NewTV’s Jenn Adams sat down with Mayor Ruthanne Fuller to discuss the rationale and needs for the proposed Newton tax override.
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There’s a lot of anger being directed at the Mayor on another Village 14 thread. From some of the comments you might think she’s holding people up at gunpoint and robbing them of their hard earned cash.
What Mayor Fuller is actually doing is following the law that prescribes how to ASK her constituents for more money to run the city. If you don’t agree with the Mayor’s request, then vote against whichever override you disagree with. Heck, vote against them all if that’s what you’re inclined to do. But please stop beating up the Mayor, who is just following the law. In my opinion she’s doing a pretty good job, and I’ll be voting for these overrides.
BUT… I do so with a great deal of hesitancy. Because overrides are a bandaid, not a solution. The real solution to municipal funding is to develop significant revenue mechanisms in addition to property taxes.
The voters handed one huge alternative revenue source to Newton when we legalized cannabis and its associated payments and taxes. Unfortunately the City Council completely fumbled the egg of that golden goose, and has thus far cost the city million$.
Coming in a close second on the City Council’s list of screw-ups, are the terms of the Special Permit they negotiated with Northland, which did very little to mitigate the impact of that development on schools. You can see the results of the Council’s folly evident in the fact that one of these overrides is now needed to address the nearby Countryside School.
My opinion… In the future, Newton would be better served by councilors who can think out-of-the-box when it comes to generating alternative sources of revenue. Because those alternative sources of revenue will make it much easier to fund the city without raising property taxes through overrides.
The other way to fix a budget is to cut things that are unnecessary. The answer isnt always increase revenue, sometimes it is cut expenditure.
General Laws of Massachusetts 71.71 Use of school property; purposes
For the purpose of promoting the usefulness of public school property the school committee of any town may conduct such educational and recreational activities in or upon school property under its control, and, subject to such regulations as it may establish, and, consistently and without interference with the use of the premises for school purposes, shall allow the use thereof by individuals and associations for such educational, recreational, social, civic, philanthropic and like purposes as it deems for the interest of the community. The affiliation of any such association with a religious organization shall not disqualify such association from being allowed such a use for such a purpose. The use of such property as a place of assemblage for citizens to hear candidates for public office shall be considered a civic purpose within the meaning of this section. A school committee shall award concessions for food at any field under its control only to the highest responsible bidder. This section shall not apply to Boston.
Source: The 192nd General Court of the Commonwealth of Massachusetts
curious, how much pot revenue has Newton received so far? Is it within projected estimates?
@mike striar
On the topic of pot-shop revenues, you wrote “Unfortunately the City Council completely fumbled the egg of that golden goose, and has thus far cost the city million$.”
Can you provide any specifics here? How underwater are we w/ respect to pot shops? And what specifically has City Council done to “fumble the egg”?
I don’t disagree with the point you make, but I’m curious to know specifics and you seem to be informed.
Thanks.
I don’t want the City Council’s mishandling of cannabis legalization to be a reason people vote against the proposed overrides. I think each individual override stands on its own merit, and I plan to vote for all three.
My point in mentioning Newton’s cannabis experience is to remind people that there are other ways for a municipality to increase revenue significantly [or, as was the case with Northland, to off-set costs] without raising property taxes.
Many members of the City Council in 2016 didn’t even recognize the revenue implications of cannabis when voters handed them that golden egg on a silver platter. They were too busy trying to overturn the results of an election they didn’t like, and making their electorate revote the cannabis issue twice.
Even today there is no one on the City Council who I feel genuinely understands how to develop new sources of revenue that might help Newton start inching away from being so property tax dependent.
Cannabis revenue is still part of the revenue solution, even though Newton has been slow to take advantage of it. How slow? The City has the ability to issue 8 adult-use licenses. To date there are 3 adult-use shops open in the city. Cannabis is taxed at roughly 20%, of which the municipality gets a portion. A municipality can negotiate up to an additional 3% through their Community Host Agreement. It’s millions of dollars per year, but not enough by itself to fully negate the need for the currently proposed overrides.
Thanks for the follow-up, Mike.
Great food for thought.
so what’s the projected amount given to Newton for this year? vs the expected amount?
@ Mike, that’s BS. Each override is directly the result of a failed budget process. Plain and simple. If we had a balanced budget and broad range of revenue streams than can grow above the 2.5% cap on residential then we would not need this override.
Again – Fuller can Fund 19 million for a senior center but not a 4.5 million operating deficit for schools? 200-300 people enter the senior center daily while 13K students attend NPS.
Flip the table here, if she was proposing an override for a 19 million dollar senior center, do you think it would pass? No. Its a political game. She knows the schools contingency is larger than the seniors, so she says to the school people – vote for this or schools will suffer…suffer because I funded something else that you wouldnt have voted for.
