Month: November 2024

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Schoolpocalypse Part 2: Please, Please, Please 

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Hi all. We had a whole second and third explainer in the works, with the background on the school committee’s role and how they are elected. But, things are kinda bad right now. We may get to it at some point, but today, we wanted to just talk to everyone. And a few people specifically. 

 

Hi guys, It’s KT this time! Anyway, Jim Dowd’s dead, which is really rude of him, as I normally would have had him help me with this. But where we are as a city, things are so bad the current management of the Clam rolled me out of the closet I was hibernating in. So I guess I’m here on my own, just one mom hyperventilating into a pillow at you. 

 

 

For us parents, It’s been a long week. It feels like Covid times again, doesn’t it? Ah, nostalgia. Is your house filled with tiny boxes of chocolate milk and those mini powdered donuts like mine is? It should be. Go to your local school and get some free food. The staff is dying to see a friendly face and give you seven different small containers of apple juice, I promise. 

Yesterday seemed so full of promise for our school situation. The daily messaging from the principals changed from the divisive tone and seemed more inclusive, more wiling to work things out, less finger-pointing. The phrase “illegal strike” didn’t even come up once, nevermind the seven thousand times I heard it last week. At least, for the moment. The no-school call came late. The teams at the bargaining table worked until nearly midnight. It seemed like we could be a community again, instead of whatever this is. 

But today’s sentiment, and releases from the teacher’s union, on the heels of what seemed like a promising day yesterday with both sides working late and hard… that sucked. And that wording was decisive. Not inclusive. It was clear we were so far from the end. 

 

And it was the breaking point for me as a parent. I lost it. In the middle of a long work day, I absolutely became the screaming cowboy in the sky. 

So many other parents I know, the ones who have always been smart and reasonable and involved, echoed the sentiment.  The patience we had is gone. The goodwill is waning. We are tired, our PTO days grow thin, our spring vacation plans fading like the photo of Marty McFly’s siblings after he kisses his mom. We work hours when we can to catch up so our bosses don’t lose their patience with us. We have family chip in. But some don’t have family. Some don’t have any options at all. 

Our children are bouncing off the walls at best, and really struggling without school at worst. 

Right now, our frustration is because this all has seemed so fruitless. The teachers feel disrespected. They feel the paras have been disrespected. Their frustration turns to agitation.

Then there’s a rally outside the house of a school committee member who isn’t home. But her young kids are. And they see their teachers, and dozens of other teachers, outside screaming at them. The people they trusted.

Then Greg Verga gives the finger. The freakin’ M A Y O R.  Sure, it was meant for a guy that has more than earned a middle finger salute with his aggressive stance on everything and I’ll go down swinging on that. But everyone saw it. It stoked the flames. There’s a rally outside the mayor’s house. People yelling at 10pm. Things have gone from bad to worse.

And then the Facebook warriors take every piece of news, every photo, every comment that’s thirdhand from a guy who used to sell cigarettes to Greg Verga’s second cousin and repeat it as gospel truth. Even when it’s nowhere close to the truth. Even when it’s taken out of context to make the other side look bad. “You weren’t at the bargaining table!” Sounds terrible until it turns out they weren’t supposed to be and someone much better suited to hammer out a particular detail was. 

Here’s the thing: When you tell people to get mad, you are responsible for what happens when they get mad. 

Right now, the kids are watching and listening. They’re watching the union obfuscate the truth if it doesn’t fit the agenda, and refuse to take responsibility for any of the downsides of a strike that they voted on after 60 days of no contract (with, according the the Globe, suspect timing). They’re watching the mayor be petty. They’re watching the school committee hire a firm to write scathing emails every night. 

 This community is made up of fantastic caring educators, and also hard working committee members and administrators who care about this city, and both sides are stuck in a vicious cycle like when eagles lock their talons and fall to the ground in a death spiral.

It’s been…bad.

The timing is awful. We just lived through a fraught election cycle, and got no room to breathe. The parents, the kids, the city did not need this. But we were thrust into it, all the same. 

