City Council president Susan Albright sent this letter to her fellow councilors. The letter is a clear summary of the funding crisis that the School Dept is facing, how we got here, and questions that need to be answered to move forward.
To: Newton City Council
From: Susan Albright, President
Date: April 8,2022
Re: Newton Public School Budget
Introduction
The Newton Public Schools recently released its proposed FY 2023 budget for the School Committee’s review, and a series of painful reductions were included. I have been contacted by many Newton residents about the proposed budget, and I’m sure you have also heard from our constituents. The School Committee has scheduled its budget vote for next week, and at its meeting on Thursday March 31 a resolution was passed (8-0-1) that in essence said that the then current budget allocation will lead to immediate serious negative impacts on our students and is not acceptable. Over the last several weeks I worked with the Mayor along with Councilor Lipof, Councilors Laredo, Gentile (I, Laredo and Gentile as former SC Chairs) and Grossman along with the School Committee leadership to try to quickly impact the Mayor’s decision regarding the funding gap. I am pleased with her announcement to provide more funds for the most critical parts of the gap.
I had never seen a situation like this in more than 26 years as a Newton elected official. There have been times in past years when the School Committee believed that the funding allocation was insufficient, but I have never seen a situation where the funding gap was so large that the School Committee might refuse to accept the proposed allocation. This was particularly painful at the current time, when we are coming off of more than two years of severe pandemic-related disruptions in our schools. We were facing the prospect of significant reductions at the very moment when students’ growing academic and social-emotional needs especially need our attention.
The NPS budget will come before the City Council, and we may have a key role in addressing not only the remaining gap but initiating discussion on painful future of funding gaps. Our process begins with our April 13 meeting with the School Committee and NPS, and on April 19 we will hear the Mayor’s overall budget proposal. In order to facilitate our review of the NPS budget, I’m sharing my understanding of the current situation and suggesting some key questions to ask when we meet with the School Committee, Superintendent David Fleishman and CFO Liam Hurley.
History—How We Got Here
I believe the origins of this crisis date to the Fall of 2019. A new agreement was reached with the Newton Teachers Association that increased NPS’ annual costs at a level higher than the City’s annual revenue growth. I just want to address “the math” that we are faced with. Clearly, the NTA, School Committee and Mayor’s Office are responsible for the negotiation and the City Council has no role in these discussions. However, we are now facing the consequences.
In early 2020 former School Committee Chair Matt Hills met with some of us to share a presentation that showed the contract’s impact on NPS finances given that the annual revenue allocation to NPS remained at 3.5%. A webinar with the presentation can be seen at https://us02web.zoom.us/rec/play/Ben4aDWW1OPiPiyeQNsyObic4v-LaQNQaVl1hN-IgvEenE9YWr0lkI5-NV8SFooGYqT9CnXy8r-zXU72.08MdDNL4b1adSdg9?continueMode=true.
Key takeaways included:
• Compensation costs are the largest driver of budget increases, as they are in almost every school system. Salaries and benefits were 87% of the total budget (they are now 88%) and the remaining 13% are items that can’t easily or quickly be reduced such as transportation, out-of-district special-ed tuition, and utilities
• NPS has more than 2000 FTEs, and most are members of the Newton Teachers Association. This means that the contract with the NTA drives almost the entire NPS budget
• It is impossible to balance the annual NPS budget if compensation costs grow significantly faster than revenue growth (and hence an allocation below projected increases), since compensation is almost all of the budget. If compensation growth is significantly greater than the rate of revenue growth, the only likely way to balance the budget is with staff reductions unless it is possible to increase the revenue allocation.
• During the last decade, NPS saw financial stability at a time of enrollment growth as the average revenue allocation grew at 3.5%-3.6%, while growth in compensation costs (net of retirement savings of approximately 2%) was consistent with the rate of revenue growth
• The contract that had just been settled saw an increase in compensation costs of 4.5%-5.0% annually (net of approximately 2% retirement savings), significantly more than the projected revenue growth of 3.5%. This amounts to an annual deficit of at least $2mm-$3mm each and every year. The new contract goes through August 2023
• Without an increase in the annual revenue allocation, a large structural deficit has been created. As we have seen by the Superintendents’ recommendations, the only possible way to balance the budget in this situation is to reduce staffing—mostly teachers—by up to $3mm each and every year. Because the deficit is structural, each year the budget must be reduced by another $3mm or more
• The additional state and federal pandemic funding and recent NPS “carryforwards” has helped avoid staff reductions for a short period of time, but there remain likely staff reductions as a result of the structural deficit.
