Jake Auchincloss’ newsletters remain one of the best ways to learn about the major issues facing the city, particularly when it comes to budgetary matters, and his latest is no exception. In today’s email, he raises a concern that has been invisible in the media and in communications from other public officials but will become quite important over the coming years. Here is his summary (with an embedded link removed, as it seems to be in error.)
Budget and financial forecast after the teachers contract
The mayor and city council will agree a new annual budget by early summer. In the fall, the administration will present its five-year financial forecast and capital improvement plan. I will be watching for how the new teachers contract affects the budget.After two negotiating cycles in the past decade where they made concessions, the Newton Teachers Association secured a top deal this time. That contract, more than any other line item, drives the school budget, which in turn drives the city-wide budget.
The schools are the beating heart of Newton, and the teachers the beating heart of the schools. This contract attracts and retains the best teachers, so I am in support. City Hall must be transparent about the tradeoffs, too. When the budget is debated this spring, I’ll report on where the money is coming from.
In simple terms, the teachers contract would cause the school budget to exceed the Mayor’s proposed allocation to the school system by quite a lot. There are four ways to deal with this:
1) Live within the allocation by reducing other school system expenditures. Unlikely, in that compensation (salaries and associated benefits) accounts for about 85% of the school department’s budget, and making up the difference from other important programs and services is quite hard. Even if enrollment were to drop per
recent projections, the decrease in school age population is not enough to reduce the number of classrooms or classroom teachers, and it would be very troubling if larger class sizes were to result.
2) Hope that the Commonwealth’s new education bill will provide extra resources to Newton. Unlikely, in two respects. First, increased funding under the bill is not guaranteed, but is subject to future state finances. Second, as noted
here: “The biggest funding boosts would go to districts with large numbers of poor students and English language learners.” That’s not Newton.
3) Take the funds out of other city departments.
4) Seek an override to expand city tax revenues.
I’m guessing there are one-time savings or revenues in the city budget that will postpone this issue for a year or so, but not for long. Jake is wise to keep an eye on it and to let us know his perspectives over the coming months–especially since options 3 and 4 are the most likely.
Jake is being too gentle with the body politic.
A 1-time tax override will not suffice, in no small part because the unfunded obligations and promises made by prior generations are coming coming due.
In 10 years, the City’s expenses will increase $45 Million per year, roughly a 25% increase ($2,150) in annual property taxes. That is in addition to the (yet to be forecasted) operating costs that go hand-in-hand with committing capital for “NewCAL”.
Some are hoping it possible to grow out of the financial problem. But there is no chance of that without increasing the size of the taxable base, and that means getting Northland’s Needham Street project and Korff’s Riverside off paper and out of the ground much more quickly than outraged opponents can stomach.
Anyone with an idea of how to foot the equation without 800+ additional dwelling units and 20 story buildings immediately next to major transportation center really ought to speak up and open their wallet.
Preferences whither in the face of obligations, I think … But maybe someone else knows better than do I. At current course and speed, we are screwing the pooch and haven’t acknowledged the role irrational exuberance may be playing in a post QE/Bernanke-Yellin world that finally unwound over-looking in Frank-Dodd financial oversight. We need to pick up the pace of our own progress (anyone’s definition will suffice).
The generational politics are and will be very tough on everyone.
Mary P., adding the Northland 800 rental units and Korff’s rental units will only COST the city more money. It’s a simple fact: adding residential units COSTS more in social services than it generates in real estate tax income.
Don’t believe the myth that these corporations are our saviour and will bless the City with free money.
Again… had Mark Development been able to move forward with the original plan they were showing, which had an additional 300,000 sq. ft. commercial property, it would have been cash flow positive and created a much more interesting place with a good balance for the city.
Instead, they traded that away to gain the backing of the local neighborhood thereby eliminating controversy. The result, while positive for moving the project forward faster, is worse for the city as a whole.
Will the Right Size folks be wearing their t-shirt while supporting the override?
Chuck, it is unfortunate the developer choose to retaliate and remove the one aspect of the project that would have actually benefited the City just because the City didn’t cave into ALL their demands. I hope the Council remembers this the next time this developer comes asking for a corporate subsidy in the form of rezoning and waiving code for their projects.
It’s interesting though they didn’t choose to build residential under 40B like everyone always claims will happen. I guess we can call that myth busted!
