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Walsh, casino magnate now BFFs; sign $68-million deal

Mayor Walsh's office announced tonight that Boston has signed a "Surrounding Community Agreement" that includes $68 million worth of payments to the city over the next 15 years and an effort to spend at least $20 million a year with Boston businesses over the same period.

The agreement marks the end of the city's increasingly futile court challenges to the Wynn casino on a parcel in neighboring Everett.

Part of the deal includes $25 million in payments, over 10 years, set aside specifically for fixing the already existing traffic nightmare that is Sullivan Square. The agreement also calls for $11 million worth of traffic work in the rest of Charlestown. Another $31 million will be used for "community impact" over 15 years.

In addition, "Wynn Resorts has agreed to work with the City of Boston to explore moving the Boston Water and Sewer Commission's Materials Handling Facility with the goal of creating public open space along the waterfront in Charlestown."

In a statement, Walsh said:

Our efforts over the past two years have been to protect the people of Boston and ensure the neighborhood of Charlestown is treated fairly. Residents have been trying for years for a solution for traffic congestion in Sullivan Square and Rutherford Avenue, and we must work together to improve local transportation infrastructure. I offered to keep an open line of communication throughout this process and I thank Steve Wynn for coming back to the table to listen to Boston's needs.

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Mayor Marty gets 68 million without selling one acre of land owned by the city. The MBTA sells prime real estate and acres of land to Wynn casino's for 6 million dollars. Who got the better deal?

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According to yesterdays Herald someone from Andover gave a potential opponent $100. He's in big trouble.

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I'm glad you figured out how to fill that $50m budget gap at BPS so quickly.*

Nice work.

* if there is a budget gap. As noted by other posters previously, BPS mailed out a letter about budget cuts but Marty was on WBUR saying the BPS budget wasn't finalized yet. #leadership

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Having things continue as has been the political course for the last 40 years has worked really well. Hey, the next mayor can fix it so in the meantime just keep throwing money at the problem and talk about the future. You know there are plenty of suburban school districts that think they are getting screwed by the Chapter 70 funding formula. Welcome to their world of hard choices. Explain to me why your child deserves more school funding than some kid in Dedham or Granby?

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Yes, there's plenty to fix in the school budget, no question. I think the city is right to try to address those issues, and I hope that they do so in a thoughtful way.

I don't want to answer for Vaughn, but as a BPS parent hopefully I'm not too far out of place commenting here. You wrote:

Explain to me why your child deserves more school funding than some kid in Dedham or Granby?

I don't think my kids deserve more school funding than kids in Dedham or Granby. When I look at the weighted student funding formula that BPS uses, I see that the amount of money allocated to my kids' school based on their level of need is actually pretty modest, and that there are many, many children in BPS who are simply much more expensive for the district to educate. When you hear someone say that Boston spends ~$20,000 per student, it's not like that money is distributed evenly - it is distributed in a way that is supposed to accurately reflect the needs of the students in its schools.

Since you bring up the chapter 70 funding formula (which Vaughn didn't - I have no idea if he takes issue with chapter 70 funding levels or not), it does something similar. The foundation budget takes into account student need to try to determine a minimum acceptable level of funding for each district in the state. Boston has the very highest per-pupil foundation budget in the entire state. So, no, my kids don't deserve more than the kids in Dedham or Granby, but there are enough students in Boston with high needs that, yeah, there is a reason that on average students in Boston need more school funding. And if you believe the findings of the Foundation Budget Review Commission, the current formula may well be understating the level of funding that high needs students really require.

Since we're talking about Dedham and Granby, it turns out that Dedham overspends its foundation budget by a lot more than Boston, while Granby lags a little behind.

I'm really not trying to say that there is no waste in Boston Public Schools - the easiest critique of what I wrote above is that those last few links look at net school spending, not total school spending, and it's absolutely true that Boston puts too little of its total school spending into categories that count as net school spending. The mayor is correct to try to cut some of the system's costs, and I think he is putting some pieces in place to be able to do that in the long term.