What faces our city is just “the math”. We have a budget that rises annually higher than the allocation.
Short-Term Next Steps
The Newton Public Schools is facing a serious budget crisis which has been ameliorated some by the recent infusion of funding. The budget shortfall is especially heartbreaking as we emerge from the pandemic and our needs are so high. We must understand that it is the structural deficit creates such severe options for NPS to balance the budget.
The City Council has limited ability to address this situation on our own. Councilor Grossman and I have studied in depth our role in the annual budgeting process using DLS guidance. However, we have an obligation to have a deep understanding of the problem and work with the Mayor as we move forward past this fiscal year budget. As elected leaders of Newton, it is our responsibility to ensure that NPS remains a jewel in the City’s crown and that we do not turn our backs on our students at a time of heightened need. And on a personal note—as a lifelong Newton resident, as a former School Committee Chair, as a mom of former NPS students, as City Council President—I do not want to be complicit in the degradation of our beloved school system if we have options and choices to avoid that outcome. I was an active parent when the baby boom echo started to work its way through the schools, encouraging the School Committee to face the coming surge of students, and now we face enrollment decline. Neither side of this curve is easy to manage.
We have serious financial pressures in our overall City budget. We received an enormous amount of pandemic funding from the federal and state government—a great deal of which is unspent and unallocated and some of this has facilitated the recent gap reduction. Most of that funding must be spent by 2026 and will not be indefinitely available to address a structural deficit. Long-term City revenue is projected to grow at 2.5% annually plus new growth.
As I approach our review of the NPS budget, I am viewing the budget crisis in two parts: the budget cycle this year and next during which time our expenses are “locked in” and we will suffer staff reductions even with the Mayor’s recent infusion, and the post-2023 period when NPS has more flexibility to address its expenses. Agreement will eventually be reached on compensation in the new contract that begins in September 2023, and the School Committee will be responsible for ensuring that NPS can provide an excellent education within the City’s annual revenue increase.
Questions
I believe we have options to help NPS address the significant structural deficit this year and next, and I’ll discuss those options more when we meet. In the meantime, here are some of the questions that I would like addressed starting on April 13 when we meet to discuss the NPS budget:
1. Is it correct that compensation costs are 87%-88% of the total budget and are growing at 1.0- 1.5% faster than the 3.5% annual revenue allocation? And is this annual revenue gap equal to $3mm or more?
2. If the SC makes proposed reductions this year in order to balance the budget, will there be several million dollar reductions to make again next year if the revenue growth remains at 3.5%?
3. How has the recent allocation of $1.6 million of ARPA money impacted the NPS budget?
4. Why is it so painful to reduce less than 5% of our staff, after all it is only a small percentage of the overall FTE’s?
5. What other opportunities exist to reduce staff other than what you have proposed, and why were those options not proposed?
6. What options do we have to reduce non-compensation costs?
7. How do you see the proposed staff reductions for this year and next impacting the remaining NPS staff?
It was nice to see at least one elected official offer a realistic (if not catastrophic) view of finances.
The near unanimous vote in support of the MOA last night was shameful. The over $3.5m that will be spent on this, would more than cover the 2023 shortfall. Voting, “no” would have been the prudent thing to do, but instead the SC chose to grandstand with money they do not have.
In the private sector, bonuses are not guaranteed, and rarely given when the prior year was not profitable. A guaranteed price 4.5 – 5% is unheard of in the private sector, nor are 11 weeks of vacation nor or a retirement plan that guarantees 80% of their highest salary, for the rest of their lives.
