The proposals for an operating override and two debt exclusions, to be decided by voters in the March 14 special election, would each add to property-tax bills. The illustration in this article is based on the City’s example of the median home value in Newton, $1.2 million. The tax bill for any other property would be higher or lower, exactly in proportion to the difference in its assessed value from $1.2 million. (The City’s Override Calculator shows estimated taxes for any specific property for two representative years: 2024 and 2030.)
The above chart projects the total annual property tax for the median $1.2 million home over the next 10 years. According to the City’s example, the tax for that property is currently $12,624. The light blue columns show the expected 2.5% growth of that property tax under Proposition 2.5 without any override or debt exclusions.
- The operating override, shown in purple, would add $290 in the first year, according to the City’s example, and that amount would increase by 2.5% each year in the future, with its growth constrained by Proposition 2.5.
- This property’s share of the debt exclusion for renovating or replacing Countryside School (shown in orange) would be $9 in 2025, growing to $73 in 2028, after which it would remain constant at $73 per year for the 25 to 30 years of bond financing for the project.
- This property’s share of the debt exclusion for renovating or replacing Franklin School (shown in green) would start two years later, costing $9 in 2027 and growing to $110 in 2028, after which it would remain constant at $110 per year for 25 to 30 years. (The City forecasts a higher cost for financing Franklin than Countryside because state funding will cover about 30% of the cost of Countryside.)
In this illustration, this property’s share of the costs of each of the debt exclusions is estimated by scaling the City’s total of $183 for this example property (when both projects are fully financed) by the yearly debt payments for each project in the City’s Long-Range Financial Plan (page 55).
The City’s amounts for the two debt exclusions are approximate, based on the City’s projections of the costs of construction and borrowing. The tax increases due to the debt exclusions will be equal to the actual costs, which may vary. Mayor Ruthanne Fuller has emphasized that the City has planned this well and has completed previous school projects (Angier, Zervas, Cabot) within planned budgets.
The costs of the two debt exclusions would each remain constant over the 25-to-30-year life of the bonds that are used to finance the projects, and then they would stop. City spokesperson Ellen Ishkanian said, “Traditionally the City bonds for 30 years, but the decision will depend on what the lowest cost is when it comes time to bond for the Countryside and Franklin School projects. If it is more cost effective, we would opt for 25 years.”
The following chart shows the incremental annual tax on the median-valued home, as described above, over the entire life of the two school construction projects, assuming 30-year financing. It does not include any other overrides or debt exclusions that may be proposed and approved in the future.
Tax Relief
Newton currently offers several tax relief programs, which have various restrictions, and Mayor Fuller has proposed making each of these programs more generous. Most of the Mayor’s proposals require approval by the state legislature. The Mayor has proposed:
- Increasing the Clause 41C exemption for older citizens from $1,000 to $2,000
- Increasing the total gross income limit for Clause 41A deferral of taxes until a home is sold from $86,000 to $93,000
- Doubling the Clause 17D exemption for elderly surviving spouses from $219 to $438
- Doubling the Clause 22 exemption from $400 to $800 for partially disabled veterans, and from $1,000 to $2,000 for totally disabled veterans
- Doubling the Clause 37A exemption for blind persons from $500 to $1,000
- Doubling the maximum exemption from $1,500 to $3,000 and increasing the maximum number of hours worked from 125 hours to 200 hours, for the City’s Property Tax Work-off programs for both Seniors and Veterans
- Increasing the total gross income limit for the City’s Water and Sewer Discount program from $86,000 to $93,000 (This will occur automatically if/when the total gross income limit is increased for Clause 41A deferral of taxes.)
