Businesses to mayor: Not a good time for an override

Johnny's Luncheonette in Newton Centre. Photo by Dan Atkinson

As Newton residents consider voting for $15 million in tax increases, many business owners in the city are worried about how those increases would affect their bottom lines, and are looking for relief from the city or a delay in the vote for a year.

But Mayor Ruthanne Fuller said while she understood businesses’ concerns, the overrides are necessary to meet the city’s needs and maintain services – especially in education – that make Newton a place where residents want to live and support their local economy.

“We have people who can choose to live anywhere in the U.S., we want them to keep choosing to live in Newton. That is directly related to the quality of schools and quality of life,” Fuller said during a virtual meeting with the Charles River Regional Chamber of Commerce on Tuesday, Feb. 7. 

 “No one is really arguing the merits of how important the school system is to the business system,” said John Rufo, principal at Form + Place architects and chair of the chamber’s board, at the meeting. “It’s mostly about timing and mostly about what we’ve been through and anticipate going through in the next 12 months.”

The chamber has not made any decision about endorsing or opposing the tax increases, but will consider the matter at its board meeting next week, CRRC President Greg Reibman said. But he said inflation, supply chain issues, fears of a recession and depleted savings due to the pandemic have businesses worried about more costs.

“I can’t remember a time when there was more uncertainty. Businesses are not back on their feet and not sure where the economy is going,” Reibman said.

Business expenses

Newton residents will vote on three ballot measures to increase taxes on March 14 – a $2.3 million increase to fund work at the Countryside School, a $3.5 million increase for renovations at the Franklin School and a $9.2 million increase for the city’s general budget, $4.5 million of which is dedicated to schools. Those dollar figures increase what the city is allowed to raise through property taxes, and would add $290 to the median homeowner’s tax payments next year, with another $183 added by 2030.

But commercial and industrial property owners also pay property taxes, and do so at a higher rate – 175 percent of the residential rate. In this current tax year, a resident pays $10.18 per $1,000 of assessed property value, while a commercial owner pays $19.07 per $1,000 of their assessed value.

Commercial property owners may not live in the city – and therefore can’t vote on the override – and their tenants may not either. But those tenants will definitely get that tax increase passed down if they have commonly-used “triple net” leases that require property tax and insurance payments as well as rent, business owners said.

“If property taxes go up then the lease goes up as well.,” John Driscoll, who owns Buttonwood Restaurant in Newton Highlands, told the Beacon. “It’s not atypical that a lot of stuff winds up flowing through to small business owners who can feel crunched.”

Driscoll said he did not know how much his lease would increase if the overrides pass, but said any increase would be tough to manage. Restaurants have been dealing with inflation and energy costs, but also have additional costs like paying to use OpenTable, Driscoll said, and do not have much room for more money going out.

“Speaking for my own business and restaurants in general, we’re working off very tight margins. It’s more challenging than it’s ever been,” Driscoll said. “Several hundred dollars is not insignificant because there are so many other costs similar to that.”

“We can’t increase menu prices to absorb costs, we would price ourselves out of business. There isn’t any pot of money I can go to,” said Johnny’s Luncheonette co-owner Kay Masterton at the Chamber meeting. “At a certain point there is no more, and we don’t have an override option.”

Right time?

At the meeting, Chamber President Greg Reibman raised the idea of waiting a year to ask for a tax increase. A delay would be useful, Driscoll said.

“That would be an accommodation that would be welcomed and helpful, people are still digging out from under right now,” Driscoll told the Beacon.

But at the meeting, Fuller said the city needs override funds now. School officials have projected a $2 million to $4 million deficit even if the override does pass, and say they’d face a $6 million to $8 million deficit if it does not pass.

“It’s never a good time to go to the voters and say ‘please support an override,’ this is a particularly challenging time. That said, this is the time,” Fuller said, adding that while schools have used one-time funds like ARPA relief in recent years, the override would create steady funding. “It’s a permanent increase — we’re always going to have 1 to 1 technology, we really need to surround kids with social and emotional supports, we are actively trying to support all kinds of learners. This is the time of need.”

But businesses need help too, Reibman said. While the Fuller administration has increased aid for residential property owners, particularly seniors, who might have trouble paying more taxes, he thought rebates or abatements for some business owners would help them deal with the increase.

Newton and other cities used grants at various points during the pandemic to help local businesses and that funding could also help, Reibman said. Masterton agreed.

“Maybe come up with a concrete way to get grant money or help with some of these expenses,” Masterton said at the meeting. “We are nudging up to the line of making Newton very unfriendly for local business. My fear is we get to a tipping point and it no longer makes sense for local businesses to be in Newton and you default to banks and national chains.”

“The mayor is right that schools add to the vitality of Newton but so do our strong village centers and businesses there, and those are very much in danger,” Reibman told the Beacon.

At the Chamber meeting, Fuller said city officials would look for other concrete ways to aid businesses. Driscoll, who lives outside Newton, said he understood city officials are facing their own budget challenges.

“I do understand the complexities involved, the timing may be tough for everyone on this,” Driscoll said. “We’re contributing to the tax base and we want to continue to do that and serve residents in Newton.”

Dan Atkinson can be reached at