SOUTH HADLEY — Facing a projected $3.5 million deficit for fiscal year 2027, the South Hadley Budget Task Force is exploring options for a Proposition 2½ override — ranging from $3 million to $9 million — to mitigate substantial department cuts.
The 12-person committee is tasked with researching the town’s finances and drafting short-, medium- and long-term solutions to address the deficit. A report of the committee’s findings will be presented to the Select Board on Feb. 9.
During the Budget Task Force meeting on Jan. 15, Town Administrator Lisa Wong presented the group with three override scenarios and the impact of spreading the overrides across one, three, and five years. The numbers presented show the structural deficit will persist even with the overrides, but the infusion of tax dollars can limit potential cuts while the town implements longer-term solutions, she said.
“As I go around the community, I don’t think people understand the magnitude of the problem the town is facing,”
Emily Young, Budget Task Force member
While the Budget Task Force has yet to decide on an override amount and schedule, Wong recommends increasing the tax levy by no more than $3 million a year. She suggests either a $3 million override raised in one year, a $6 million override spread out over three years or a $9 million override across five years.
Under Wong’s recommendations, a $3 million override would cost the average homeowner $480 more a year in taxes. With a $6 million override, the average homeowner should expect their property tax bill to rise $324 a year for the next three years. An increase in property taxes under the $9 million override would begin with a $396 increase the first year, followed by a $336 increase in the second, third and fourth years and a $96 increase the fifth year. The average home costs $417,100 in fiscal year 2026.
Residents can weigh in on the budget decisions by taking the budget survey or attending the hybrid listening session at 7 p.m. on Thursday night at the Senior Center.
Planning for a deficit
Currently, Wong and South Hadley Public Schools Superintendent Jennifer Voyik are preparing two different budgets for fiscal year 2027, which begins July 1.
“If we offer [a $3 million, $6 million, or $9 million override], and one of them passes, here’s what our budgets would likely look like,” Wong said. “So we’re already doing those projections now.”
One is a level-service budget of $67.6 million that would have little to no impact on town departments.
The second budget is pegged at $64.6 million. This budget scenario makes several sweeping cuts, including the closure of Gaylord Memorial Library, the loss of interlibrary loans through the South Hadley Public Library, the closure of Town Hall on Fridays, the closure of town spray parks, three police officer positions and two Department of Public Works positions.
Meanwhile, the school department’s proposed $26 million budget, included in the town’s overall budget, is short of the $27.5 million needed for a level-service budget. To close this $1.5 million gap, a balanced budget would require laying off 20 student-facing positions and three administrative positions, along with fewer transportation options, reductions to electives, and cuts to sports and extracurricular activities. Cutting teaching positions also increases class sizes and leaves fewer open seats for school choice, officials said.
“To reduce the school budget, you do run the risk of school choice getting worse.” said Nicholas Gingras, co-chair of the Budget Task Force. “You got to think about the school budget differently because there is a significant compounding risk related to school choice.”
One of the biggest drivers of the deficit is health insurance benefits, which increased roughly $2 million in fiscal year 2026. Next year, Wong predicts a $1.7 million increase in health insurance. Budget Task Force member John McCarthy points out that retirees remain on the town’s health insurance.
As expenses continue to rise exponentially faster than town revenue, Wong and the task force project a $1 million deficit in fiscal year 2029, a $2.5 million deficit in fiscal year 2030 and a $4.6 million deficit in fiscal year 2031.
“As I go around the community, I don’t think people understand the magnitude of the problem the town is facing,” Budget Task Force member Emily Young said.
Softening the blow
The town continues to find new savings, generate some revenue and research new ways to fund services. According to a Select Board presentation from Jan. 20, local fees will bring in an additional $400,000 for fiscal year 2027 and an insurance opt-out program may lower the number of members the town covers. Other options, like a volunteer payment in lieu of taxes, or a PILOT agreement, and new health care plan design, are still in exploratory stages.
However, the budget task force is investigating an override as an immediate mitigation strategy to the budget deficit.
The $3 million override would limit cuts in fiscal years 2029 and 2030. Wong explains that roughly $1.6 million of the override would be used for fiscal year 2027, and the remaining money would go into a stabilization fund with other revenues to accrue interest. The goal is to create a cushion for fiscal year 2029 and 2030 before the financial cliff returns in fiscal year 2031.
A $6 million override would limit cuts from fiscal year 2027 to fiscal year 2029, but still leave a gap of $3.4 million by fiscal year 2031. Only a $9 million override could slow the bleeding for all five years.
“To sell the override to the town, you need a campaign. It has to be a strong marketing campaign at the grassroots level,” South Hadley resident Robert Murphy told the Budget Task Force. “They need to know that this is a long-term plan.”