The School Committee’s vote Monday night, Nov. 27, requesting $16.2 million to operate Harvard’s schools in fiscal 2025, did nothing to improve the town’s financial outlook, in spite of last-minute cuts to personnel and expenses. (See story)
Without a fresh infusion of revenue, town financial planners must find a way to cut nearly $1.5 million from next year’s budget, a projected deficit that is the largest in anyone’s memory, Select Board Chair Rich Maiore said in a phone interview Tuesday.
The budget model that accompanies this story offers a simple explanation (see table). The spending requests submitted by town departments and schools for fiscal year 2025 are 7% higher, while net revenues are projected to grow only 1.9%. When municipal expenses outpace revenues, the result is a “structural deficit,” to use the terminology of municipal finance experts.
Last March, shortly before Town Meeting, the town’s financial planners trimmed nearly $700,000 from this fiscal year’s budget, aided by a last-minute addition of $200,000 in state revenue granted by the Legislature. This year’s projected deficit, however, is twice that amount.
Alarmed by the outlook, the chairs of the Select Board and Finance Committee convened a meeting of key budget players Nov. 20 to review the numbers and discuss options. The meeting was not public, but according to attendees interviewed by the Press, there was agreement among those present that a tax override—an increase in property taxes beyond the 2½% routinely allowed by state law—will likely be necessary.
At the meeting, according to Maiore, Town Administrator Tim Bragan presented options, such as a tiered override that would give Town Meeting greater say in how the extra money is spent. But no number was set.
Attendees also reportedly discussed a formula offered by Finance Director Jared Mullane for allocating available revenue between the town departments and the schools. According to his analysis, if one excludes principal and interest payments on town debt as well as municipal employee benefits, then the split in spending between town and schools this fiscal year is approximately 34.1% town and 65.9% schools.
If that formula is used to allocate the $23.2 million available next year once debt and benefits are subtracted, then town departments—Town Hall, fire, police, and so on—could expect a total allotment of $7.9 million and the schools $15.3 million. These amounts are substantially lower than the amounts the town and schools have requested in their fiscal 2025 budgets, as shown in the table below, and the difference will have to be eliminated either through budget cuts or with additional money provided by an override or some other revenue source.
At least one important source of money is yet to be determined: state aid. Mullane has forecast that it will remain flat, but the true number won’t be known until Gov. Maura Healey presents her fiscal 2025 budget to the Legislature in January.
Present at the Nov. 20 meeting were Bragan, Assistant Town Administrator Marie Sobalvarro, and Mullane as well as Maiore and Don Ludwig of the Select Board; Eric Ward and Jennifer Finch of the Finance Committee; Abby Besse and Suzie Allen of the School Committee; and Superintendent Linda Dwight and Assistant Superintendent Ingrid Nilsson.
“Nobody walked out with high fives,” Maiore told the Press. “But we certainly understood the gravity … of the challenge, and if we were going to go in front of the town for an override, we were all going to have to lock arms and be OK with that.”
Traditionally, an all-boards meeting is convened this time of year to review the forecast for the coming year and to strategize next steps. As of Wednesday, Nov. 29, no date for that meeting had been set.
