other ways to help.
While there are tax breaks for some residents to make it less painful, what is there for businesses? The Mayor said she tried to get the City Council to lower the difference between commercial and residential tax rates, but the City Council did not support that. Reibman noted that there were no tax breaks for businesses.
Business owner and resident Dante Capasso noted that the commercial tax rate is 175% of the residential rate and asked what can be done to help businesses. He noted that the focus of the override campaign has been on the impact on homeowners (in the range of a few hundred dollars), but there has been no discussion about the thousands of dollars by which the override will increase taxes for businesses. The Mayor said the strength of the school system will keep apartments full (Dante’s family owns several apartment complexes in Newton). She acknowledged that this tax increase comes at a “lousy point in the economic cycle,” but pointed out that a silver lining of the pandemic is that more remote work has meant that local restaurants have more lunch business. Reibman responded that lunch business may be up but only if restaurants can find help.
Jeffrey Lemberg, a Newton resident and a director of the nonprofit One Love, asked about Payments In Lieu Of Taxes (PILOTs) that Boston has received from higher education and hospitals. The Mayor said she will keep “leaning in on it,” using data that the City collects about its services that these nonprofits consume, but that her power to win donations from nonprofits is limited to moral suasion.
Enrollment is dropping, so why do we need to raise more funds? Should we consolidate schools? Is this funding needed because we signed a contract with the teachers union that is not sustainable? Interim Superintendent Kathy Smith responded, saying that the City is currently in negotiations with the Newton Teachers Association, we offer competitive wages, and we have a 90% retention rate. She said that when schools re-opened in the fall, NPS had no problem with staffing. She acknowledged that enrollment is dropping (except in the high schools) and described an upcoming $100K study of neighborhood patterns that by next December may possibly suggest closing a school, but that decision is a year away. She said that NPS is looking for every efficiency, and if the override does not pass, there will be a $6-8 million deficit, and since 80% of the budget is personnel, even though she would like to protect classrooms as much as possible, support staff in classrooms would likely be affected.
Won’t an approved override give unions a leg up in upcoming negotiations? The Mayor said, “School buildings matter, but teachers matter more.” She repeated that the administration makes sure that the City is financially sustainable and pays fair and competitive wages.
Help us understand declining enrollment. The Mayor said enrollment is going down across many cities in Massachusetts, but just as enrollment is going down, needs are going up. She explained that the support we are giving all of the students is a necessary and permanent good and needs to be funded.
Will there be no new funds for streets and sidewalks? The Mayor noted that Mayor Warren dramatically increased work on streets and sidewalks and put in place an ambitious plan, and since then streets and sidewalks have been funded in various ways, without long-term dedicated funding. She said that if this override passes, there will be more dedicated funds for streets and sidewalks. She also corrected an earlier misunderstanding, saying that if the override passes, staffing will indeed be in place for the NewCAL Senior Center.
We’re asking businesses and residents to make sacrifices. What concessions are the unions making? The Mayor said that unions, as part of the overall community, have to live within our means also.
In answering closing questions, the Mayor said that the City’s online override calculator includes both the override and debt exclusions. She said that while the amounts of the two debt exclusions are estimated, she believes that the City has built in sufficient funding and inflated costs correctly.
