Mayor Ruthanne Fuller presented her budget for Fiscal Year 2026—her eighth and final budget presentation as mayor of Newton—and the grand total is about $623 million.

Fuller noted the difficult road the city endured through the COVID-19 pandemic and resulting economic crisis and, while warning of “another precarious moment” for the city’s coffers.

“Cold economic winds are blowing in for the city, our school district, our residents and our businesses,” Fuller said. “We face enormous economic uncertainty and, on some days, even financial chaos.”

Rising inflation, increasing unemployment and uncertainty around interest rates and the stock and bond markets are a few elements of that fiscal blizzard, with a possible recession and stagflation (cost inflation combined with wage stagnation) on the horizon.

About 25 percent of the Massachusetts state budget is paid for with federal funding that’s now at risk with the new presidential administration. And this year, Newton has received about $50 million in state funding, Fuller said.

Health care facilities and colleges are at risk of losing federal funding, and Boston College and Newton-Wellesley Hospital are two of Newton’s largest employers. The city’s restaurants are hobbled by higher cost of goods. There’s no federal relief bill coming. And families have to tighten their spending.

“All of us are struggling with high costs, from health insurance to groceries,” she said.

School funding gap

Fuller’s budget allocates $292.96 million, a 3.65 percent increase over FY2025, for the Newton Public Schools operating budget.

The mayor went down the list of other school items the city pays for. The FY2026 budget plan, for example, includes $22.6 million for school building debt service payments and more than $17 million for school pensions and other post-employment benefits (OPEB). And there’s $4.1 million for school crossing guards and nurses in the city’s portion of the budget.

“In fact, all together, there is approximately $44 million in spending for the Newton Public Schools picked up by city departments,” Fuller said.

“I prioritized the Newton Public Schools,” she insisted.

This chart, made by Superintendent Anna Nolin, shows five school budgets with varying amounts of increase. Newton Public Schools

The NPS operating budget, however, is where the current budget crisis lies.

Superintendent Anna Nolin presented a budget proposal for NPS, which the School Committee recently voted to approve, of more than $296 million.

Nolin had created a chart detailing five budget models, ranging from one that requires many cuts to one that increases the budget 9 percent. The budget Nolin has opted to go with is the “level-services-plus” one, which requires a 6 percent increase.

Inflation is the key driver in that. Out-of-district tuition (money the district pays for kids who transfer out of the district) has gone up 14 percent, while health insurance has increased more than 11 percent.

And there’s a lingering specter of a past contract that included kindergarten aids that—if a court ruling sides with the teachers’ union this fall—will have to be factored into the budget.

The result is a gap of between $3.7 million and $4.5 million (the latter reflects the kindergarten aids in case the district loses that court case).

The amount Fuller is giving schools is actually more than expected.

“Last summer, and again last fall, I let Superintendent Nolin and her team know that they could plan on a 3.5 percent increase in their base allocation and a 3.5 percent increase from the NPS Stabilization Fund,” Fuller said. “In January, after some hard work on the budgets from the municipal departments, I was glad I could let them know we could increase the NPS budget by 3.65 percent.”

The $292.9 million is 10.3 million more than FY2025, Fuller noted, and the mayor doesn’t decide how that money is spent. That’s up to the superintendent and the School Committee.

And the municipal side of the budget, excluding debt service and retirement costs, is increasing less, by 3.5 percent.

Under Newton’s charter, the School Committee can approve any budget but, in the end, the mayor decides how much money departments get.

Proposition 2½ limits how much a community can raise its overall tax levy each year, not counting revenues from new growth. Newton gets the vast majority of its revenues from residential property taxes, and growth tends to be about 3.5 percent each year.

In recent years, budgeted revenue amounts have been smaller than the actual revenues have been, due largely to high interest rates bringing more interest income and local meals and excise taxes generating more money than expected.

Federal money like that in the American Rescue Plan Act (COVID-19 relief) and debt exclusion override revenues should not be factored into growth, Fuller warned, because those dry up quickly.

Fuller offered several possible ways to close gaps in school funding going forward:

And, Fuller said, the city departments all have to share.

“Over 65 percent of Newton’s total budget is spent on our public schools,” Fuller said. “The remaining 35 percent pays for all our other needs—police, fire, roads, parks, services for older adults, human services, public health, the library, the debt service for all our buildings, retirement benefits and more.”

By having a department that uses 65 percent of the city’s spending and sees cost increases as steep as NPS has seen, Fuller said, “We are cannibalizing all the other vital public services on which our residents rely.”

Newton CFO Maureen Lemieux speaks to the City Council on April 22, 2025. Photo by Bryan McGonigle

Sustainability problem

Newton CFO Maureen Lemieux spoke next, pressing the importance of avoiding shortfalls with budget forecasts.

“One of the worst things we can do as a city is to budget revenues that don’t materialize,” Lemieux said.

Many school funding advocates, including School Committee Chair Chris Brezski, insist that the mayor can budget for more because the actual revenues have been consistently higher than forecast revenues, for Fuller’s entire tenure.

Newton also has a AAA bond rating from Moody’s, which allows the city to borrow money at lower rates than those with lower bond ratings. And Lemieux said the thing she’s most proud of this year is that, when reaffirming that AAA bond rating, Newton’s fiscal management was called “exceptional.”

“They’ve always said ‘strong fiscal management.’ They have never said ‘exceptional fiscal management’,” she said. “So for me personally, that’s a tremendous sense of pride.”

And over the course of Fuller’s time as mayor, Lemieux continued, Newton has averaged a 4.5 percent increase per year for the schools. And that average includes FY2021, in which the schools only got a 2.83 percent increase.

Lemieux said the city is trying to make the NPS Stabilization Fund last longer than it would if the mayor gives the schools what the schools request. The fund gets distributed to NPS annually.

“Our assumption was that it would increase at the same rate that the Newton Public Schools budget would increase,” she said. “We received the NPS multi-year forecast showing the Newton Public Schools using the money at a faster rate than we had anticipated. So we met with them and talked about it. This year in the FY2026 multi-year forecast, they actually are spending the funds at a faster rate.”

Using more of the Stabilization Fund would change the trajectory of the fund disbursement and mean that funds may run out before the city pays off its pension liability in 2032 (that’s when the city is expected to start having a lot more money available to put toward the schools), which would set up another budget gap crisis in a couple of years.

This chart by Newton CFO Maureen Lemieux shows what would happen if NPS requests for the fund were granted vs. what would happen if the fund is disbursed at the rate the mayor’s administration has set for it. City of Newton

With the NPS multi-year plan, the fund would be completely gone by 2029.

“That’s cause for concern, a dialogue that we all need to have,” Lemieux said.

This year, she said, there’s a $4.5 million gap. If the multi-year proposal by NPS was to continue, in 2030 there would be a $22 million NPS budget gap.

Fuller listed nine ways the city and NPS could address the NPS sustainability problem:

• More efficiency (possibly by closing an elementary school and decreasing recycling pick-up frequency)
• Evaluating outsourcing and insourcing services for savings
• Reducing scope and scale of current operations
• Slowing down the increase in funding retirement benefits
• Requiring any new major capital project (new buildings, etc.) to get a debt exclusion override, voted on by the community
• Renegotiating collective bargaining agreements
• Allowing more housing and commercial development, which is not limited by the Proposition 2½ tax levy
• More frequent, smaller Proposition 2½ overrides
• Working with the state legislature to approve more local tax options

“We should think about pulling all nine of these levers right now and using many of them sooner rather than later,” Fuller said.

You can watch the entire budget presentation online.

Editor’s note: An earlier version of this story had an incorrect percentage increase because it compared operat