Its crap. Cut spending, not raise taxes. It will snowball. It is, as someone else said…a band aid. 4 years from now there will be another override proposed. and another and another…all because our leaders cant get their sh!t together and balance a budget.
We need a city review of Pot money aparantly…we need to be creative and create new revenue streams (ie 200/winter permit to park on the street or an X dollar tax on developers for each unit built, etc)…and we need to cut staff. Show the community you actually have a problem, not that you overspent on a pet project.
Vote No on the general. Vote yes for countryside and franklin.
@Bugek– Whose projections are you referring too? I’m not aware of any projections either from the cannabis industry or the City. My personal expectation was that each one of the 8 adult-use licenses would spin-off $250K-$500K per year for the City of Newton.
Additionally, there is the unsettled issue of cannabis cafes, which voters also approved statewide as part of the 2016 ballot initiative. Under Governor Baker the state delayed implementation. Mayor Fuller and other mayors should be pounding on the State-House door to speed up that process. It could be worth another million dollars a year to the City of Newton.
Is there a demand for a fourth dispensary in Newton? Is one in the pipeline?
North of the Pike is covered along Washington Street and Redi on Rt. 9 at Elliot Street is also really close to Chestnut Hill by car.
Newton Centre?
@Andy– Of course there’s more than enough demand for 8 cannabis shops in Newton. Just count the number of liquor stores in the city for comparison. Don’t forget the supermarkets that sell liquor. And keep in mind that scores of eateries in Newton also have licenses to serve alcohol.
I could make a very strong argument that cannabis is actually more popular than alcohol. It was the #1 cash crop in America for years, and that was even before it was legalized by so many states. I think the reason you’re questioning the demand is that you’re interpreting the lack of open cannabis shops in Newton as a lack of demand. In actuality it’s really just a reflection of how foolishly our City Council has handled legalization.
Skunkweed was never going to be a golden goose because the way the skunkweed industry wrote the referendum, limiting the amount of taxes local authorities could collect. I’m on the record here forecasting that total revenues would be $500,000 a year, not the millions people imagined. Guess how much the city’s been collecting? A whooping $500,000.
I based that forecast on $/sq foot found in other states and the abysmal tax rate the industry wrote into the law. Remember more stores does not mean a commensurate amount of more taxes because they would just take market share from each other.
You’re a regular Nostradamus with predictions, Bruce. You were opposed to legalization from the start. Supported overturning the outcome of the 2016 ballot initiative. And you have absolutely no understanding of the cannabis industry, or its evolution in Massachusetts.
The effective tax on adult-use marijuana is 20% in Massachusetts. Newton must compete with other cities and towns for its share. Right now our city is losing millions of dollars because of Newton residents buying adult-use cannabis in surrounding communities like Brookline, Watertown and Cambridge.
From the start, Newton was seen by cannabis entrepreneurs as an unfriendly place to do business. We are paying a price for that now. That’s a fact! There will be other overrides in our future unless Newton officials start thinking outside the box in terms of generating more revenue. That’s a prediction!
The 20% skunkweed tax goes to state coffers. The local tax is 3%. Also my Newton pothead friends don’t buy here because they don’t want to be seen doing so.
And if fewer people here stink up their neighborhood and damage their brains then as Smart Hulk says “I see this as an absolute win!”
Was inspired by a post and comments on NextDoor to take a closer look at my own tax bill.
From 2014 to 2021, our assessed value when up 45%. Tax bills in that same time, went up 30%. Can’t post pics on v14, but I encourage you all to do the same.
2 conclusions:
1. The proposition that tax increases are capped at 2.5% is
2. Home value appreciation may look good on paper, but the benefit comes only at the point of sale (or refi). For many homeowners it’s a disproportionate tax burden. Does one consume more city services simply because their assessment went up? No.
Assessment values are only loosely related to the billed property tax amount. First, the asked-for government expenditure is totaled. Then, that amount is spread across all property owners. The proportion of that spreading is determined by the assessed values relative to the assessed value of other properties. So if every property’s assessed value increases 5%, the proportion (percent) of the asked-for government expenditure, billed to a property owner, remains unchanged.
Other states calculate property taxes differently.
That isn’t to say that the assessments are free of unfair distortions in the values assigned to one property or another. The point is just that any issue one wants to take with total expenditures by City government is mostly unrelated to assessed values … at least as far as how the monies are calculated.
