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Money for schools – when and how much?

2012 May 29
by Jerry Reilly

There seems to be widespread agreement that the city has major and expensive work to do on a number of elementary schools in the coming years.

There seems to be widespread agreement that we won’t be able to finance the necessary work without an override or debt exclusion – I’m still not 100% clear of the difference.

There seems to be widespread agreement that an override or exclusion is going to be tough politically.

So now for a little pure speculation.  When will an override/exclusion be formally proposed?  For how much? What are the chances of passing?  Obviously without a detailed proposal on the table, that last question is unanswerable but that’s never stopped us before.





17 Responses Post a comment
  1. Tom Sheff permalink
    May 29, 2012 10:05 PM

    Jerry, there are two differnt overrides. A general override and a debt exclusion override. The difference between the two are that a general override the money gets put into the general budget and the tax increase is forever. A debt exclusion is for a specific purpose like an infrastructure item, it has to be spent on that specific item and the tax increase lasts 20 years. As most boded items last 20 years, so too does the debt exclusion override. A general override does not have to be specific in where the money goes to, it’s an increase in taxes that gets put into out general budget and gets spent however the city sees fit.
    As far as your question on the city’s infrastructure question you pose is that the city is not ready for an override,but what I think is being planned is a series of debt exclusion overrides. I believe they will package a couple of projects in one propsal. I believe that the city will package 3 or 4 schools in one request and will keep doing this at 5 year intervals. I dont believe the citizens are ready for it, but something needs to be done.

  2. Jerry Reilly permalink
    May 29, 2012 10:09 PM

    Tom – great clear explanation, thanks

  3. Gail Spector permalink
    May 30, 2012 12:24 AM

    Tom –
    I do not believe that duration of the tax increase for a debt exclusion is set at 20 years. The dollar amount and number of years to pay it off are determined by the community.

  4. Ted Hess-Mahan permalink
    May 30, 2012 06:59 AM

    Jerry, the Massachusetts Department of Revenue publishes a primer which describes overrides, debt exclusions and capital outlay expenditure exclusions.

    Briefly, each year, a community can increase the tax levy by 2.5% plus new growth (e.g., new contruction, renovations, additions, etc.) without voter approval.

    A community can permanently increase its levy limit by successfully voting an override. The amount of the override becomes a permanent part of the levy limit base.

    A community can assess taxes in excess of its levy limit or levy ceiling for the payment of certain capital projects and for the payment of specified debt service costs. An exclusion for the purpose of raising funds for debt service costs is referred to as a “debt exclusion,” and an exclusion for the purpose of raising funds for capital project costs is referred to as a “capital outlay expenditure exclusion.” Both exclusions require voter approval with very limited
    exceptions. The additional amount for the debt exclusion is added to the levy limit for the life of the loan only.

    Ballot questions presented for an override must present the amount and specify the purpose for the increase. Questions presented to exclude a debt obligation must state the purpose or purposes for which the monies from the debt issue will be used. Questions presented to exclude a capital outlay expenditure exclusion must state the amounts and purposes of the expenditures.

    There are a lot of nuances concerning how and when an override, debt exclusion or capital outlay expenditure exclusion must be presented as a ballot question. Because there is no dollar amount specified for a debt exclusion, only the purpose, before a question is placed on the ballot for the debt exclusion, the community must have a general idea of the cost of the project. If that cost dramatically increases after it is approved, it may be necessary to put the debt exclusion on the ballot again. So you are not going to see debt exclusions questions bundled together for future projects that are a number of years out.

    The Carr School, which will be used as a swing space for students during the renovation of other schools, has to be renovated before it can be occupied. I am not sure whether the city will need to pass a debt exclusion of capital outlay expenditure exclusion for Carr. I do expect that a debt exclusion for the Angier School will be announced in late 2012 or early 2013.

  5. May 30, 2012 08:23 AM

    Dear cyber space fellows! Again I am going to be naughty:

    In order the city to take money (mainly as the real estate tax) safely from their citizens, those should be willing to give it to the city. But said willingness is diminishing – please, compare:

    one (1) foreclose in 03/15/2011 – 05/29/ 2011 (start of the real estate season)


    six (6) foreclosures (mainly strategic ones) in 03/15/2012-05/29/2012.


    Real estate sentiment has worsened significantly, because of the previous indecent events in the city. As a result, the real estate prices are going down.

  6. Tom Sheff permalink
    May 30, 2012 08:44 AM

    Gail, thats news to me. Thanks. Regardless of the 20 years the debt exclusion has to be set at a specific time period, right?

  7. Steve Siegel permalink
    May 30, 2012 10:54 AM


    I can think of five factors in play around the timing of an override ballot question:

    1. The completion of the Angier feasibility study – This is not due until the summer of 2013. I believe that the “sell” for an override will be more challenging if it comes to a vote before we know the project nature (replace or renovate/expand Angier) and a detailed cost estimate.

    2. An override campaign that starts right after the summer of 2013 will overlap with the fall 2013 municipal elections. Who will this serve? Who will it hurt? Is there enough energy and human resources to mount an override campaign when volunteer’s focus will be on individual candidates?

    3. Funds to start the Angier construction are not needed until the fall of 2014. A passed override coming as late as the spring of 2014 will not impact the timeline of Angier completion, which at earliest will happen by the start of fall classes in 2016.

    4. What other projects might be included in a single debt exclusion vote, and when will feasibility work be completed on these other projects? Many believe that an override amount that covers at least two schools and one or two fire stations will have the best chance of winning.

    5. Will Setti Warren run again? How will his personal plans impact his effectiveness at lobbying for an override? How will his plans impact the timing of a ballot question?

