The “carryforward” item within the Newton Public Schools (NPS) budget — the amount of cash unspent by NPS in the current year, which is then assumed to be expended in the next year’s budget — is a consistent source of confusion, taking much airtime during public budget meetings. NPS continues to have difficulty in describing it transparently to the community. Although a school district like NPS is generally not permitted to retain unspent cash at the end of a fiscal year (it is remitted back to the City), there is a special exception for funds received from the state’s “circuit breaker” cash reimbursement for special education expenses. A portion of these funds is retained by the district as a carryforward item.
Received annually from the state, the “circuit breaker” amount varies depending on (i) NPS’ out-of-district tuition and transportation expenses and (ii) the reimbursement ratios offered by the state in any given year. It’s remitted to NPS in the academic year following those expenses being incurred. Due to this delayed reimbursement, school districts may hold this circuit breaker cash from one year to the next. According to the FY 2027 NPS budget book, the intent of this flexibility is for districts to build a cash reserve to buffer against rising costs of special education in the middle of a school year.
However, according to statements by officials at School Committee meetings, several years ago NPS began utilizing this ability to retain circuit breaker cash from one year to the next for the purpose of supplementing its general budget. During this spring’s budget meetings, Superintendent Anna Nolin has described this supplementing as “not a good practice.” Notably, the current NPS budget materials indicate that NPS does not know today how much carryforward cash it will be expected to reserve in FY 2027 for the following FY 2028.
This “mid-year surprise” dynamic is influenced by the actual expenses NPS incurs as the school year unfolds — which informs estimates of the following year’s needed funds — resulting in events like the February 2026 NPS spending freeze implemented to save $2.5 million across the system. This $2.5 million amount — not contained in last spring’s FY 2026 budget “Uses” — shows up in the “Sources” column of the draft NPS FY 2027 budget, on top of the City’s indicated allocation of $314.5 million. (The $3.35 million carryforward figure in this article’s illustration refers to the amount saved in FY 2025, which funded the FY 2026 budget.)
Adding to the opacity of the carryforward is that while it is frequently listed in “Sources” of funding, since it is applied generally across NPS expenses, there are no clear “Uses” stated. Pages 15 and 16 of this year’s NPS budget presentation list the carryforward for FY 2026 as a “Non-City [allocation] Funding Source,” along with items like student fees and grants, which together fill the gap between NPS’s $297 million funding from the City for FY 2026 to what NPS says is FY 2026’s $318 million “full cost of operations.” One must reach page 56 of this spring’s 325-page NPS Budget Book to locate these non-City funding sources described in detail, which are anticipated to be $23.2 million for FY 2027.
These non-City sources — labeled “offsets” — will fund expenses in addition to the $317.3 million FY 2027 NPS “Bridge to Thrive” figure that dominates this spring’s NPS budget materials. While some of the non-City cash is expended on clearly corresponding Uses such as student athletics or specific grant mandates, the Uses for the carryforward are non-specific. Therefore, NPS — absent additional funding — cannot correct this practice in a given year without creating a general deficit across the budget.
The amorphism of the carryforward — both as a concept and as a specific FY 2027 required Use of cash — make it challenging to remedy, despite near-unanimous statements by the Superintendent and School Committee that it causes distress to the system. Potential fixes that have been proposed include a one-time City allocation or a revolving loan from the Educational Stabilization Fund (ESF) to be repaid by the circuit breaker receipt in the final planned year (2029) of the ESF. While they are not panaceas — since ultimately the amount of circuit breaker cash received from the state is unknown year-to-year — a close-enough funding solution may prevent the mid-year spending freezes required to generate the carryforward for the following year.
The carryforward is difficult to explain verbally during NPS presentations, and the amount needed for next year is unknown during this spring’s budget season, when City government allocates and approves municipal funding. A viable solution would require political and communication skills to convince City Hall and the City Council – and by extension voters – to allocate funding without certainty regarding what items those funds would be spent on. But advocating to “Fully Fund NPS Financial Management!” may be more difficult than advocating for funding more visible, student-facing budgetary line-items. Newton residents monitoring NPS budget discussions will likely continue to hear about the carryforward and its negative effects in the coming years.
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