And it feels like tonight we’re on the edge of the cliff, where something big and bad looms if we aren’t pulled back. Like the city is a powderkeg ready to explode. Today was the first day I felt like something really terrible could happen from this, and someone could get hurt, accidentally or otherwise. People are that upset and whipped up, a mob unable to regulate. It isn’t getting better. It’s getting worse. But it doesn’t have to.

Right now we are lucky enough to have a school committee full of people who care deeply about our community, our kids, and, most importantly, education. They are our neighbors, our friends, our coaches. They care. To turn around and treat them like this is a continuation of the election and they are the enemy is not fair. It is disingenuous. It is ugly. Who will want this job when they are done? Who is going to run to be treated like that? 

Assuming the worst of intentions from the folks on the other side, and only assuming the best on your side, is never going to end this strike. It’s damaging, especially when it’s not just assuming these intentions, it’s also announcing them publicly to make people upset. 

Having hundreds, perhaps even thousands of people who haven’t been paying attention – until everything came to a screeching halt – believing literally anything without verifying the truth or understanding the backstory or the reasoning makes the problem worse and widens the divide. 

I want the teachers to get a fair contract so they stay here instead of jumping to a district where they can get more money, and benefits that keep them educating instead of moving to private sector jobs. Our educators are amazing, and there are so many teachers who have helped my kids in the decade I’ve been a GPS parent. But I also understand where our city is financially. The school committee is only given a specific amount of money to fund the budget. We need to address that. If a contract goes through and we can’t fund what we need, our educators face steep layoffs to stay within the budget given. That’s the truth at the end of the day. The problem of school funding is systemic and can not be solved in a few weeks by a handful of elected community members. 

I promise you, all of you on either side, that no one is trying to do their worst. At the same time, we all need to be doing better. Taking stock of where we are and how we can get to the end goal of a signed contract for our educators and paras with a reasonable salary the city can pay for in line with our peer districts. How we as a city pay for what we need- because the money we have right now is not enough. 

I do not say any of this to be patronizing to either side. I say it because I have been there – I once went through a divorce where everything seemed personal and disrespectful and I would not give in on anything because of my anger. No one could convince me that the righteous anger I felt was maybe not the full story. But time healed, and I moved on, and I realized – in that moment, I was unable to see the forest for the trees. I’m thankful for that gift of time, and that once it passed, it was clear our goals were more similar than we could have let ourselves believe in the thick of it. 

Being too far in the fight, entrenched for so long has clouded the vision of those tasked with coming to an agreement. Our words and actions matter. Finger pointing and declaring your side not responsible for any of this mess does not solve the problem. Every single person involved is part of the problem, and must also seek a mutual solution. There has been progress. Focus on that and let it guide you. 

Let’s get this done, unified, as a community. Please. Find a “good enough,” a “close enough”. For all the kids struggling with no one home to help them, for all the parents who cried silently in their closet today when they learned we weren’t done, for the teachers who miss their students, for Fiesta’s sake! – take a deep breath, forgive the words said in anger by the other side, stop saying them yourself, remember to use your indoor voice, and move forward, while we still can. 

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Schoolpocalypse Now! Part 1: The Damn Budget

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We’ve had a handful of folks ask for our take on the school strike and asking for us to explain what’s going on, how we got here, and how we can get out of it. And while we’re low on time (because of the kids we gotta watch all day now), we figured everyone has a point. We aren’t getting an easily digestible, truthful breakdown of our current situation. So here we are, in as factual language as possible. First we’ll start with our budget, then how our school committee functions, and finally an analysis on where both sides are. We are definitely having fun and not during this under duress, while screaming into the void. It’s fine, this is fine.  

I have insomnia. Explain how city budgets work so I can get back to sleep.

Like most businesses, the city’s budget runs on an annual basis, from July 1 to June 30. The budget process starts months in advance of that date – taking nearly a year overall from start to finish. The process kicks off with the mayor consulting with department heads on their needs to build the budget. The Mayor then submits this budget to the City Council. There are 9 City Council members, and 3 are on the Budget and Finance Committee. Budget and Finance are tasked with doing the Mayor’s proposed budget review before it is presented to the full Council for a vote, but other councilors should, and do, keep an eye on things at all times. From there, the full city council reviews the proposed budget in a series of public meetings. The city council can only amend the budget by keeping it balanced – they cannot add to a specific department’s budget without taking the same amount of cash from another department. State law requires municipalities run balanced budgets. 

