At a May 18 City Council meeting on the Mayor’s proposed 2020-21 budget, Emily Norton described the administration’s expectations with regard to state aid for the schools as delusional (4:19:17 and following on the video). In response and elsewhere during the meeting, the Mayor and her budget director described their assumptions as prudent and conservative. (The budget includes an increase in combined $30 million Chapter 70 and Circuit Breaker funds–the two main school support funds–and a decrease of a few hundred thousand in the $6 million Unrestricted Government Aid funds.)
Watching this meeting, I was left with the feeling that the budget before the Council mainly kicks the can down the road, failing to make clear what choices would have to be made in the schools and to other city services in the event that revenues from the state are substantially below the expectations contained in the budget. The Mayor said that she doesn’t want to use the “rainy day fund,” as it will be needed more in 2021-22 (4:24 on the video). That realization means that her options during the coming year will be rather severely limited, especially because the decisions would likely kick in half way through the fiscal year, once the state’s finances are more clear.
The Council votes this week. One option is for them to vote down the budget unless the Mayor gives a clearer sense of how she will deal with probable contingencies. Not likely, I’d guess. But absent some response along those lines, they are buying a pig in a poke.
In parallel, I’d suggest that the School Committee and the teachers union have quiet conversations about how to create some circuit-breaker contract contingencies to avoid layoffs in the event the worst happens with regard to state aid. I believe the union and the committee could find agreement on the point that the last thing the city needs is to put our teachers’ jobs at risk if the money dries up.
@Paul: Thanks for bringing this to our attention. I attended the virtual meeting and heard both Emily’s description of the proposed budget and the response from the Administration. It will be interesting to see if the Councilors discuss how the city should respond on the deficits that the City’s 5 year financial forecast is predicting in the coming years – pre-COVID-19.
This is exactly the untenable situation that demands federal aid (putting aside the question of whether or not such aid is likely to flow).
We know that the cost of education per child will rise, not fall, in the next year. Smaller class sizes, extra expenditures on remote learning, health-related supplies, extra cleaning, transportation, and most importantly the things we don’t know. That will be true in Newton. That will be true in Lexington. In Cambridge. In Boston. In Chelsea, which will be hurt a heck of a lot more than we will be. In New York. In Fairfax. Everywhere.
Rational federal action would say that rather than forcing immediate austerity through layoffs and project delays, both of which in themselves cost time and money when we have neither, the US would inject a huge amount of money into education at the state level to keep the wheels on. Looks like the US House passed such legislation, the Senate “reacted coolly” to it:
https://www.future-ed.org/what-congressional-covid-funding-means-for-k-12-schools/
A proven way to get through unexpected and relatively short term but steep downturns in the economy is for the government, which does not shut down, to keep spending. With its ability to run a deficit, the federal government is the entity that enables such spending. Money to the states worked in 2008, see this Politico article:
https://www.politico.com/news/magazine/2020/06/01/coronavirus-state-bailout-budget-jobs-economy-impact-287704
.. asking the federal government to “bailout” an affluent suburb…
The optics alone is terrible. Since money is not unlimited, any possible bailout would probably only go to the inner cities
The only solutions are to
Increase revenue (seems like adding high density housing is the citys’ preferred method)
Defund the police department (far left wish list)
Cut school budget (teacher union too powerful)
Increase business tax(retail too fragile even before covid)
Cut vital services (in a such a liberal city this is going to be fought tooth and nail)
… so why not be honest and just tell everyone an override is coming.
Thanks, Amy.
Excellent point. There was a predicted–and unresolved–multi-year structural imbalance even before the Covid epidemic. Things were getting stressed before. How much more now.
Thanks, Mike,
My comments did not even take into account the things you correctly mention: “We know that the cost of education per child will rise, not fall, in the next year. Smaller class sizes, extra expenditures on remote learning, health-related supplies, extra cleaning, transportation, and most importantly the things we don’t know.” I was just talking about the revenue side of the income statement, but you are wise to remind us of those other items. I haven’t seen anyone propose a way to think about reopening the schools in a manner that does not increase costs.