Two resources are useful here for understanding property taxes. First, here’s Newton Assessor’s FAQ:
https://www.newtonma.gov/Home/ShowDocument?id=8
Then there’s Massachusett’s explanation, complete with videos:
https://www.mass.gov/service-details/proposition-2-12-and-tax-rate-process
The issues that Matt describes reflect how property taxes work. When you own a house or other property, it’s an investment and (often) a home. It also happens to be an illiquid asset: you can borrow against it, but you can’t easily turn it into cash. You’d like it to appreciate, but when it appreciates faster than other homes or properties, you pay incrementally more in taxes. And yes, in some cases, that means that people who stretched to pay for their homes may not be able to afford the increased costs.
In the case of the proposed override, where the tax increases are about a dollar a day for most people, the change is not likely to push too many people over that edge. However, in the larger picture, the risk of losing a home due to loss of job, change in circumstance, or other factors is real.
“Home value appreciation may look good on paper, but the benefit comes only at the point of sale (or refi). For many homeowners it’s a disproportionate tax burden.” I don’t know about “many”. If your property is increasing in value faster than other properties, and the entire tax levy can only increase at 2.5%, by definition other properties are not growing at that rate. They are seeing smaller increases, possibly even decreases, even if their property values are increasing.
The irony of Matt’s comment is that Matt has, across many social media threads, argued for more property ownership opportunities in new development through condominium versus apartment construction. Property ownership *does* bring financial and other advantages to people, mostly because our tax system distorts the economics of buying versus renting. However, holding so much personal equity in an illiquid asset brings risks, particularly for younger and older homeowners. And those risks involve not just money, but potential loss of home.
Yes, a renter doesn’t gain equity in their property over time. However, they can invest money that might go toward, say, a down payment into an alternative asset that’s more appropriate for their financial circumstance.
That doesn’t mean that renting is inherently good and buying is bad, or vice versa. It means that there are tradeoffs for individuals, for municipalities, and for society. Those tradeoffs are even more important to understand with affordable or subsidized housing, where the government has a more vested interest in the process.
Property taxes have other problems as well (they tend to be regressive with respect to income, placing more weight on the poor), but they are the mechanism available to fund local municipalities in Massachusetts.
No one is saying taxes are evil. They are needed for society to run.
My point (consistently) is that it’s more than, “a cup of coffee per day” that the override supporters would have us believe.
I have not checked until recently, but I urge everyone to look at their assesed values over the last 10 years (https://newtonma.mapgeo.io/), then compare that against tax payments in the same timeframe. I assure you, it’s more than the limits of Prop 2 1/2 (2.5% capped increases). Add inflationary pressures, predictions of extraordinary winter heating bills, as well as rececession and job loss anxiety, and an override is far more substantional than a Sally Struthers ad (#cupofcoffeeperday, #checkyourownmath).
That said, a poorly timed override still does not negate the benefits of home ownership. It’s still the #1 path for generational wealth accumulation. We (Newton) say we want diversity, equity, etc. for all, but the only way to get folks there is to provide a pathway to home ownership – not $4k/mo apartments. To use a Game of Thrones analogy, all we’re doing is making lords like the Targaryens, Starks and Lannisters (or Northlands, Korffs, Toll Bros) richer – with our Mayor, and a bulk of the City Council leading the way.
Matt says, “I have not checked until recently, but I urge everyone to look at their assesed values over the last 10 years (https://newtonma.mapgeo.io/), then compare that against tax payments in the same timeframe. I assure you, it’s more than the limits of Prop 2 1/2 (2.5% capped increases).”
Sure, everyone should check. But, again, by definition of Prop 2.5, for every property that has tax increases above the levy limit growth rate (compounded over the duration in question), there should be properties below the levy limit growth rate. It’s more complicated than that because of new growth, but that’s the law.
“It’s still the #1 path for generational wealth accumulation.” That may be the case, in part due to tax policy, but one size does not fit all. Illiquid assets like property have risks and downsides for financial flexibility and personal mobility. Some people aren’t interested in “generational wealth accumulation”, nor have funds to safely accumulate. The simple fact is that 20% down payments put most housing stock in Newton out of the purchasable range for a huge class of people.
Not to mention the downsides of subsidizing affordable unit ownership, only to have units later sold at market rate. I prefer a housing policy that helps people keep good roofs over their heads and offers predictability of investment through market stability. I don’t think it is government’s role to specifically support “generational wealth accumulation” or maximize market rate return on housing in cases when they lead to inflation of housing costs and a constrained market.
But, back the topic at hand, these schools need replacing. I’d love to know how many people who are saying, “now isn’t the right time” would have agreed it was the right time anytime in the last decade. At some point the bill comes due, and Countryside and Franklin have delivered services rendered for long past their useful life.
You’re still missing my point Mike (probably intentionally)….the override is far from a drop in the bucket. But we can agree to disagree.