This is not to say teachers do not deserve such perks. I’m sure it was part of the career decision making process. But municipalities do not “make revenue”, they collect taxes and are stewards of these limited funds. Balancing the budget is should the largest priority and responsibility of every elected office. Stumping for housing, bike lanes and the social cause du jour should be a distant second.
So instead of choosing fiscal responsibility, the SC votes to spend on grandstanding, a time when belt tightening and restraint is required. And unfortunately, many folks will lose their jobs as a result.
Matt – I haven’t been following things due to a work crunch. What does “MOA” stand for?
Hi Meredith – “MOA” stands for “Memorandum of Agreement” with “agreement” referring to the contract between Newton and NPS; basically an add-on to the original contract. In this case, the add-on, is a one-time, $1,500 stipend (bonus) to NPS teachers for workign thru Covid. A wonderful idea in concept and if Newton’s budget was flush with cash; $1,500 (after taxes) is arguably not enough.
But that’s not where the Newton budget is today. And for the School Committee to approve it 8-1 was fiscally irresponsible, especially given that $1,500 x 2,500 (let’s round down to 2,000 FTEs) NPS employees more than covers the 2022-2023 budget gap. I just don’t get it.
I wish we all got bonuses for working through Covid. Maybe the NTA could put a vote to their membership. Keep the $1500 and allow layoffs or “pay it forward” and allow more teachers to keep their jobs.
Those who had to show up to work everyday to interact with the public absolutely deserve bonuses…
Its not clear to me if teachers who worked remotely most of the time still qualified for the bonus?
This is great information from president Albright.
The explanation doesn’t seem to mention that a higher percent of the city’s revenue could be allocated to the schools during this time of need. Am I wrong to wonder if that is a possibility?
In some quick research, 3.5% revenue allocation seems relatively standard in Massachusetts. But if the core of the issue is that compensation costs are rising faster than the city’s revenue, surely a possible solution would be to increase the share of the city’s revenue that goes to the schools, and cut costs elsewhere.
I know some might hate this idea, but it does seem at least worth considering to me.
Here is a link (https://docs.google.com/spreadsheets/d/1uChayR-oo0_NOZ1oAIMI6BVpH2LEs0CPvHzaoIANoTg/edit?usp=sharing) to some of these figures over time (city budget, school budget, student registration, cost per student). I like Councilor Albright’s belief in “maintaining the crown jewel of NPS” but there is a lack of acknowledgement that declining enrollment is a result of poor decision making, especially on the part of the SC, vis a vis the education deliverable. Declining enrollment is not demographic. The decline is due to families leaving NPS. This has spiked the NPS cost per student beyond our peer districts. It is additionally not clear if our enrollment projections are realistic. This needs to be examined. Are we consistently over-projecting enrollment? The data suggests that we are. And there does not seem to be a plan to restore excellence in education. In the private sector a bailout comes with a new leadership team and other concessions. We need a turn around plan as a community before dedicating top-up money to NPS. I am also skeptical that ARPA funds through 2026 = acceptance by voters of an override. The link I shared shows that in 2010 the City of Newton budget began adding a small section where the SC budget is shown along with other City of Newton school spending with the total providing a better picture of complete NPS spending as a portion of the City of Newton budget. I believe there is still some work to do to transparently show the full NPS cost easily in the city budget. The City Council enforcing more precise enrollment projections and providing transparent total NPS spending would go a long way toward restoring confidence.
> It is additionally not clear if our enrollment projections are realistic. This needs to be examined. Are we consistently over-projecting enrollment?
With the pandemic steamrolling over all of modern life, I don’t think there’s a huge amount of “consistency” possible when your last few data points are historically blown up.
We will need to understand how the pandemic impacted/impacts ongoing enrollment. I assume that students who moved to private schools during the pandemic for any of a number of reasons might stay put, making that resulting drop in public school enrollment “sticky”.
But I don’t see that as either an endemic planning problem nor a preventable failing.
> The City Council enforcing more precise enrollment projections and providing transparent total NPS spending would go a long way toward restoring confidence.
I disagree that something as somewhat “insider baseball” as enrollment projections by NPS is strongly correlated with confidence. We are in a time of general social angst due to stress and social disruption (from COVID, political divisiveness, distrust, higher expenses, less time, social isolation, etc).