Thanks, Buget,
Back in October, (https://village14.com/2019/10/29/auchincloss-mayor-fuller-is-going-to-ask-the-voters-to-raise-taxes/#axzz6Oj8Plov0), Jake Auchincloss predicted that there would be an requested override to rebuild several schools. You are suggesting that there will be one requested for general purposes. If the Mayor and Council cannot demonstrate that they have been thoughtful in their approach to budgeting, and if the economy is still in recovery mode, there is no assurance that the public would be up for that. In the meantime, there’s this year’s budget to reconcile.
There are two ways to balance a budget. You can cut services, which seems to be the only thing anyone is talking about. Or you can raise revenues.
Thanks, Bryan. Very true. How for this year?
You couldn’t ask for a worse time for a tax increase when a substantial fraction of the populace is already reeling from the financial fallout of the last few months.
True, Jerry. Override votes tend to be close, even in good times. And I think debt exclusion overrides, where specific projects are promised, tend to be more popular than general revenue overrides. I forget the specific numbers, but I think the margin of victory for these votes has been diminishing in recent years. I’ll try to check on that, or others can look up the numbers. In any event, I don’t see how that approach would solve this year’s problems.
In 2013, the vote (with a 32% turnout) was 9649-8199 for a $8.4 million operating override to cover additional teacher salaries to handle increased student enrollment, expansion at Zervas Elementary School, four new police officers, street/sidewalk repairs, relocation of the Newton Fire Department Wires Division and the rebuilding of Fire Headquarters and Fire Station 3 in Newton Centre. It was 9984-7893 for a debt exclusion override for rebuilding Angier Elementary School; and 9879-7919 for Cabot Elementary School.Source: https://patch.com/massachusetts/newton/newton-override-results-voters-say
A previous attempt in 2008, which brought out 47 percent of Newton’s registered voters, was voted down 13,441-11,118. Source: http://www.newtonma.gov/civicax/filebank/documents/27597
And in 2002, an override passed 14,232-13,521. Source: http://www.newtonma.gov/civicax/filebank/documents/54150
Bugek, there’s no reason to view this as a bailout in any negative derogatory sense. If this had been a hurricane or tornado ripping through Newton Centre, no one would blink an eye at getting federal disaster relief for Newton itself. If a mayor would say, “We are a wealthy community, we won’t take the aid”, they’d rightly be drummed out of office.
This is no different. This was a natural disaster that hit basically everywhere on earth at the same time. In fact, it is even more appropriate for aid than some other FEMA-orchestrated rescue efforts. We bail out ocean-side communities in flood zones every year even though local policies contribute at least indirectly to the damage. If there was a lack of preparedness for COVID-19, the blame was at the federal level.
The question is what to do about it. As Paul suggests, at the local level, we can’t magically raise revenue to pay for this coming fall.
Only the federal government has the ability to run a deficit. Only the federal government can inject the amount of money that’s needed by *every* school district in the time that’s required. At the local level, we and every other community in the US simply don’t have the economic tools to deal with this kind of pit we’re all in.
This isn’t about controlling spending or mismanaging money that we typically associate with the term “bailout”. This is about maintaining the status quo in our schools as much as we safely can. That’s critical for the national workforce and critical for our economic competitiveness.
If you then say, “well, it has to be paid for”, there are two options. Since this is a broad-based cost, the argument can be made that it should be a broad-based tax, which points federal. Income taxes at the federal level are progressive, which means that wealthier people who suffered less from the pandemic (their losses tend not to be existential or catastrophic) will pay proportionally more.
The alternative, if you want to keep payments at the state level, is for the federal governments to provide loans to the states, getting them over the costs of September and allowing them to raise revenues slightly more gradually. In Massachusetts, this means a flat tax, which means lower income people will be hit doubly hard by the pandemic. Same is true at the local level with property taxes because we don’t have a residential exemption in Newton.