The concern parents have right now is what's going to happen this year. The facilities plan isn't complete and the superintendent has said he doesn't want to close schools until they have the facilities plan in place to help guide that process. Meanwhile, the mayor is presenting a budget that is well short of what the school department says it needs to continue its current level of service, based in part on the McKinsey report's suggestion that there is excess capacity in the system. So BPS is now presented with a total budget figure that reflects some savings that the mayor would like to see, but which the school department says it is at least a year off from realizing. And, at least as of now, it's the schools that are getting caught in the middle.

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I brought up Chapter 70 because that is the foundation of any system budget. Dedham, like many districts, spends more than the foundation by virtue of added property tax supported by Dedham voters. Granby lacks the tax base to make that happen in the same fashion as Dedham. The formula favors cities and your point that Boston then devises its own internal formula to distribute Chapter 70 assets within its system is logical. So when Granby or some other town loses the arts or music they see it as a result of funding bias by the state.

Whatever the formula the BPS system like the city itself is at a crossroads. We can build new buildings attract new business and celebrate culture at the MFA but if the neighborhoods die because of the same lack of change in the BPS then we will continue to have two Boston's.

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I'm pretty sure we specifically can't celebrate culture at the MFA anymore. Google 'Kimonogate'

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J. Edgar Hoover wearing his kimono.

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I don't think the formula favors cities at all. Boston's chapter 70 funding situation gets worse literally every year as we trend down towards the minimum state contribution level (we only haven't reached that level yet because of the formula's "hold harmless" clause). Medium-sized cities with significantly less wealth are almost entirely dependent on state aid for their school budgets and end up in an even worse situation, as they struggle to even meet their required net school spending levels. Meanwhile, even the very wealthiest communities receive the minimum of 17.5% of their foundation budget as chapter 70 aid, then outspend their foundation budget significantly. If anything, I think it's those communities that the formula favors. See the blog post I linked to in my other comment for a little bit more information about this.

I'm sincerely interested in learning more about this, however, so if you can point me to articles or data that show that the formula favors cities I'd appreciate it.

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increase education spending through local taxation means that the Chapter 70 formula doesn't favor cities like Boston? The formula uses demographic and economic factors to generalize a funding level. I need to ask you the same question you've asked me. Show me where it doesn't favor urban systems? For the purpose of the formula calculation small suburban towns are lumped in with "wealthy" suburbs. Wealthy suburbs have the assets and appetite for override and therefore don't face the same deficits. Small towns with modest income face the decision to override or cut budget every year. You cannot honestly argue that the formula treats each system equally.

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Chris noted that Boston is very different than Lawrence, Springfield, etc... due to our world class tax base.

According to this - http://www.bostonpublicschools.org/cms/lib07/MA01906464/Centricity/Domai...

BPS only gets 9.6% of its revenues from state, federal sources and that's including non-Chapter 70 state sources. So let's just assume that say BPS gets 7% of its funding from Chapter 70 - is that really higher than your theoretical small town?

If you want to argue that poor cities get more resources, that's different.

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I'm not going to argue that the system is perfect, no. As I said in my other post, it was intended to be a progressive funding mechanism and in many ways fails to live up to that goal. The big thing here is that wealthy suburbs increase education spending via local funds and still get 17.5% of their foundation budget in chapter 70 aid, even if they don't really need it.

So no, I don't think it's quite right to say that small suburban towns - which legitimately depend on chapter 70 funding - are lumped in with wealthy suburbs. To oversimplify, the chapter 70 formula pretty much depends on two things: student need and community wealth. Assuming you could neatly classify every community as high or low needs and high or low wealth, there would be four possible groups:

  • High wealth/high needs - this is where Boston is, and there may be no other communities in the entire state in this category.
  • High wealth/low needs - these are the wealthy suburbs.
  • Low wealth/high needs - there are a bunch of these, including most cities other than Boston and the small towns like Granby
  • Low wealth/low needs - I doubt this exists.