The pressure on our kids to perform is enormous. The pressure on our schools to perform, by many different definitions of “perform”, is enormous. Our schools aren’t hitting the same benchmarks they have hit in the past and there’s fairly widespread sense of a lack of responsiveness/communication by the NPS administration. THAT brings a lack of confidence, deserved or not. THAT’s what we have to overcome as a community.
We need to be believe we’re all on the same team again. To me, that’s infinitely more important than worrying exactly how many people choose to go to private schools, particularly during a pandemic. That seems like such a trailing indicator, chasing what’s at best a symptom of the problem (one that’s unfortunately tied to state school funding in my understanding).
President Albright’s letter is extremely thoughtful and well measured. But our problem is much simpler than her detailed analysis.
Newton has a budget shortfall. There are two ways to fix it. Either reduce expenses or increase revenue. So it’s worth noting that the City Council has completely missed multiple opportunities to increase non property tax revenue. Those missed opportunities are what has led us to this point.
I’m still confused about how more life science is better for Newton than a hotel at Riverside.
Newton gets property taxes (both the life science and hotel would be taxed at commercial rates, I do not know if they would have different valuations for the same size building) meals tax, hotel tax, marijuana tax, and various fees (vehicle excise, permits, etc.).
There are some state monies, especially for roads, but I can’t speak to them in any meaningful way.
/as always, a personal statement.
The measure of any administration is how well it creates value and ROI for all the taxes we pay. Newton gets 85% of all its revenue from property taxes, the rest of it being filled by commercial tax and other odds/ends taxes (excise). As a homeowner, all I see is my property tax bills getting higher YOY due to increased property values but visibly our streets look like crap – has anyone driven on Chestnut st? Center st? the entire stretch of Needham St.? Now we have budget shortfalls in our schools, less programs in our schools, teachers/staff being laid off. I’m all for kicking the can down the road, which seems like a strategy most cities/towns do just to get by but at some point we must hold our elected officials accountable for how they are spending our tax dollars.
I would also add that our budget is also greatly impacted by our funding plan for paying down our OPEB and Pension liabilities as each year we put more towards that so that leaves less for our budget. This has been reflected in long-range forecasts dating back to 2017. So any increase in expenditures would have an impact in our ability to fund our programs. This should have been laid out more clearly and transparently since 2017 by all of our electeds.
I believe the phrase is “whistling past the graveyard.”
Albright’s usage of the NTA contract as the sole reason for this issue ignores reality.
NTA worked twice in a four year span without a contract. NPS’ teacher salaries lagged in 70th place in the state, even as our academic performance far surpassed that. Newton repeatedly failed to increase teacher salaries over time, and so we got one giant shock to the system instead.
That’s entirely self-inflicted, and an indictment not on NTA, but city leaders.
70 out of 300 School Districts, which puts Newton teacher salaries in the top quartile, before the increase.
Boston and Framingham both have higher average teacher salaries – I don’t know of any research that links higher teacher salaries to better student outcomes in public schools.
If you’re okay with Newton being 70th, or 50th in the state in education, then sure “top quartile” is fine.
Looking at all 300 districts is also cherry-picking somewhat, you’re including lots of tiny school districts that aren’t “competitors” to Newton.
NPS teachers can, and if you don’t pay them enough, will, work in Weston/Wayland/Lincoln-Sudbury/Brookline/Needham/Wellesley etc. all of whom historically have paid much more.
Any good piece of research will account for the fact that district likes Boston and Framingham need to pay more because of “more challenging” teaching environments from have a significantly higher proportion of low-income, ELL, and IEP students.
There’s pretty strong domestic and international research showing a linkage between higher teacher salaries to student achievement:
https://cepa.stanford.edu/sites/default/files/loebpage.pdf
https://files.eric.ed.gov/fulltext/ED556718.pdf
https://www.educationnext.org/do-smarter-teachers-make-smarter-students-international-evidence-cognitive-skills-performance/
https://journals.sagepub.com/doi/full/10.1177/21582440221082138
https://www.tandfonline.com/doi/pdf/10.1080/13504850802167223
Just to clarify, Newton wasn’t “70th in the state in education”. It was 70th in the state in teacher salaries.
