Chamber urges a split vote on Newton overrides
Newton voters face a difficult decision on March 14 when they will be asked if they support Mayor Ruthanne Fuller’s request to raise property taxes by approximately $15 million in the form of three separate Proposition 2 1/2 override ballot questions.
The Charles River Regional Chamber’s Board of Directors has listened carefully to the mayor, other city and school leaders and to our members. Ultimately, we’ve concluded that while the city’s need for revenue is genuine, we cannot fully endorse the mayor’s requests because of the financially devastating impact a tax increase could have on many of our businesses and commercial property owners.
The chamber is recommending voting “no” on Question 1, which would raise property taxes annually by $9.2 million starting in July (on top of the usual 2.5% increase). However, for reasons we will explain below, we recommend voting “yes” on Questions 2 and 3, which are debt exclusion overrides earmarked for two specific school building projects.
No on Question 1
Our businesses need tax breaks right now, not a tax increase.
Rampant inflation, labor shortages, soaring wages, rising utility costs from the war in Ukraine, supply chain shortages, high borrowing costs, depleted savings, some of the nation’s highest child care costs, the possibility of a recession, and a softened demand for office space, are all contributing to an uncertain economic future. Without significant relief, we fear Newton could see more vacant storefronts, empty buildings and layoffs in the days to come.
We recognize that our partners in municipal government are combatting many of the same economic headwinds. We also acknowledge that the quality of schools and city services contribute to what makes Newton a desirable and safe place to locate a business and to work.
In fact, that’s why in 2013 -- the last time Newton asked voters for a tax increase -- the chamber endorsed a yes vote on all three override ballot questions. But economic pressures on our businesses, particularly our smallest businesses and small commercial building owners, are different now.
This time, rather than increasing its operating budget we need City Hall to hold a line on its spending, just as so many of our employers have. Yes, that likely means making some difficult budget cuts, just as many of our employers have.
It also could mean that the city should dig into cash reserves – perhaps including millions in unspent ARPA dollars – to get through the upcoming year. It’s not sound fiscal policy to dip into savings for recurring costs. But dipping into savings is something many employers have been forced to do over the past three years. It might need to be on the table now.
And for the record, Newton’s commercial property owners already contribute a lopsided proportion of the city’s tax rate. Due to the city’s split tax rate, commercial property is taxed generally 175% higher than residential properties.
In fact, while Newton has some of the lowest residential property tax rates in the Commonwealth, it has among the highest commercial/industrial rates. The city’s residential property tax rate ranked 300th out of 352 cities and towns in Massachusetts in Fiscal Year 2022 (in the bottom 15%), while its commercial property tax rate ranked 96th out of 352 (in the top 28%).
We also have a few specific concerns relative to Question 1:
- When announcing her override requests last year, Fuller proposed a series of tax relief programs designed to help seniors, those with disabilities and other residents. We applaud those initiatives. But we wish there were also funds or provisions to offer tax relief for our most vulnerable businesses.
- The administration also touts the fact that the operating override includes a $1.4 million line item “for streets, sidewalks and improving street and sidewalk safety.” But, in truth, the measure only provides level funding to maintain roads and sidewalks, as opposed to additional spending for something of utmost importance to many businesses.
- The largest portion of the operating override, $4.5 million, is earmarked for the school budget at a time when a survey found only 31 percent of parents agreed that “the district is heading in the right direction.” It also comes as enrollment is shrinking. Kindergarten enrollment (a precursor of future years) is at its lowest since the early 80s and has decreased annually since 2013. In addition, Interim Superintendent Kathleen Smith told the chamber the department is conducting a $100,000 study of neighborhood patterns and that by December may possibly suggest closing a school. It would have been prudent to have had that report in hand before asking taxpayers for a $4.5 million school budget increase.
Yes on Questions 2 and 3
The chamber feels differently about Question 2, which requests a $2.3 million tax annual increase for 30 years to build a new Countryside School and Question 3, which seeks $3.5 million a year increase over 30 years to renovate or rebuild the Franklin School. We recommend a “yes” vote on both.
While its appropriate to ask the city to hold the line on operating expenses for the next year or two as the economy rebounds, we’re convinced that both elementary schools are in dire need of upgrades due to deferred maintenance. And neither of these facilities would likely be considered for closing based on their locations.
Making these capital improvements is a sound investment. It also helps that the bulk of the increases if Questions 2 and 3 are approved won’t hit tax bills until 2030 when construction begins and we would hope the economy will be on firmer footing.
There is however, one notable shortcoming. While the Fuller administration decided to seek funding to upgrade Countryside and Franklin through separate ballot questions, embedded inside Question 1 is funding for capital improvements to the Horace Mann Elementary School. That was an unfortunate tactical decision. It puts voters, particularly voters in the Horace Mann district, in a difficult position. Should Question 1 fail and Questions 2 and 3 prevail, as we are recommending, we hope the mayor will identify other sources to update this school as well.
Our chamber has proudly represented Newton’s businesses and nonprofits since 1915. We’re proud of this city, its schools and all it has to offer.
But Newton does not exist in a bubble. The financial pressures and uncertainty on many of our business in 2023 are real. So is the competition from other communities and other states for our companies and for our talent.
We urge voters to hold the line on increasing the city’s operating budget by voting “no” on Question 1 while supporting capital investments to our infrastructure by voting “yes” on Questions 2 and 3.
Watch recording of the chamber's Feb. 7 Newton Business Community Town Hall with Mayor Ruthanne Fuller and Interim Superintendent Kathleen Smith