 While the city council can request the mayor take a look at increasing revenue projections to bridge the gap, it’s not often prudent to overestimate as a shortfall can be extremely problematic, and the funds can’t materialize out of thin air.  The final budget is voted on and becomes effective on July 1st.

This year, the difference in what the Superintendent requested from the mayor and what was allocated in the budget was roughly $6M, due to spiraling special education costs (we will get into this later, if we can drink enough to make ourselves). The superintendent’s budget overview is here for reference.  After going back to the drawing board, using non-permanent ARPA funds, and creating a $750k special education stabilization fund, as well as cuts to other parts of the budget to bridge the shortfall, the remaining gap ended up at $2.2M out of the total $165M budget. Despite the efforts of the Budget and Finance committee, there was no way to fund the level services budget that the superintendent had requested.

The UGE is saying we have the free cash available, so why can’t we use it?

 

First off, let’s dig into the concept of “Free Cash.”  Much like a household budget, it’s the bits leftover at the end of the year, after the city has balanced their budget to account for their expected revenue. For example, if a municipality projects $1m in revenue, and has $1m in expenses, the budget is balanced like mentioned above, But, a few months in, Steve at the DPW decides to retire six months earlier than expected, and a few expected capital expenses came in at lower cost than budgeted for. You have an additional $100,000 at the beginning of the next fiscal year. Hooray, free cash! The state says, “Awesome job, you smart, good looking people of Gloucester! You can hang onto it in a special account and choose what to use it for.” A good city budget does not leave too much or too little in the free cash accounts. Some is used for stabilization funds, to cover for future budget instability.

It’s not free real estate.

 

Free cash sounds great, but there are expenses that it’s good for, like one-time purchases that avoid accumulating debt, and expenses that are a very bad idea to use free cash for. Recurring, annual, contracted salary expenses are that bad idea. It’s discretionary and not guaranteed, and each year expenses change. While we have had several years in a row of favorable beach receipts thanks to a post Covid boom and low expenses for winter storm plowing, that is not guaranteed to continue, and those are big variables in our city’s budget. The one exception to the “no deficit” rule we mentioned above is the snow budget. Communities can set a baseline prediction and then if they blow through that they can use free cash to patch it up after the fact. Next year, we could run very short and rely on that money to bridge that gap. In that case if the money’s gone to payroll, more layoffs occur. Relying solely on “free cash” to fund the shortfall as the UGE has called for isn’t sustainable when we’re talking about salaries for the most massive department in the city. However, as we mentioned above, $750k from the free cash was earmarked to stabilize the special education costs, which does alleviate some of the downward pressure on the school budget. 

Why does Free Cash impact anything if it’s leftover money? Doesn’t having extra money mean the mayor can’t budget?

First off, the city’s available free cash has a large impact on bond rating. All cities and towns in MA have interest bond rates. Ours is currently AA. We got there after 13 years of hard work on the part of several city administrations. We could do a whole other article on this topic, but one thing at a time here. 

If we have no free cash, our bond rating will fall. Having no free cash is a signal to those lending us money that we may not be able to make good on our debt obligations. In that event, it becomes more expensive to borrow for capital expenditures. We are fortunate to have a good rating because when the City Council votes to borrow money, we can do so at a lower interest rate. Think of Free Cash and a bond rating like equity and credit. If you don’t have a good credit score or a down payment to buy what you need, you’re going to end up paying much more over the course of a loan. While we’d love to pay everything in cash, it’s not feasible to do so. The city relies on borrowing funds to pay for long-range capital expenses. 

Can’t the city administration just figure out how to get the school budget paid for by finding the money? It’s their job, right?

Let’s talk about how budgets actually get made and how revenues work. The vast majority of the revenue in the city’s budget comes from property taxes, though there’s also state-supplied funding for schools, road repairs, and other areas. There’s services that are paid directly by user fees like water, sewer, and trash called “Enterprise Funds” and are reset each year. Our property taxes are set by a formula established in 1978 with the passing of Proposition 2 ½ – which basically says that the maximum tax revenue is limited to 2.5% of the total taxable property, plus any new growth revenue.