For what it’s worth, I’ll probably vote yes on the debt exception for Countryside and Franklin, but a hard no on the $9.5m operational override. Can’t on good faith throw good money after bad. The Mayor’s made her bed with Webster Woods, NewCal, solarized parking lots and other vanity projects (not to mention her blind support of Developers and consultants).
+1
Matt, whether the price of the override is a burden, or whether the value it would buy is worth it is up to each taxpayer.
My point, to you and to the poster on NextDoor that originally brought up the issue, is that growing assessments don’t uniformly lead to higher tax rates. It may be true for you and your property, it may be true for the NextDoor poster as well. But the law of averages and Prop 2.5 dictate that your increase in taxes is offset by other property owners’ slower growth in property tax rate, with the resultant tax levy basically being capped at a compounded 2.5% rate. So implying that everyone is in your situation suggests that Newton isn’t following Prop. 2.5%.
” I assure you, it’s more than the limits of Prop 2 1/2.” It isn’t. The average yearly tax increase, weighted by property value and with additional factors for new growth, is limited to a maximum of 2.5%. Higher on some properties, necessarily lower on others.
Oh, but it is, Mike. Other than the the period between 2008 thru 2011(?), when has anyone’s assessments and taxes have gone down?
Matt, I did not say anything about taxes going down. I said that when your taxes increase at a rate greater than the *compounded 2.5% rate* (or whatever the rate a municipality chooses), the tax on other properties must by definition grow at a rate less than that compounded rate.
And that’s true even if those properties are appreciating. It is just that they are appreciating more slowly than the Newton average.
Please look at the linked resources in my previous post. They explain all this in detail.
Matt, basically Mike is right. He doesn’t account for any debt exclusions or conservation surcharges on your tax bill but if outside of that your taxes increased by more than 2.5% per year then someone else had a decrease. The tax rates are approved by state authorities and I guess you could come up with some sort of conspiracy theory but most of us know better. The assessed value can go up or down based on market values as determined by the city assessor.
The request for an override couldn’t come at a worse time. We are dealing with runaway inflation, high cost of groceries, gas at the pump, housing and heating costs. The city must cut its spending and live within its means.
Thank you Peter. This is correct.
I am not supporting any override until we see a tangible reform that demonstrates a re-commitment to excellence for all for our students.
#noblankcheck
Isn’t a targeted rebuilding of the aged and broken Countryside and Franklin Schools a direct “re-commitment to excellence for all of our students”?
Hard to imagine a “plan for excellence” that involves old schools with flooded basements and hallways being used for classroom and office space.
Why can’t we commit to rebuilding these schools, making necessary fixes to our other ones, while at the same time continuing our other debates about Newton public education?
School rebuilding projects can be financed with state funds and innovative funding alternatives such as bonding and naming rights and private fund raising.
Countryside is being partially funded by the state, that’s why it’s debt exclusion isn’t as much as Franklin. Newton proposed both schools to the state, but unfortunately there are many schools in the state that need renovation and replacement, often in municipalities significantly less affluent than Newton.
Countryside and Franklin *are* being bonded. The debt exclusion overrides for those projects go directly to servicing the bonds.
As for naming rights, what naming rights are going to pull in $50M for each school over thirty years? For an elementary school?
And why on earth would we rely on private fundraising to pay to bring long time *public* schools in Newton up to state educational standards? Why do we need to invent new schemes to pay for what is one of the most basic civic obligations in our society?
Why is it now necessary for families in the north and south of the city who waited for their turn, while other neighborhoods got their replacements either by override or through regular budgeting? Kind of seems like a breach of trust and social contract to me.
Mike why wouldn’t you be open to innovative ideas on funding? Certainly state and federal educational funding levels have changed over the years, why not think outside of the box? If some wealthy benefactor wants to donate 50 or 100 million to renovate their local school I would support naming that school in their honor for at least 50-100 years
Jackson Joe, a big *if* on the rich benefactor wanting to pay for a new school in its entirety. Whether Newton decided to try something like that is a matter of policy. Newton Schools Foundation has a naming rights policy. It generally involves spaces, and apparently goes beyond what other municipalities do. It has advantages and disadvantages that are both understandable and can be debated.
But the examples of such funding being successful at the level of a whole school are, as far as I can see, basically non-existent. It’s not a plan. It is an idea.
If donors are really out there, let them come forward. But these schools need replacing now, and other communities (many far less affluent than Newton) and other generations have somehow managed to pay for their PUBLIC schools publicly, understanding that the monetary investment pays off plentiful dividends of quality education, civic reputation, and property values.
@Jackson Joe- You are correct we must start thinking outside the box in finding innovative ways to finance school building projects other than constantly depending on Newton taxpayers. These are tough economic times and people are strapped, I don’t see these overrides passing. Further, like everyone the City must live within their budget or pare back spending.