Finally, you can make the economic argument that stimulus at the governmental level and education spending that allows parents to return to employment faster pays for itself in increased productivity. Given the economic wreck on main street, I don’t see why the relatively strong gains on Wall Street can’t be used to justify targeted federal spending for education.
If we can pass multi-trillion dollar tax cuts, disproportionally favoring corporations and the wealthy, on the theory that “they pay for themselves” in economic growth, why can’t we spend billions on education relief using even sounder logic?
@Paul – I’m not saying a tax increase is politically popular. And @Jerry, I recognize you would be asking a lot of people who are already struggling.
But at the same time, I don’t think we can afford to dismantle the budget for social services, or libraries, or schools at a time when we need them the most.
Maybe the answer is that we put ourselves in a more precarious position in terms of continuing to fund our pension liabilities.
Kicking the can down the road is never preferable, but something is going to have to give, and our educational and social safety net should not be the first place we look.
A really good point, Bryan. The decision of how much to fund pension liabilities has a direct impact on the amount of funds available for current obligations and priorities. Balancing current needs against potential future obligations is a key strategic decision to be made by the Mayor and Council. But in any given year, while you might still aim for an overall long-run target, you need to be careful not to shortchange current constituents when other priorities or exigencies emerge.
A Unit C employee from Cabot just wrote on Facebook that 40 NPS educators have been laid off. It’s not clear if the 40 are all from Unit C (paraprofessionals, classroom aides, special education support staff, behavior therapists and in school substitutes.)
Does anybody have information on this?
@Paul: At what point should there be accountability regarding the knowledge of what is coming. Again – I point to the fact that pre-COVID-19 – we have been anticipating deficits this year (though small) and in the next few years. Were we planning for it? If so, can someone share that plan?
Gail,
If there are layoffs, some people might actually be better off financially, at least until the end of July. The federal government is supplementing the state’s unemployment benefit by $600 per week until then. Indeed, starting several weeks ago, the city could have furloughed every one in the system for a day a week and they would have been eligible for this payment: You didn’t have to be totally laid off. In other words, an individual is eligible for the full $600 weekly payment if they receive one dollar ($1) or more in regular unemployment compensation for the week from an individual’s home state.
Many companies and nonprofits took advantage of this program design, saving themselves money and providing temporarily increased salaries to their staff. Unless municipalities are not permitted to do this, I’m surprised that Newton didn’t take advantage of this provision.
Amy,
You ask a key question. I always thought that part of the Council’s job is to conduct an independent assessment of the reasonableness of the assumptions in the Mayor’s budget, looking not only at the current year but at the next several to follow. As I listen to the budget meetings, I hear lots of questions about particular line items but very few about the degree to which the budget is part of a logical sequence of what is likely to be required over several years.
On the schools’ budget, it typically is in the interest of the Superintendent and School Committee to agree to live within the Mayor’s allocation. If that amount proves to be inadequate later in the year, the pressure is on the Mayor to add more funds rather than risk the ire of the parents and teachers by squeezing on the schools. Those funds, obviously, have to come from other city services.
But this year there is a confluence of difficult financial indicators. Every informed person knew that the original school budget was going to be tight, given the Mayor’s allotment increase compared to the wage and salary requirements of the new teachers’ contract. As we learn about the requirements for reopening the schools in the fall, it’s unrealistic to think that costs won’t go up further. Meanwhile, city revenues have gotten clobbered already, and believing that state aid will be at previously expected levels seems to be a leap of faith. With all these changes, it’s hard to understand why the Council does not insist on a rigorous contingency analysis as a condition of approving the Mayor’s budget, rather than an ostrich-like approach that will lead to even more difficult times later this year and into the next.
Paul
The answer to your question below is simple.
Virtue signaling is easier than critical thinking.
