Newton Mayor Ruthanne Fuller presented a $623 million budget for fiscal year 2026 (FY26) in her annual budget report to the Newton City Council on Tuesday night, warning of economic uncertainty for the city.
“Cold economic headwinds 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.”
According to Fuller, the budget is balanced in the face of large-scale economic uncertainty with prospective federal funding cuts, a recession, and volatility in the stock and bond markets.
“This budget I present tonight is responsible,” said Fuller. “This budget is balanced. This budget is almost exactly what we predicted it to be a year ago. This budget reflects a larger increase for [Newton Public Schools] than we told them to plan for.”
In the FY26 budget presentation, Fuller and Maureen Lemieux, chief financial officer for the City of Newton, projected a decrease of $5.5 million in revenue from interest on investments.
The FY26 Newton Public Schools (NPS) operating budget has a 3.65 percent increase from FY25, while pensions for nurses and crossing guards will see an 11.75 percent increase, according to Lemieux. In total, city funds spent on schools will increase by 4.39 percent from FY25.
“I wanted to make it fairly simple so that everybody could see that when we say that we prioritize NPS, we are prioritizing NPS,” said Lemieux. “I think it’s important that people are able to see it.”
Lemieux described how the NPS multi-year forecast for the city is unsustainable, though, as there would be a $4.5 million gap, also known as a budget shortfall, in next year’s budget and a $7.6 million gap in the following year’s budget. Lemieux also highlighted that when NPS Superintendent Anna Nolin submitted her proposed budget, she wasn’t aware of the $1.3 million increase in health insurance, contributing to a wider gap in future years’ budgets.
“The sad fact of the matter is that we can’t have 60 to 65 percent of our budget growing at these numbers when we have modest revenue increases,” said Lemieux. “So it’s a challenge that we’re all going to have to work through. I am not standing here telling you that I have any one of the answers for it. I’m just pointing out where our challenges are over these next several years.”
Lemieux explained how these challenges are heightened due to Newton’s lack of state funding, as 88 other municipal pension funds are funded more substantially.
“In actuality, there are 105 pension systems across the Commonwealth of Massachusetts,” said Lemieux. “We are 89th when it comes to being funded. Eighty-eight of the 105 municipal pension funds are better funded than we are, clearly. It’s a challenge for us as we move forward. Right now, we have gotten to the point where we at least are putting more money into the pension trust fund than we are taking out for many years.”
Lemieux stressed another element putting unrealistic strain on Newton’s budget: Newton’s Charles River phosphorus control regulations.
By June 2026, Newton is expected to pitch in $27.37 million to Charles River phosphorus management, which, with current projections, could amount to as much as $575 million by 2038.
“There is absolutely no way that we can ever meet those challenges,” said Lemieux.
Furthermore, economic instability and inflation are negatively impacting Newton’s flexibility in FY26. Therefore, Fuller said she wanted to be realistic with the budget in consideration of future years to come.
“This budget does less than we would like because inflation is outpacing the city’s growth in revenues,” said Fuller. “This budget avoids a financial crisis in the future by preserving the rainy day stabilization fund entirely responsibly, using the NPS education stabilization fund established, and appropriately using one-time funds, including free cash for one-time needs as much as possible.”
Last year, city officials forecasted the city would receive $12 million from interest on investments, but FY26’s forecast expects just $6.5 million in revenue due to heightened interest rates.
“I expect that by the end of this calendar year [interest rates] will be down further now with all of the chaos in the economy,” said Lemieux. “Over the past couple of months, for anyone who watches and reads what happens at the [Federal Reserve] meetings, they are not sure when they’re going to change interest rates, so if they’re not sure, we certainly can’t be sure.”
While the city is cautious of its future expenses, Fuller is confident that the FY26 budget benefits citizens and Newton’s finances alike.
“This budget balances the immediate needs of our students and residents while maintaining the city’s fiscal health for next year and beyond,” said Fuller.
Graphs by Genevieve Morrison / Heights Editor
You must be logged in to post a comment.