Friday, July 12, 2024

One topic that has not received much attention this election cycle is the city’s finances – one of the city’s strengths and one that should not be overlooked or taken for granted.

Cambridge has long benefited from robust commercial and industrial development that has allowed us to keep our residential tax rate low to fuel growth and add services for residents. Compared with other municipalities, Cambridge is in a very strong fiscal position, with about $190 million in free cash and a AAA bond rating that makes us the envy of many other communities. But we cannot be complacent. 

Cambridge is not immune from broader economic trends. The pandemic altered the way office space is being used and vacancy rates are creeping up, layoffs have occurred in the life-sciences biopharma industry, and interest rates are higher and might remain so for a couple of years, dampening development. It is essential that the City Council understands and anticipates how these factors may affect our businesses and development. A softening of the commercial and industrial tax base will have material budgetary impacts. 

In his most recent tax letter, the city manager cautioned the council that “it will be increasingly important to recognize the relationship between the annual budget and the associated impact on property tax bills, particularly regarding goal setting, prioritization and the appropriate level of budget growth.”

Cambridge needs financial expertise and problem-solvers on the council now to meet these challenges. With 13 years of municipal finance experience at Standard & Poor’s and another 20 years in planning, I know how important it is for Cambridge to maintain its strong financial position if it is to keep its AAA rating. It is up to the council to be cognizant of the economic environment as we set our spending priorities and to apply some basic financial discipline to our decision-making if we want to remain fiscally strong and stable. 

It is vital that the council address financial questions explicitly in any policy or program discussion, evaluating direct project costs and broader financial impacts on the operating budget. From my observation, it is rare that these questions are asked. The council should require staff to do an upfront assessment of the impact of our policies and programs on the budget and our taxes. None of this should be an afterthought.

If elected, I will apply my skills to ensure the council has clear goals set for its policies and programs, have staff develop performance indicators to ensure we are meeting those goals and evaluate the financial impact of policies and programs before they are adopted or implemented. 

The city needs a council that is focused on how spending impacts our budget and tax rate. We need to elect a council that is staying aware of the economic environment and adopting basic fiscal tools as part of our standard operating procedures, which will go a long way to maintaining our strong financial position. I look forward to bringing my financial acumen to the council if elected.

Joan Pickett, candidate for Cambridge City Council