After a lengthy debate, the City Council rejected Mayor Fuller’s proposal to establish an Operations Booster Stabilization Fund — a fund designed to help pay for a portion of the annual general fund appropriations for the City’s pension system. As the Mayor explained in August, the fund would hold $20,500,000 of Overlay Surplus funds and $5,513,000 from the Appellate Tax Board Interest and Penalties Fund.
The Finance Committee previously denied this item on September 11, and the City Council recommitted the proposal back to Finance for further discussion on September 18. The Finance Committee held two meetings to discuss it and again voted 5-3 for denial at its meeting on October 10.
In reporting the committee’s decision (see Fig City News Meeting Report), Finance Chair Grossman said that a two-thirds vote of the Council would be required to create the fund and to appropriate from it. She explained that the main purpose of the fund would be to invest the funds and use the interest to mimic the effects that would occur if the yearly appropriation made toward funding the City’s pensions were reduced from 6.6% to 5% each year. The difference would be distributed 70% to fund Newton Public Schools (NPS) and 30% toward closing the growing forecasted budget gaps. The Mayor had earlier explained that the net result would allow an increase the allocation of the City budget for NPS from a 3.5% annual increase to about 3.7% for FY2025-32.
Opposition to the proposal was focused on the lack of flexibility it allowed for future Councils and administrations to use these funds for other purposes and in other ways. Councilor Gentile said, “Budgets are fluid, budgets evolve and change from year to year. To say now that a particular department should receive a specific allocation — four to eight years from now — never seen that in municipal finance and think it is a terrible idea. This is not a rejection of the schools or trying to give additional money to the schools. It is a desire to have flexibility to spend money on both operating and capital needs in the future as the City Council may see fit.” Councilor Laredo agreed, adding that this proposal does not necessarily give more money to the schools, explaining that the Mayor could easily lower the yearly allocation to the schools.
Other Councilors said that this proposal was a wise and creative way to bridge the City through the next eight years. Councilor Kalis, who made a motion to substitute approval for denial, said it is a good plan — “it converts one-time funds into operating funds, which are critical to running the City.” Councilor Lipof agreed, stating that he believes the proposal is a wise and creative way to bridge the City through a tough eight years. Councilor Norton also believes the plan is “reasonable” as a way to pay down pensions and also fund the schools.
Councilors Bowman and Humphrey spoke against the proposal. Bowman said she supports more funding being directed toward the schools but the needs are now, citing recent cuts. She said, “If we really care about the schools, we should care about funding more teachers now and keep those teachers going forward.” She added, “If we have declining school enrollment… [I’m] not sure how 40 more teachers eight years from now is going to do us a lot of good …[We] need teachers now. ” Councilor Humphrey referred to his memo outlining his concerns and offering possible compromises. He said this plan is not enough money and does not restore positions that have been eliminated, adding that the plan would make it harder to get an override passed in the future.
Finance Chair Grossman said that after the health and safety of the community, her top priority is the education of Newton’s children. She reminded the Council of the many hours and nights spent reviewing budgets seeking more funding for the schools. She said she believes this plan will help restore positions in a sustainable way and can be ultimately matched with financial flexibility when the pension obligations are paid off. She noted recent MCAS results showing problems in achievement and said, “That is not okay with me. We need to give more money to the kids. Do I have any reservations of tying our hands to fund education of our children? My answer is ‘No.’ Please tie my hands and fund the education of our children. Please continue to do it to give kids what they need to equip themselves for advancement and success.”
Councilors Danberg, Kelley, and Ryan agreed that funding is needed now to address immediate needs in the school.
Councilor Lenny Gentile shared a slide that had been prepared by the Administration for a past presentation regarding how much funding has gone to the schools. He cited decreases in school enrollment and projections that enrollment will continue to decline. He addressed comments made regarding use of the funds for capital improvements and infrastructure and said that the Council Order is specific that the establishment of this fund is for the purpose of relieving pressure and assisting with the City fully funding the pension system and support for NPS operations.
Regarding capital improvement and infrastructure, Councilor Kalis said that the Administration was allocating $3-$5 million upfront to fund capital projects. He said that no one is suggesting that this is the only plan and that while this does not do everything the City needs, the Mayor did propose to fund everything through the override, and it failed.
The Council voted against substituting the Committee’s recommendation of denial for approval (10-13, 1 absent) and then voted against postponement of the item (9 – 14, 1 absent). Finally, the Council voted to accept the recommendation of the Committee and denied the request (13-10, 1 absent).
Fig City News reached out to Councilor Kalis regarding the vote, and he said, “I was surprised. Everyone seems to think by saying the money could go here or there or by proposing their own idea of what the fund should look like, that it will happen. None of them are the Mayor. And, to say it’s not enough money, well, we all know that. But the override was voted down and the Mayor is trying to scrape and claw to find a way to responsibly add money to the schools over time. If we can’t get exactly what we want is it better to get nothing or something? I’d say [better to get] something.”
In response to the vote, Mayor Fuller issued a statement, which said in part:
I am disappointed that the City Council last night did not approve my proposal to transform one-time funding into additional revenue, primarily for the operating budget of the Newton Public Schools and also for City operations. The plan would have created predictable, dependable funding for NPS well into the future.
Ten City Councilors voted to provide the funding; thirteen voted no. The “no” votes were for very different reasons — wanting less funding for NPS, wanting more funding for NPS, wanting flexibility annually on decisions for any funding, wanting to decide how the Newton School Committee would use the funding, wanting the funding for capital investments, and more.
Based on the comments from City Councilors last night, I can see that there exists no consensus among them on whether/how/when to provide additional operating funds for NPS, which is concerning.
The checks and balances of the executive and legislative branches in Newton are an extremely important aspect of our local government. These checks and balances also mean that there is no way for me as Mayor to provide NPS with additional operating funds without support from the City Council. I will continue to work with them to try and find a way forward that is sustainable and that a majority can support….