… though yes, the two are indeed related
Teaching in Newton is very similar to teaching in communities such as Needham, Lexington, Brookline, etc. Like it or not, these communities are our competition for top candidates. Why would a top-notch candidate choose to work in a community that pays less when s/he can drive 15 minutes in any direction and earn more for doing essentially the same job?
If Newton wants to attract top candidates (the vast majority of whom have huge student loans to repay), then compensation needs to be in the ballpark as that of nearby comparable communities. The last contract did just that – we are now in the ballpark.
I keep hearing that the “math” doesn’t work. Unfortunately, being competitive with comparable communities is part of the equation when it comes to attracting and retaining the best educators.
This clearly works if poor performing teachers can be let go. I assume the union makes it extremely difficult to identify and let go poor performing staff.
I wonder if the NTA would give NPS more discretion to fire bad teachers in exchange for a higher pay scale. i would vote for an override if that was the case.
#1. NPS has a robust educator evaluation system. NTA is not involved in the evaluation process itself.
#2. Mass. General Law 71, Section 42: No teacher with professional teacher status shall be laid off pursuant to a reduction in force or reorganization if there is a teacher without such status for whose position the covered employee is currently certified or if there is a less qualified teacher with such status holding the same or similar position for which the covered employee is currently certified.
President Albright is quite thoughtful in her approach and candid in her delivery. Her assessment outlines an important point – Governance in our school district does not work. This is just one example that illustrates there are no checks and balances are missing.
So here are some additional questions I would want answers (not to put blame, but to make sure we do not repeat this situation again)
1. How could Mr. Hills could forecast this, but the School Department / Negotiators could not?
2. Elementary school population has declined, and is projected to further decline (per NPS). What does this mean on the viability of neighborhood schools that makes Newton such an unique place? Are we committed to maintaining neighborhood schools and maintaining the level of services regardless of enrollment?
3. (May be tangential to CC but) – Does NPS have a plan to bring families back? What is it?
Some more info:
https://www.newton.k12.ma.us/site/handlers/filedownload.ashx?moduleinstanceid=9465&dataid=14375&FileName=February%202021%20Enrollment%20Analysis%20Report_OnlineVersion.pdf
Hi FWG – Is there a point you are making? Sorry not following it. TIA
Hi Shalini, my point is that the enrollment issues aren’t exactly new, and are certainly known to the NPS.
When comparing teacher salaries, health insurance should be compared too: what proportion of health insurance is the town paying?
Also, how many years of healthcare do teachers get after retirement? This should also be factored into total compensation discussions
I am surprised that people are so surprised by this. The limits on municipal tax revenue growth in MA are such that 3.5% is going to be near the high end of things, and the numbers on NTA salary growth are very obvious if you look at the agreements. On top of the general crowding out of the budget caused by the catch-up OPEB payments (which are fundamentally a generational transfer from services rendered but not paid for in the 90s and 00s).
I would like Newton to both compensate our teachers and do things as a city government in addition to providing education. Unfortunately, I can’t go back 20 years and raise their taxes, so the reality of now points to an override. I would, however, like to see everyone supporting the teachers’ contract front and center in supporting that override… The political two-step of being a big NTA supporter and simultaneously against any tax increases is naive at best and cynical or hypocritical at worst.
“I moved here for the excellent schools that we used to have, but didn’t pay for and now have to pay for and can’t afford to.”
We’ve been in NPS since 2014, so I can’t compare it to what it was previously. But I really don’t believe it’s in such a steep decline talking to friends in other districts. I feel that we are still providing a high quality education. Recently I talked to a friend in Weston who is in constant battles to get IEP needs met. WESTON. On the other hand, we’ve gotten everything we’ve needed (and then some) in terms of SPED. Test scores don’t matter much to me, especially as we are becoming more and more of a place where people from other countries call home so we have more kids receiving ELL services.