There are three categories that towns actually fit into, and one of the categories contains only Boston. Note that in my categorization, small towns and wealthy suburbs are not lumped together. In terms of how the formula favors these communities, I'd say it goes roughly like this:

  1. High wealth/low needs - these communities have lots of spending power and a relatively low foundation budget. They get funded at 17.5% even though they probably don't really need that much funding.
  2. High wealth/high needs - Boston has really, really high education costs, and gets some funding from the state as a result, but not a lot more than wealthy towns that don't really need the funding as badly.
  3. Low wealth/high needs - these communities get a big portion of their foundation budget covered by state aid, but still find it hard to put together a robust school budget.

Of course, most places don't fit all that neatly into these categories. I suspect that the places that fare the absolute worst are the mid-sized cities that have very low wealth and very high needs. And, indeed, among the 28 districts that fund their school departments at <1% above foundation we see Attleboro, Chelsea, Fall River, Fitchburg, Leominster, Lowell, Lynn, Malden, New Bedford, Springfield, Taunton, and Worcester.

In any case, no, Boston is not the worst off but I still think it's the wealthy suburbs that do the best, and with Boston as the exception, it's cities that do among the worst.

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With per student spending higher than Boston and lots of wealth thanks to split property rates and promotion of tax base expansion over any other concerns.

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Yes, that's right. Cambridge absolutely belongs in that category, and their fairly astonishing net school spending (127% above foundation, vs. Boston's 22%) reflects their very high level of wealth.

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There are almost no school age kids - I think about 5% of the population compared to about 10% in Boston and close to 15% in most towns. So they can spend relatively little of their total budget on schools and look like they are drowning the schools in money on a per capita basis.

Note - the Chapter 70 stuff for Boston is a bit of a shell game. The city just throws every revenue source in a big pot and then figures out the budget. For about forever the school budget is 35% of what they collect. So if the school budget comes a $1 billion and they give us $100 million - the city kicks in $900 million. If they only give us $50 million - the city kicks in $950 million. Until 15-20 years ago, BPS was struggling with money. That has changed and then some - but they are still kicking and screaming if they don't get the traditional 3-4% bumps every year.

That's the way Menino did it for years. Walsh is taking on the dragon and saying - hey we have to do this another way. And for the record - Boston has split rates and promotes expansion over most other concerns as well - although to Marty's credit - he is starting to push for more mid-priced housing than Menino ever did.

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Is the foundation budget determined STRICTLY by the academic needs of the kids? I thought that in part it was determined by how much the district could afford as well - and then the state kicks in the amount above that. As needy as Boston may be, I was always of the impression that Lynn, New Bedford, Fall River, Springfield and other cities had more difficult academic situations than even Boston - yet if Boston's foundation is the highest, that would not be the case. It has been my impression that Boston has high needs in the schools, but is also a very affluent community as a whole - and that's as much a driver of our foundation budget as the needs of the kids.

True? Not?

Thanks as always Chris.

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This is an oversimplification, but:

The foundation budget takes into account need and cost of living (employees are paid more in Boston than in less expensive parts of the state). It's supposed to be a reflection of the city's costs, and doesn't take wealth into account.

The municipal wealth formula takes into account the ability of each city to convert its wealth into tax revenue, and uses that amount to determine how much the city can afford to spend on education.

Chapter 70 funding is determined by subtracting the result of the municipal wealth formula from the foundation budget, thereby taking both need and wealth into account. There are a couple of other factors setting the floor for chapter 70 aid, though: funding isn't supposed to go beneath 17.5% of the foundation budget, and generally is required to go up something like $20-$25 per student each year.

So, Boston has the highest per-pupil foundation budget without having the highest per-pupil chapter 70 aid. It's a true outlier in Massachusetts, as both the largest city by far and probably the only community that is both high needs and (very) high wealth.

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My point was that the BPS says there's a large shortfall but Walsh on the radio was talking as if that wasn't a known fact. Totally to do with inter-Boston budget/contract/tax issues, nothing to do with Granby or Dedham.

BTW, my kid goes to a charter school so obviously I'm trying to destroy both the public sector unions of BPS as well as deny BPS students heat, water* and food.

* oh wait, a lot BPS buildings have water coolers instead of water fountains due to fears of lead in the pipes or more likely, some sweet water bottle vendor arrangement that Menino/Johnson signed off on.