So that new 6-unit condo that went up down the street on an empty lot? That’s new growth, as is the old empty plant that was converted to a restaurant and function hall. 

The total amount of property tax you can assess is called the levy limit. And ideally, you want your community to be well under that limit if possible, in case of unforeseen needs down the road. Like a better teacher’s contract, for instance. Let’s compare to our neighbors up the line. Salem has a total levy capacity of $130,115,164. Beverly has a capacity of $130,560,261 (these are FY2025 numbers from the Mass. DOR). Gloucester’s is $105,847,014.

Now, to look at the actual amount of property tax raised, Salem’s budget projects $122,077,395 raised. Leaving approximately $8 million in excess levy capacity. Without Beverly’s FY2025 numbers, we turn to their 2024 numbers as certified by the state. In FY2024, Beverly had a maximum levy of $125,928,475. They taxed $124,470,712 – so last year they only had $1.45 million in excess capacity. Not nearly as much of a cushion.

Using FY2024 numbers, Gloucester had a total levy capacity $101,671,528. And the taxes that were assessed were $101,622,847.

That leaves us with an excess levy capacity of $48,681. That’s FORTY-EIGHT THOUSAND dollars.  We are a sensible midsized sedan away from disaster. 

When cities bump up against this limit, they have two options. They can either cut line items from department budgets to get down to that limit, or they can ask the voters for permission to raise the tax to a higher level (usually for a time), and that is called a “Prop. 2 ½ Override.” If the city government can persuade the voters that the money ask is for a good reason, a “yes” vote enables that reason to be funded. Usually overrides are asked for things like major capital expenses (new water plant, new high school building, and the like). It all depends on the community and the budget practices. Having excess capacity allows you to raise taxes more to handle these things without having to go to a vote. 

Salem can afford about $8m in increased costs before they’d have to ask for an override. Beverly can afford about $1.5m. Gloucester needs an override to pick up a few scratchies at the corner store.

We have a second, looming problem that is going to cause havoc in our budget: the 3A referendum. Tracy O’Neil garnered enough petition signatures to call the recent 3A MBTA housing initiative to a ballot referendum. Unfortunately, this move means that Gloucester is immediately out of compliance with state law, putting our access to state funds at risk. Right now, the state is not giving anyone a pass on this. Grants we banked on since the city council had approved the 3A zoning district may be pulled out from under us – take the library, for example. The City is on the hook for that project unless the library can raise the funds, which they’ve thankfully been steadily doing. (We can still help with that, and we need a library now more than ever.) 

We’re also on the hook for our secondary wastewater treatment plant. We’ve been kicking this can down the road since the early 80’s. For forty years, we’ve been on a compliance waiver because our sewage plant does not adequately treat outflow to the level requires. It’s important to note that this secondary treatment does not have anything to do with capacity, it’s entirely the type of sanitation our sewage gets. Therefore, adding new housing units is not the cause of this expenditure. 

So we’re in a real pickle on how to pay for the school budget as it is, let alone our educators’ new contract. 

 

We can’t just take funds from other departments, months ago B&F went through the budget to find anything that could be re-allocated. We still need other departments funded adequately as well. Other departments like the police and fire have union contracts too, so we can’t claw back salary we’ve already promised. And salary is the big spend – roughly 85% of the budget. We can’t save enough reams of paper to solve the problem. 

So where are we now?

The most likely outcome is that if we hammer out an agreement near what the teachers want, there will be cuts to staffing to balance the budget, unless we can find more budget.  A Prop 2 ½ override has been our only option and we have failed to do it for so long. In reality, most cities we are looking towards as the beacon of how we want our schools to be funded rely on overrides. Looking locally, Boxford has voted for six overrides in ten years, all to fund schools. Groveland, Ipswich, Manchester, Merrimac, Salisbury, Melrose, Georgetown and Rockport have all voted for one or more overrides to funds schools in the past few years.  

 

Gloucester has not put forth an override question since 1991, to fund firefighter salaries. It did not pass.