“The teachers’ contract will cost a lot of money, which is gonna be tough to find. I’m gonna keep an eye on it for as long as I’m here,” says future congressman in his incredibly insightful newsletter – a must-read for anyone seeking to learn about the major issues facing the city.
To paraphrase Ed McCormack, If his name were Jacob Moore, his candidacy would be a joke. But it’s not Jacob Moore, so for the foreseeable future we’ll continue to be subjected to these political advertisements masquerading as news/policy discussions. Swell.
@David the developer created the 50:50 balance the neighbors preferred. They also met other demands that resulted in the loss of the commercial property.
Mark did go with 40b in West a Newton.
Your and Jake’s phrasing makes it sound like the City had absolutely no funds budgeted for a cost of living adjustment (COLA) for the Newton Schools employees, which I doubt. I do know the city and school budget were created and passed without a renewed contract which is where your conundrum starts — how do we now pay for it (how about downsize NewCal for starters from $20M). In the future, I would hope our elected officials will 1) reject a City budget that does not include an adequate allocation for the schools (as decided by the School Committee) and 2) the School Committee pass or create a budget wihtout a contract in place (which can be done by not allowing contract negotiations to drag on for 15 months. )
Removing parks from the NewCal possible siting is removing the cheapest alternative. There will also be trade-offs there. Sometimes making the right, ethical and best LONG-TERM choice requires trade-offs and many voter/taxpayers support and are grateful our elected officials did the right thing.
Paul-The teacher’s contract didn’t “cause” anything. The lack of a sufficient tax base is and always has been the cause of the city’s financial problems.
But you’re right on target when it comes to the effect of a drop in enrollment. The report you link to contains some illuminating information that’s well known to any teacher who lived through the late 80’s-2000’s. The city had closed eight schools and then, too soon after that, the enrollment began to increase in the early 90’s. By 2004/5, the elementary schools were essentially at capacity. From a point of full capacity, enrollment then increased by 1400 students over the next 10 years. This is important information to consider when discussing a drop in enrollment.
To complicate matters, appropriate space (or lack thereof) is a huge factor causing overcrowding. The Mass. State Building Authority (MSBA) has established space guidelines for new schools that the city must comply with in order to receive state reimbursement for a new facility. So we now have 3 schools in compliance with the guidelines and 12 elementary schools that aren’t close to compliance.
The space situation is more complicated than a spreadsheet can convey: 23 students in a 900 sf classroom is a comfortable setting, 23 students in a 750-775 sf classroom is overcrowded. In addition, curriculum and instruction that provide a 21st century education requires a different configuration of space than is found in our current schools. The MSBA guidelines do a great job of outlining the space needs of a 21st-century school facility. As we move forward with the rebuilding of schools that comply with the state guidelines, the current overcrowding problem should subside.
Regarding enrollment, the drop you mention was 79 students or .5% — a negligible. On the contrary, enrollment HAS been increasing every year at both HS since 2012, except one year and is projected to keep going — and the very troubling class sizes are happening NOW at both HS. I’ve seen it change from the time my oldest graduated to now that I have a freshman and a senior there. One teacher has close to 100 kids in her workload. We must indeed pay close attention to properly funding our schools and contracts before we make budgets, not after.
(Although this is how it has always been in Newton, the contracts expire, they are negotiated and the funds are found).
Maybe the referendum coudl position us to ask Northland back for that 300K commercial space we lost?
@Kim – Northland got rid of that commercial space to please the neighbors. They would have been happy to keep that space if it had been left up to them.
Public school funding is becoming a greater and greater problem every year, and the growing financial burden and shortfall is felt well beyond Newton, nationwide.
It is has become really a structural problem, with public schools in many ways adhering to antiquated modes not availing themselves of or accommodating to modern technologies and efficiencies, as have practically every other facet of our economy and society.
The future sustainability of K-12 education, in the longer term, will entail much greater use of online technology, towards expanded use and support of virtual schools. Currently the political power of the teachers unions is blocking that path, but eventually innovation and sheer necessity will overtake that impediment.
Jim – You have no idea how much technology of all kinds are used in the Newton Public Schools. Where on earth did you get the idea that tech isn’t incorporated into all areas of the curriculum and is a major driver of instruction?
Teachers unions have very little to say curriculum and instruction issues in 2020. The Massachusetts State Frameworks set out the curriculum and instruction that every public school in the state must adhere to. If you have a complaint, please call DESE or the BESE and express your opinion.
Yes Jim, you agree with my favorite candidate. We do need major structural change.
