By Joseph A. Curtatone

(The opinions and views expressed in the commentaries of The Somerville News belong solely to the authors of those commentaries and do not reflect the views or opinions of The Somerville News, its staff or publishers.)

In many Republican circles, it’s an article of faith that government polices, programs and investments only get in the way of prosperity (what conservatives call ‚Äúwealth creation‚Äù), and that public sector managers don’t do anything important.  Here’s a case in point: shortly before the wheels came off his presidential campaign, Mitt Romney started emphasizing that he (unlike, say, Hillary Clinton or John McCain) had spent his career in the ‚Äúreal economy,‚Äù and that his business expertise was just what the nation needed as it teetered on the brink of recession.

Romney’s campaign is now history, but this strange belief in the uselessness of government remains a basic part of conservative doctrine.  The notion that government performs an essential job supporting the ‚Äúreal economy‚Äù – and that wise investments in public services and infrastructure are critical to economic growth – is simply unacceptable to many conservatives.

But our city’s fiscal policies have just received two new endorsements that come to us straight out of the ‚Äúreal economy‚Äù – and it’s worth taking a minute to understand what those endorsements are, and what they mean for the residents of Somerville.

The first endorsement comes from the state’s real estate markets, and it tells us something about how cities can get ahead and stay ahead, even in challenging economic times.  Banker and Tradesman recently reported on the change in property values in eastern Massachusetts, and the story was picked up by a number of TV stations and local publications. One of those papers was the Boston Herald, which wrote that, ‚ÄúWhile towns and cities across the state suffer through a severe slump, a group of communities that includes upscale suburbs like Lincoln and Weston appears to be in an alternate real estate universe. . . Still, pockets of rising real estate prices can be found outside the most affluent locales as well. Communities that saw price increases last year include Somerville, Watertown, West Roxbury and Danvers.‚Äù

It isn’t often that you see Somerville on the same list with communities such as Weston, Lincoln and Sudbury.  But in a year when real estate prices dropped an average of 8.4 percent across the state, the fact that our single-family, condo and three-family home prices are on the rise (and our two-family sales prices are down only slightly), Somerville real estate is still a very solid investment.  Look at it this way: Medford’s overall residential property values declined 4.31 percent last year; Cambridge’s went down by 2.45 percent; Everett’s by over 16 percent (ouch); and Somerville’s by only 0.39 percent.  That’s a terrific score in a weak market.   

The other endorsement is even more exciting, because it is going to save the city’s taxpayers hundreds of thousands of dollars in interest charges on our capital debt.

This week, Moody’s Investors Service raised the City of Somerville’s bond rating to Aa3 from A1.  Cities like ours don’t often get a bond rating upgrade unless they make a formal request for one, and even more rarely when the regional real estate market is weak and prospects for state aid are uncertain. But none of that mattered this time: Somerville has won an unexpected and very valuable vote of confidence from the financial industry, and it couldn’t come at a better time for Somerville taxpayers.

The benefits of these developments are immediate and powerful. Because our property values are holding up, our property tax receipts remain solid. Other communities are facing huge cuts, major tax increases – or both – at the very time when their residents have less wealth because their property values declined.  Somerville is going to have another very tight budget year, but we won’t confront the pressures faced by communities where property values have dropped.

Because our bond rating has moved up, any money we borrow to fund our capital agenda (including whatever may ultimately be necessary for the rebuilding of the East Somerville Community School) will cost significantly less.

Now there are a lot of reasons why Somerville is doing so well in the ‚Äúreal economy‚Äù and many of them have nothing to do with government. We’re close to Boston; we’re at the center of the Tufts-Harvard-MIT triangle; our small business community is dynamic and productive; our median income is up and our city is getting younger.

But some of the most important reasons for our endorsements by the financial and real estate markets relate directly to the way we have run city government and invested city dollars. One of the best ways to keep up property values is to improve local schools, repave streets, and improve the city’s quality of life with better city services, parks and environmental policies. One of the best ways to improve creditworthiness is to invest in maintenance and infrastructure while improving financial efficiency and setting aside part of your revenue stream to meet future capital needs (which is what we did when we created the first Capital Stabilization Fund in the city’s history).

This is the same message that Governor Patrick is trying to convey at the state level: even in a time of fiscal austerity, you’ve got to make prudent investments in public assets and public programs if you want the ‚Äúreal economy‚Äù to grow. Our Board of Aldermen understands this reality, and should be applauded for it. Clearly, Mitt Romney never did.