HADLEY — In a decisive vote Monday, Hadley voters rejected a $2.25 million Proposition 2½ tax-cap override to cover town and school services and rising health insurance costs.

The override was defeated by an 1,173-666 margin, meaning those voting no represented more than 64% of those casting ballots.

A smaller $300,000 override to pay for capital expenses was also defeated, 1,154 to 684.

The 1,847 voters represented about 46% of the town’s 4,000 registered voters, according to Town Clerk Jessica Spanknebel.

The margin of defeat for the main override was even larger than at a special Town Meeting on Sept. 9, when 58% of voters voted it down, 344 to 250. The capital override lost that evening, 278 to 229.

With the override twice being rejected, the Select Board and Finance Committee on Wednesday, at a joint meeting beginning at 6 p.m., will be presented with a plan for where reductions can be made, developed by Interim Town Administrator Michael Mason and Finance Director Linda Sanderson.

The final plan, approved by the Select Board and reviewed and recommended by the Finance Committee, will then be presented to voters at a special Town Meeting set for Oct. 23.

Officials had sought the override to cover $579,435 in spending for the Fire Department and EMS, and $824,404 for various other increases, broken down as $338,404 for town and school operations and $486,000 for midyear health insurance adjustments. Another $846,785 was needed to pay for a previous health insurance adjustment, employee compensation and free cash used to cover other budget expenses.

While annual Town Meeting in May approved a $22.76 million spending plan, that has to be adjusted, due to both rising health insurance costs and expenses that the town doesn’t have the money for, including the around-the-clock Fire Department. Hopes at that time for additional revenue from local options meals and hotel taxes, which depended on the state Legislature, didn’t come through.

The draft agenda for Wednesday’s meeting has a discussion of town services for possible cutbacks, another discussion of physical assets, such as buildings and equipment, that could be privatized or liquidated and voluntary furloughs.

The specific layoffs could also be determined, with Mason previously explaining that 40 to 50 positions, or about half of the town’s 88-member workforce, could be at risk. Four of the current eight full-time firefighters may be out of jobs, with other positions in town and schools also likely to be eliminated due to the funding shortfall.

The vote, with polls open for 11 hours Monday at the Hadley Senior Center, was read out by election worker Stanley Kostek. A handful of onlookers, including Select Board members Jane Nevinsmith and David J. Fill II, were on hand. There was no immediate reaction from those present, though Fill said he anticipated a long evening Wednesday.

Throughout the day, both supporters and opponents of the measures held signs at the building entrance off Middle Street, waving to and interacting with residents.

Scott Merzbach is a reporter covering local government and school news in Amherst and Hadley, as well as Hatfield, Leverett, Pelham and Shutesbury. He can be reached at smerzbach@gazettenet.com or 413-585-5253.