Most of the teachers so far have been excellent. This isn’t to say that I don’t have complaints – I have plenty. But I think we still have an excellent district. I will add that I do not trust Fuller to do the right thing in terms of NPS. OR she does the right thing at the last minute. I think we desperately need new leadership to make NPS better.
Lastly, I’ve said this before but I believe that the issue with more families choosing private is a matter of class. I know a few families whose kids are in private school. They are wealthy and they want their kids to go to private school because of prestige and connections. Some do it because they want their kid to be in class with kids of their same socioeconomic status. I recently saw a post where a parent who just moved to Newton didn’t want their kid to go to an “urban” school so they’re opting for private. As Newton gets wealthier, I think we’ll see more of this. I hope some new housing initiatives are able to court families who are closer to middle class.
Anyway, that’s my Thursday morning ramble. Happy April Vacay, folks.
MMQC – while some families may choose private school for the class/prestige reasons you mention, others choose private school because of the prevailing sentiment around test scores that you mention in your comment. Some believe that test scores measure academic achievement and learning, and that high test scores are a mark of a good school. NPS’s test scores have been dropping, ergo the move to private schools, where rigorous academics (and resulting high test scores) are generally still seen as important.
I’m also v surprised none of my kids get homework. Extremely unusual, i really feel a lack of academic rigor. Let’s be honest, the best way to do well in life in through education… i just dont feel it in Newton.
I don’t blame the teachers, i blame the culture from the top
The lack of homework (or the smaller amounts) is in line with the current research/line of thought with education experts, though. I wouldn’t equate homework with rigor anyway.
abolishment of homework = equity
Another thing the majority of parents never ask for.
https://leadinggreatlearning.com/inequities-hidden-in-plain-sight-homework/
My child was on an IEP from K-12, in Newton, and I had to hire an advocate to get the needs met. There was ALWAYS an excuse of why something was being delivered. It was awful. Glad the child graduated, and I no longer have to deal with the IEP process.
Some classroom teachers were FABULOUS. Some were NOT. But fighting to get the expertise that my child needed was awful. The elementary principal must have been relieved when my child went to middle school.
One example: Second grade met as a WHOLE community at the same time that social prags was given for second graders. My child (and three others) were left out of COMMUNITY because out of the whole week, that was when social prags was given for children with ASD. So really it was every second grader at the school but four kids with ASD. And I thought it was unfair.
Another example: My child excelled at languages, but was told in sixth grade he could not take a foreign language because ASD kids needed more support. By Thanksgiving the SPED teacher told me what a mistake that was and my child could do a foreign language. I had to pay for a tutor to get him up to speed.
I hope other parents have had better experiences.
I am impressed with all of the new SC members. It is still early, but I will cross my fingers.
Paul Levy at 1:12 deserves as listen (https://newtv.org/recent-video/24-newton-school-committee-meeting/7460-newton-school-committee-april-12-2022). He does a great job identifying some of the SC’s fundamental flaws. It contrasts with the countless minutes of SC meetings that are devoured with SC members thanking everyone of doing a great job.
This budget still does not address the poor state of the old schools like Countryside, Mason-Rice, and Ward. I heard there were times when Ward had no heat. I heard Mason-Rice flooded twice this year from burst pipes with one day shut down for a Flood Day with students arriving on foot, bike and bus sent back home because the school couldn’t open. Paul Levy flagged this issue and thus voted against the budget. If (and more like when) another disaster happens, Newton can only hold the Mayor and the School Committee accountable because the Superintendent who has neglected this pressing issue for other parts of his agenda will be gone.
For anyone interested in the future of Newton policy/reform, last night’s Programs and Services / Finance Committee meeting was a “can’t miss”.
Some Councilors were excellent…reminding us all the primary remit of municipal government – to squeeze maximum impact and services out of a finite stream of tax revenue.
Others were focused on everything but, ie. college shaming. A few began to hint at another handout (override), and one even soapboxed about unfair taxation, despite having little personal experience in contributing to Newton’s tax base or balancing a budget greater than a checkbook.
This is all to say, while popularity contests are fun, municipal government is serious business, hard work and who we elect matters!
https://vimeo.com/699204555