Statement on Deferred Revenues by City Councilor Bill Humphrey as Chair of Progressive Newton

The long-awaited release of deferred revenues from legal complications represents an opportunity, but Mayor Fuller’s proposed financial plan is not the best or most appropriate use of the money. The Mayor ought to consult first with the City Council and the public to solicit a wider range of proposals and engage in a more collaborative analysis of the trade-offs under consideration. That is exactly why the Mayor voluntarily consulted with Councilors and the public about the use of one-time ARPA funding from the federal government.

Newton’s long-term fiscal security is dependent on public confidence. Our revenue strength depends on the attractiveness of our properties and public willingness to vote through permanent operating revenue increases from time to time. If the voting public believes that the City of Newton and the Newton Public Schools are no longer delivering on core services and catching up on deferred critical maintenance in a visible, tangible way, they will not vote for additional operating revenues. If that cycle continues, Newton properties will only be attractive to residents who do not plan to make any use of city services or our education system.

The announcement of the deferred revenues becoming available finally may leave voters with an erroneous impression that ongoing operating revenues from an override were not necessary and that the administration has been concealing funds. In reality, there is still an undeniable need for more permanent operating revenues in order to help resolve the contract with the teachers and to meet the inflationary challenges of maintaining a steady level of city services. (We stand in solidarity with our public employees who are no longer being paid competitively.) But the voters made clear during the unsuccessful override referendum campaign, and in the years leading up to that election, that they wanted the city to prioritize catching up on addressing long-deferred problems, especially around infrastructure quality and safety, to prove that things are still going in the right direction, so that they were not throwing good money after bad.

If the city had had access to these revenues when they were supposed to be received originally, we would simply have spent them towards the annual budget each year in a more traditional manner. Instead, with access to these funds denied until now, the city and NPS made hard choices about deferring expenditures. It follows logically that these funds should now be used to address these problems finally.

The Mayor may believe that pension pre-funding is identical to deferred maintenance of physical infrastructure and assets, but it is not. In fact, the city’s future ability to pay for pension obligations depends entirely on the political willingness of the residents to continue increasing revenues over the long run. The city’s finances are not separable from the political opinions of the electorate. We need to prioritize visible improvements to the City in the current fiscal year to restore confidence as fast as possible.

A financial Rube Goldberg Machine use of deferred revenues, not even beginning in the current fiscal year, aimed primarily at future pension payouts, with theoretical but negligible spillover benefits to the Newton Public Schools, does not address the present-day disinvestment crisis, nor does it actually eliminate the need for additional long-term revenues. 

We are hopelessly behind the curve on roads maintenance, to say nothing of road safety improvement projects. This affects everyone’s daily life and reduces public morale. Despite road quality being the number one issue, and the number one cause of falling confidence in city government, once again excessive pension pre-funding for the future is being prioritized over fixing our roads in the here and now. Likewise, some of the funding could be used to address the urgent parent concerns about school staffing levels this academic year, even if this one-time funding pool is not a long-term solution. (Pending developments across the city are expected to begin generating additional permanent revenues in a few years anyway, however.)

Disinvestment from the present day is not the fiscally responsible course of action, because political considerations and public confidence cannot be separated from future financial health. It might be tempting to think that every windfall can be used to smooth out a future shortfall, but the City of Newton is not a private business. We are given public resources one fiscal year at a time, and we are not given these resources for the purposes of asset investment management. The public expects us to fix holes in the roads and schools today with this money, not potential holes in the budget years from now.

Making one-time catch-up surges of funding in the present-day is a valid form of investing in our community and building public confidence that translates into future revenues. The public deserves a say in how this delayed revenue is spent.