    I’ll drop these into the conversation without speculating yet about when a ballot question might appear. Carry on!

    Regards, Steve

  8. Tom Sheff permalink
    May 30, 2012 12:01 PM

    Steve, I thought the fire stations already had a payment vehicle. I would amend #5 from setti’s plans to who the next mayor will be.

  9. Jerry Reilly permalink
    May 30, 2012 01:34 PM

    Steve – #4, including a fire station in the package is interesting. Can we put a senior center center in there too and cover a few more bases :-)

  10. Steve Siegel permalink
    May 30, 2012 02:39 PM

    @Tom: The fire station work is in the CIP and the financing source is listed as “bonding”. Angier School shows up in the CIP noted as same. If we bond without a tax increase, we pay debt service by cutting other operating expenses. If we pass a debt exclusion (or operating override) and designate these new revenues towards the debt service, then existing programs, services, and compensation can remain intact.

    @Jerry: Your question relates to both mission and politics. By all means if we need a senior center and we want it done sooner than later, we may want to create a debt exclusion package that will address both a school and a senior project. On the political side, can a debt exclusion that only covers schools win the votes of the 80% of Newton households without children in our schools?

  11. Steve Siegel permalink
    May 30, 2012 02:41 PM

    I would amend #5 from setti’s plans to who the next mayor will be.

    @Tom: Do you know something we don’t know?!

  12. Mike Striar permalink
    May 30, 2012 04:42 PM

    Our greatest failure as a community over the past 20 years or so, is that we talk the talk, but don’t walk the walk. We say that education is one of our top priorities, but we’ve been underfunding our education infrastructure for many years. There’s enough blame to go around, but when push comes to shove, the most blame falls on the last few mayors who have failed to find tangible, broad based solutions to what is clearly a funding problem.

    Keeping in mind that none of us knows how long Mayor Warren is sticking around Newton, so I would say this to anyone contemplating a run for Mayor… If you can’t FIX this problem, please don’t run.

    I’m sick of the commissions and committees. Sick of the studies and plans. Sick of the BS that has relegated our children to elementary and middle schools that are barely fit for human habitat.

    Mayor Warren has done a wonderful job on a lot of things, but he has done nothing to solve this funding problem with our schools. The case for an override is clear. The Mayor should be leading the charge. The only reason he’s not, is that it’s not in his political interest to do so. Meanwhile the beat goes on…

  13. Steve Siegel permalink
    May 30, 2012 06:48 PM

    Mike, just to let you know, until recently we never even thought of doing more than one project at a time. This mayor and his staff are actually talking about what staffing and funding issues are in the way of doubling up projects.

    But for the time being, Angier is the most advanced project in the pipeline, and the planning, approval, and MSBA funding process is long enough that the first dollar we will need from an override to pay for this construction will not be called for until the fall of 2014.

    What this means is that the Mayor (and us too) has time to build consensus around Newton for an override need. He’s been doing this, he is leading the charge, starting over these past 6 months with a series of town hall meetings during which he has made compelling presentations about the deteriorated state of our buildings, streets, pipes, and parks. I’ve seen him in conversations with countless citizens, finishing each exchange on our infrastructure needs with a smile, a handshake, and words like “I’m gonna come back to you because I need your help to fix this!” or something to that effect. The Mayor plans a major speech on finances in October.

    The case for an override may be more than clear to you and to me, but I’ve spoken to many, many folks who are not there right now. We need at least half of them if we are to fix our schools. From everything I’ve seen, Mayor Warren is certainly working hard to insure that we get plenty more than that.

  14. Tom Sheff permalink
    May 31, 2012 12:15 AM

    Steve, I don’t know what the mayor is going to do any more than anyone else (probably less). I only phrased it that way because as of right now I haven’t heard him say he’s running for re-election.
    Mike, I think it’s unfair of you to say the mayor has done nothing. As Steve points out, the first step in getting this passed is gaining the trust of the constituents, which the mayor has worked very hard to accomplishisagree, that’s fine. I, too, hope whoever is Mayor this next term knows what to do and had the chutzpah to do it. I am also sick of waiting.

  15. Ted Hess-Mahan permalink
    May 31, 2012 06:52 AM

    At the joint meeting of the School Committee and the Board of Aldermen at NNHS last night, Sandy Guryan gave a terrific presentation concerning all of the needs and the long range planning for school facilities. She estimated the city will need $245 million to address all of those needs over the next 20 years or so. This is consistent, I think, with previous estimates.

    We need to do this, but we need to do a lot of other things too, and keep running the city and the schools at the same time. It is a daunting task, but I am reminded of something Mark Twain once said: “Every time you stop a school, you will have to build a jail. What you gain at one end you lose at the other. It’s like feeding a dog on his own tail. It won’t fatten the dog.”

  16. Mike Striar permalink
    May 31, 2012 11:25 AM

    @Steve– I’m glad to hear the Mayor is raising awareness about the deteriorated condition of our educational infrastructure. Wake me when he actually does something about it…

    I think that Mayor Warren has done a great deal to restore confidence in Newton’s government. But when it comes to restoring our school buildings, he has yet to turn that confidence into action. Candidate Setti Warren supported the last override attempt, but after 29 months as Mayor Warren, he has yet to propose an override himself.

    When it comes to politics I am admittedly skeptical, but I’m not naive. We all know the Mayor has his sights on higher office. Is it too far fetched to suggest he did not seek an override earlier in his term, because it might reflect poorly on his candidacy for senate? If so, is it possible he’s contemplating a similar scenario now as we move toward President Obama’s reelection and the opportunities that might afford a rising political star?

  17. Terry Malloy permalink
    May 31, 2012 07:49 PM

    Ted H M:
    What a great quote!

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