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Chapter 70 funding as a base. So it has everything to do with its budget. Suburban districts see the funding pie getting smaller but urban districts getting bigger and bigger slices. The BPS has been an educational Flint for 40 years and this bandaid approach to system management has stifled needed change. The reason we have charter schools is that parents have given up on the system. I don't expect you to sacrifice your child's future charging a windmill. But that too is a huge problem. Parents that are involved and care deeply, the very people we need to make things work, realize its a futile mess. Walsh, at least, appears to want to spend political capital to change the BPS game. Its about time.

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Most of the BPS budget is actually dependent on city funding, not chapter 70. In FY15, Boston was receiving about 27% of its foundation budget as chapter 70 aid, down from its peak of 38.2% in FY01. These declines mostly began in 2007 when a set of reforms made chapter 70 funding take municipal wealth into account to a greater extent. We can expect chapter 70 aid to continue to decline as a percentage of our foundation budget until it reaches the 17.5% floor, as well - the only thing keeping our aid level above the floor is that the chapter 70 regulations require that total per-pupil funding go up by a small amount each year, but that increase is far smaller than the yearly increases that we see in the foundation budget.

Statewide, chapter 70 funding is paid out at 44.6% of the state's total foundation budget, so Boston is well below the state average in that regard, and going back to FY93, Boston has never once been above the state average. We got fairly close to the average around 15 years ago, but we've been getting further away since then. But Boston doesn't even get the worst of it - it's actually the medium-sized cities that have both high needs student populations and little wealth that are getting the worst of it. Scroll down to Massachusetts here and you'll see what I mean. It's not urban districts that are doing the best with chapter 70 funding relative to their needs - they're generally doing worse than average. The author concludes:

The progressive funding behind the Massachusetts “miracle” is a thing of the past.

by which he means that our supposedly progressive state aid formula actually does a relatively poor job of making sure that high-needs urban districts are getting the "bigger and bigger slices" that they should. And yes, Boston is somewhat of an exception to this rule, but as the author notes:

which, by no means, is to suggest that Boston has received adequate support given its needs, but rather, that Boston has been provided relatively more adequate support than some similarly high poverty districts

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Place needs a T connection at Assembly - footbridge over the river. Running shuttles from Sullivan is just stupid.

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Wouldn't even need to build a new bridge. There's the existing Mystic River dam. Would just need a new connection across the Eastern Route tracks and an easy entrance to Assembly.

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Already been discussed. Peds won't be allowed on the Dam. Wynn wants to go the bridge route, but Somerville may not let them. next battle?

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Wynn proposed the footbridge to Assembly Square.

https://www.bostonglobe.com/metro/2015/11/12/wynn-resorts-footbridge-spa...

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Same article

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I toured the site last Friday. One of the areas on the water is designated for a shuttle dock, that will be near to the facility entrances on the Mystic River side.

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.

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Boston needs money, ???,!!!,PROFIT! All jokes aside, the money seems to be going to the right places.

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Although, it will be interesting to see how much the traffic penalty is really worth when the time comes...

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How much could have Boston netted had the city worked with Wynn from the get-go instead of foolishly counting on East Boston & Revere and when that failed trying to strong arm their way with Wynn?

No one will ever know but it's hard to see how Boston came out ahead taking the path they did.

Unrelated: Are these figures fixed or are they based on "best case" projections from the Casino based on revenue? So far the actual earnings from regional casinos have been nowhere near what was initially forecast.

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Did Wynn initially offer more? I just cant see them giving away money without some fight...

And to your unrelated: I think the figures are fixed to the city while the state's cut is based on a percentage of revenue. It sounds like Boston will get it's pound of flesh as long as casino stays solvent. Although, the devil is always in the details...

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Walsh refused to meet with Wynn for talks regarding neighboring communities -- talks which ended up netting other towns better deals than they were looking at with Revere. Marty insisted that Boston be considered a host community for Wynn and bet the farm the state would rule as such. That didn't happen. At this point Boston was coming from a pretty weak position and they decided to try to fight it in court and lost every time.

