01 Sep

What does an almost one billion dollar (and growing) debt mean for Newton?

The failure to act on our almost one billion dollar unfunded pension and health care obligations for retiring municipal workers and elected official is one of the most serious issues facing Newton. If we were to pay this obligation today, each of our more than 31,000 households would owe over $30,000! Having a debt this size will certainly change the way we pay for our basic city services including our schools. It is irresponsible to think we can avoid the problem any longer, or pass it off to the next generations of children and Newtonites.

In 2014, Alderwoman Ruthanne Fuller addressed the issue with a comprehensive primer defining our liabilities in no uncertain terms.Her final assessment was reasonable: “…there will be no one, single solution.We expect instead a multi-pronged, multi-decade solution. Over these decades and their unknown economic cycles, we will have to find the right balance between expenditures on City services and pre-funding/paying retiree benefits, taxes, and benefit levels.” Though we have taken small steps to address the pension and health care obligations (such as changing benefits for new employees and making modest annual contributions to pay down this debt) it is not enough and more must be done.

The harder answer is that we must put a plan into action by reducing expenses and adding revenues. On the revenues side, Newton should more determinedly pursue payments in lieu of taxes (or PILOT) from colleges in Newton. Boston College, for instance, pays no taxes though it does voluntarily contribute a small portion of payments in lieu of taxes. In 2007, the Boston Globe reported that “If Boston College, Lasell College, Mount Ida College, Andover Newton Theological School, and Hebrew College paid property taxes, the city would collect nearly $6 million annually.”  Though not obligated to pay taxes, it seems reasonable to expect colleges to contribute a larger percentage for services and infrastructure they use – especially on their for-profit components such as stadiums and housing. A goal of 25% of the estimated property taxes is what Boston and surrounding towns are working toward. The millions of dollars generated annually would be a substantial contribution toward our unfunded liabilities.

Newton can also increase commercial revenues. For instance, Newton has two of the most important factors high skills employers are looking for: an educated work force (ranked #7 in the entire nation!) and a commercial tax rate that is competitive; in fact, we have a rate that is comparable to Needham’s, our nearest competitor. The Wells Avenue office park, deeded for commercial space, is a perfect location for high tech employers who can hire Newton’s highly educated work force. Because commercial tax rates are double that of residential rates, taking advantage of this site for commercial purposes would benefit Newton. This is an opportunity my incumbent opponents are against. This makes no sense.

The business world has changed considerably over the past twenty years. Our dependence on brick and mortar stores for goods has been supplanted by internet shopping habits for reasons of both convenience and price. Goods and personal services that cannot be bought online such as nail and hair salons, food establishments such as restaurants and grocery stores are still needed and unique proprietor (“mom and pop”) stores are still the staples of our villages. But how can we draw other kinds of businesses into Newton? One area of growth is “shop online, pick up in store” services – that is, purchase goods online but pick up in a local store. Larger chains are using this method of drawing more shoppers. This model could be an opportunity for Newton’s commercial zones and villages.

Less appealing is reducing expenses. Still, a comprehensive look at our budget is in order. Enlisting outside authoritative advisors to identify duplication, waste, and unnecessary expenditures would be a good first step. Outside advisors, who would be more impartial, could help our city better make determinations. In consort with city administration and Aldermen and Alderwomen, all recommendations would be weighed against the needs and impacts on our community and the overall budget.

The city can’t “shrug it off” and kick our unfunded liabilities down the road any longer. It’s simply not possible to continue in this way.  We need to engage in serious public debate and we need to elect leaders who are willing to tackle this problem. I am committed to doing so. Please remember to vote for me in the September 17 preliminary!