Lisa-
Contact information for DESE: (781) 338-3000
Contact information for BESE: 781-338-3102
Good luck. They certainly don’t listen to teachers.
Jane,
When I say “accommodating to modern technologies and efficiencies” and “much greater use of online technology, towards expanded use and support of virtual schools,” that’s certainly well beyond technology now used in Newton Schools (on which I do have awareness), which is more than evidenced by your reference to what teachers unions can or cannot say on curriculum and instruction.
I’m talking about such technologies actually supplanting (thereby reducing) the number of teachers needed, as well as the vast physical real estate/building infrastructure, the cost for both of which are becoming more and more unsustainable under existing and projected fiscal restraints.
And that is why I say “the political power of the teachers unions is blocking that path, but eventually innovation and sheer necessity will overtake that impediment.”
Jim – Please see the contact information for DESE and BESE listed above and make the calls. Please.
Teachers’ unions have no say in the issues you’re talking about. In 2020, public education is run by big business. The deciders have no interest in listening to input from educators, unionized or independent. You should attend a hearing sometime. The level of open disrespect exhibited toward educators is appalling. My personal favorite was the one where the Board members ate dinner in front of the people who came to testify. They did put out box cookies for us. It was a nice touch.
The Board of Elementary and Secondary Education doesn’t have one educator on it, though it does have a parent and student representative. Several years ago, MTA introduced a bill to the legislature that would have reserved one spot on the Board for an educator. It went nowhere.
@Jane, re “The teacher’s contract didn’t “cause” anything,” perhaps I should have said that the School Committee agreed to a contract that would exceed the Mayor’s planned allocations to the school department. They did so knowingly. I suppose they made the judgment that the contract was appropriate for other reasons, notwithstanding the budget impact.
I agree.
Can we all take note of this moment, please!
Noted.
But Paul, you oversimplfied the equation a bit.
To summarize, what actually happened, is that the City Council and the Mayor passed an inadequate allocation along to the School Committee to meet our current needs such as behavioral therapists — kids behavioral needs are growing and complex– and future needs (e.g. there was/is no money for the change in school hours, tape, soap at NSHS etc.
Then the School Committee, which included the Mayor achieved the only ethical and smart solution — which was not to damage our school system, and address the behavioral and educational needs of OUR children. Our school system’s excellence is tied to real estate and everyone should be happy.
There is a 2.6 million plus “wage reserve” in the 2020 budget. It is an unallocated reserve put into the budget to fund all the expired union contract wage increases
The Mayor’s aptitude for finance is well documented. Let’s stop these baseless, non-factual suggestions that we have dug ourself into a hole we will all suffer from. The opposite is true. The Mayor and the School Commitee preserved the excellence of our schools, our source of real estate value and the #1 reason families move to Newton.
Yes, this means other things will need to be de-prioritized or funded via an override, like NewCal maybe?
“Yes, this means other things will need to be de-prioritized or funded via an override.”
Didn’t we just say the same thing? See #3 and #4 in my posting.
(BTW, the wage reserve is the kind of one-time device I mentioned.)
“Everyone should be happy.” That would be a first!
BTW, it’s totally appropriate to fund the Senior Center with a debt exclusion override. While we’re at it, let’s add in items like Gath Pool, which is currently way down on the priority list.
As for changes in school hours, you can forget about that. There’s no way to pay for it now, if there ever was.
What about OPEB? How are we going to pay for those expenses, once they start to hit?
(No, I am not going to stop raising the subject.)
@ANP, The Mayor and Council have included yearly amounts in the budget as part of a plan to bulid up funds to cover OPEB liabilities, with the plan to be fully funded by 2031. It is a fair question to ask whether that date is the right one for the city. Should it be sooner, requiring a bigger proportion of current budgets, or should it be later, requiring less use of current funds? I’m guessing that the current plan will face stresses over the next few years as structural deficits emerge.
Okay – we are all officially on the same page and happy. .. as long as we agree the teachers’ contract hasn’t caused anything foul. It’s a win-win and there are funds available for it.
Would he grea to add in the Gath Pool and pushing back the date for the full funding of the OPEB.
We could then have a party!
Agree with Kim, the Mayor’s school allocation was inadequate to begin with – which is why we had to go through this nightmare with the teachers’ contract – there was no way to agree on a reasonable contract given that allocation. I hope the Mayor learned a valuable lesson and is now committed to funding our schools appropriately – the reason so many of us live in Newton in the first place!