Newton’s Comptroller, Stephen Curley, has reported that on September 25 the Massachusetts Department of Revenue certified the amount of the City of Newton’s Free Cash — the amount of unrestricted funds available from operations in the previous year – to be $27,912,423.
In late August, Mayor Ruthanne Fuller had announced that the City was expecting at that time to have additional one-time funds of about $48 million available, including an estimated $21-23 million of Free Cash. That was an early estimate of Free Cash, subject to final calculations of Free Cash by the Comptroller and its certification by the Department of Revenue.
In the last two weeks, the Comptroller’s Office has completed the closing of the City’s books for last year, and as a result the $21-23 million estimate of Free Cash increased to a firm $27,912,423. This was the amount certified by the Department of Revenue.
The other two components of the $48 million estimated to be available have not changed:
- $20.5 million from a surplus in the Assessor’s Overlay account and
- $5.5 million from a surplus in the Appellate Tax Board Interest & Penalties Account.
Combining Free Cash and these other two components, the total amount of additional one-time funds available this year is $53.9 million.
The Mayor has proposed dedicating two components — the $20.5 million and $5.5 million — to fund a new Operations Booster Stabilization Fund. As explained in this Fig City News article, the intended net result of using this fund, which has not yet been approved by the City Council, would increase funding for Newton Public Schools and City budgets during the next eight years while the City catches up in funding its unfunded liabilities for pensions and retiree health insurance.
This week, the No Override Newton campaign issued a statement that since the failure of the proposed property-tax override six months ago, the City has “found” free cash of approximately $80 million. This is at odds with numbers provided by the Comptroller and certified by the state. The “approximately $80 million” appears to be the result of double-counting of some of the numbers cited above. The No Override Newton campaign states that this $80 million is the sum of $27.9 million of Free Cash, plus $5 million “found” two weeks ago, plus “$44+ million” previously announced by the Mayor. There are two errors in that calculation:
- It double-counts the $5 million “found” two weeks ago, which is included in the $27.9 million of Free Cash certified by the state.
- It also double-counts the Free Cash, which is included in the “$44+ million” (actually $48 million) announced by the Mayor in August.
In summary, the $53.9 million in one-time funds available consists of:
- $26 million ( = $20.5 million + $5.5 million ) that the Mayor proposes to use for the Operations Booster Stabilization Fund and
- $27.9 million in certified Free Cash, which the Mayor plans to use in FY2024 primarily for immediate, one-time needs such as road paving, legal settlements, one-time infrastructure investments, and snow-and-ice expenses.