“…it’s hard to understand why the Council does not insist on a rigorous contingency analysis as a condition of approving the Mayor’s budget”
@Paul: Hopefully, the Council will use this time to really delve into the budget and the 5=year forecast – pre-COVID-19 as well as deal with the implications of how COVID-19 has impacted our finances as a whole and really plan for the future of Newton. It’s easy to move money into the library and Parks and Rec now – but let’s do it with transparency and show folks that even if we were to do that this year – there will be really hard choices in the years to come. Again, pre-COVID-19 – we were headed for tough financial times.
If anyone doubts that there will be a huge financial impact on the school budget, take a look at Commissioner Riley’s memorandum to school superintendents: https://sunbeamwhdh.files.wordpress.com/2020/06/guidance-on-required-safety-supplies-for-re-opening-schools.pdf
Just one example:
“Successfully implementing 6 feet of social distancing will require significantly smaller class sizes and reduced staff-to-student ratios. Furthermore, where feasible, programs should isolate individual groups of students with one consistently assigned teacher, and groups should not mix with other students or staff. At this time, group sizes are restricted to a maximum of 10 students, with a maximum of 12 individuals, including students and staff, in each room.”
@Paul: And, “if anyone doubts that there will be a huge financial impact on the school budget, take a look at” the conservative forecast of OPEB funding that is needed to satisfy Newton’s spending, in excess of budget, accumulated from the ruling generation’s salad days. OPEB liability is summarized fairly on the City of Newton web site, where more detail documents are also available.
The year 2029 is much closer in government time, even than it is in preventative healthcare or secondary educational time.
And in case someone surmises otherwise, Mayor Fuller and at least Councilors with some seniority know that fact base well.
Net net, the scope and totality of the fiscal problem is somewhat larger than worrying whether NNHS/NSHS will have an organized football or baseball program next year. Circumstance appears to call for deep body invasive surgery, not a nip-and-tuck. Balancing, which desires (N.B. not “needs”) each generation of Newton constituents has and which government will not fulfill due to its inability to afford, is the challenge of these times.
Of course, that all assumes that Sean Roche’s rezoning proposals don’t save us all by increasing the total built-world values to such a degree that property tax receipts will rise enormously before 2029 … Maybe he could financially model and show everyone the beneficial implications of an aggressive re-building of Newton as a more urban-ized setting?
Ideas, @MP, about what “deep body invasive surgery” might comprise?
@Paul: As one of a genre, and going straight at one of the most contentious, financially unaccountable, and largest of any modern Newton mayor’s budgets (namely Newton Public Schools), let me put an idea in business terms –> “change Newton Public Schools from a cost center to a business unit”.
Doing that would include taking-in lessons learned from higher education:
* allowing NPS to earn revenues for certain of its academic offerings — these are not the “fees” (as normally understood by educational budgeters) for meals, sports, transportation
* defining the Core Curriculum that local government is willing to fund competency in and fully funding and resourcing that so to continue compliance with Commonwealth law and regulation
* defining A La Carte Curricula that parents and student might choose to buy in lieu of or in addition to the Core Curriculum — for example Advanced Placement Physics, Year 4 Hebrew Language Instruction
* publish a catalog of all core and a la carte courses available by March 31st in the semester prior to offering
* build an enrollment and resource scheduling system that can quickly respond (read “in less than 1 month”) to rising demand for certain class titles and can cancel titles for which insufficient demand arises
* hold the superintendent of schools and the School Committee responsible for paying rent to the City of Newton for use of its facilities even if only as if a triple-net lease — this would likely encourage two-shift operation of the facilities, night classes both in physical and virtual classrooms, and additional uses of the shop (auto, wood) resources.
Some measures of whether such an approach would be succeeding would be the percent of household spend currently going to private teaching extra-curricular schools and businesses. It is well-documented that Newton residents participate less in NPS than do other inside Route 128 suburbs … inferring that is driven by residents’ wealth and ability to pay is a hubris that misses the point that NPS is not serving parts of the target market well; and that by addressing that mismatch many goods can result.
[N.B.: please consider that a notional sketch, rather than a MECE response to your prompt]