As other commenters have noted, Wynn seems like he got the better half of the deal. Has the contact even been released?

The whole Casino thing is a lesson in what happens when local politicians try to game the system and lose. Boston's mayors figured an East Boston casino would be a sure thing and with a tunnel separating it from the "real" city they would make cash without the downsides. East Boston told the arrogant bastards to punt and suddenly they found themselves a victim of a system they designed.

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Marty's hands were tied, although he probably should have recognized that earlier. The casino law was terribly flawed in that it gave no say at all to neighboring communities a stone’s throw from casino sites as to whether or not a casino could be located on their border. In the case of Everett, this includes Boston (Charlestown), Medford, and Somerville. Only after siting had been decided could they negotiate for mitigation funds. This does not exactly put them in a position with any power. It’s a ridiculous way to handle it in area like this that is so compact and congested that a casino is likely to have a big or bigger impact on bordering communities than on the host community.

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Make no mistake -- the Casino bill was made with the sole intention of giving East Boston (Suffolk Downs) a Casino. Boston didn't want places like Everett, Milton, etc to have a say in their casino so the bill was drafted such that neighboring communities had beg and be happy with what they were given. Also note that according to the Casino bill only Boston would be split in terms of approving the Casino -- the idea being that the busybodies in Back Bay couldn't stop the Casino from being steamrolled into East Boston.

But then, Surprise! East Boston didn't play along. All of a sudden Boston found itself powerless -- a situation entirely their own making.

Screw Marty and the dipshits who crafted the Casino bill. Boston and their legislative cronies got greedy and it came back to bite them bad.

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And guess who voted for this ridiculous law when he was a state rep from Dorchester? That's right -- Marty Walsh.

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Unrelated: Are these figures fixed or are they based on "best case" projections from the Casino based on revenue? So far the actual earnings from regional casinos have been nowhere near what was initially forecast.

This being Massachusetts, I'd worry about the problem going in the other direction: Mahhty gets his full $68M from the casinos, but by the time the traffic project is planned, designed, bid, and slated to be built, they realize it'll cost $500M -and take 10 years - and all the $68M ends up buying us is a new traffic light and some crosswalk paint.

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What Walsh gave up for the extra $400,000 a year he got out of Wynn for settling:

In one key concession, the city agreed to eliminate a provision in the state-imposed compensation package that would have penalized Wynn for as much as $20 million should traffic to the site exceed certain levels. Instead, the agreement requires Wynn to address excess traffic, if it occurs, with a specified list of improvements, such as re-calibrating traffic signals.

Thats a great deal for Wynn, and he would only be doing it if he knew that traffic will exceed those levels. Instead of $20 million, its redoing some traffic signals.
http://www.bostonglobe.com/metro/2016/01/27/city-boston-ends-its-long-op...

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Boston isn't succeeding in court on this...so Steve hands the city $68 million? Wouldn't the answer be GFY in that scenario?

Hey Marty, don't get mad at Steve Wynn, get mad at your idiot constituents in East Boston who were too stupid to master basic geography who handed the casino to a neighboring city, and get mad at a state that does this city no favors and conceived the asinine idea that they and only they could determine the finite number of casinos that adults in Massachusetts could have.

The one-armed bandits are already (expletive) their pants down 495. Let's see what the city's appetite is in 2030 when this is built.

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SOON!

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Plainridge will probably fizzle about five minutes after Wynn opens up, if not before. I've heard Plainridge is about as interesting as your average corner Keno parlor.

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You're forgetting that our corrupt supreme leader Deleo made sure that his actual constituents, Suffolk Downs, are indirectly hooked up to any and all casino profits via the Race Horse Development Fund.

https://www.bostonglobe.com/metro/2015/06/10/millions-casino-revenue-ear...

Plainridge has harness racing so along with Suffolk Downs are pretty much the only place which would currently get all this money piling up, even before Wynn opens.

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Wynn got shook down for $68M and nobody is going to jail for that?

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and it's illegal. Call it mitigation, and everyone's happy.

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