EASTHAMPTON — Mayor Salem Derby has proposed two budgets to the City Council for consideration: an approximately $65.3 million spending plan that assumes voters approve a $6.9 million Proposition 2½ override, and a $62 million budget that would take effect if the override fails and mean the loss of approximately 40 municipal full-time positions, many of which are in the school system.
“I’m submitting two distinct budgets to the council,” Derby said at the May 6 City Council meeting. “Both are balanced, both are difficult, only one (the smaller budget) is fundable without the passage of a $6.9 million override.”
Derby said the proposals, his first budgets as mayor, will also be his most “consequential.” The City Council must approve a final spending plan, and the mayor said either the larger or smaller budget will take effect depending on the outcome of the June 9 override vote.
Now, the City Council’s Finance Subcommittee will hold four budget hearings, each focused on different city departments. The hearings begin next week, with Community Preservation Act revenue and general government scheduled for May 13, followed by public safety — including fire and police — human services, and the “unclassified” section on May 14; education, debt and interest on May 27; and public works, enterprise, culture and recreation on May 28. Councilors can only reduce budget categories, not increase them.
The Finance Committee’s final budget hearing will be on June 1 and the full City Council plans to finalize the budget at its June 17 meeting, after the special election and before the end of the fiscal year on June 30.
“We’re going to try and make this as participatory and inclusive as we possibly can, while keeping everything on the tracks,” said Councilor Thomas Peake, who chairs the subcommittee.
“We have had multiple meetings, multiple negotiations with department heads, trying to come up with creative ways to minimize the impacts to city services and trying to find ways to be equitable across different positions to save services and staff,” Derby said.
Override vs. no override
The proposed budget if the override fails is less than a $100,000 increase from the current year’s budget, while the proposed budget with an override is about a $3.4 million increase from the current year.
Derby told the Gazette that if the override fails, the city would eliminate about 40 full-time positions, some currently vacant, and make significant service cuts. Most of the reductions would come from the school system because, Derby said, that’s the largest department in the city.
The budget proposal shows that for fiscal year 2022, there were roughly 375 full-time employees citywide — a number that grew to roughly 436 employees in the current year.
While some department’s budgets would increase if the override passes, Derby said that does not mean level services will be maintained. If an override passes, he said personnel would be largely unaffected, but there would still be certain reductions in resources and other items.
“At first glance, it appears essentially flat to the FY2026 budget,” the proposal states about the budget without an override. “But holding spending flat against rising fixed costs, health insurance, contractual wages, special education and debt service forces deep service reductions.”
If the override fails, the city would use $2.5 million from the General Stabilization Fund and $186,000 from the Tax Rate Stabilization Fund in an attempt to balance services. “That is not a sustainable path,” the proposal states.
City officials said they proposed the $6.9 million override with guidance from the state Department of Revenue’s Division of Local Services to address a projected $6.5 million general fund deficit. Derby said the override would not fully close the gap because the city must also cover current expenses. To maintain existing services and eliminate the full deficit, he said, the city would need an $8.5 million override.
Departments
Should the override fail, the school budget would decrease to $22.2 million from the current $22.8 million. That amount is roughly $3 million below projected level services next year. If the override passes, the schools would get about $24 million, which is still below level services and would require cuts.
The school’s personnel budget category — employee costs — for the current year is approximately $16.2 million. If the override fails, that budget category would be $14.5 million, a $1.7 million difference.
Public safety, including fire and police, would see a budget of about $8.4 million with no override, a $600,000 decrease from its current budget of $9 million. With an override, the budget would increase to roughly $9.2 million.
General government would decrease from a current budget of approximately $3.5 million to $3.2 million without an override. With an override, it’s budget would still decrease from the current year’s budget by roughly $70,000.
Along with general government, the only other department that would see a decrease in funding even if the override passes is human services. Without an override, human services would funding would drop from approximately $860,000 to $730,000. With an override, the budget would be roughly $788,000.
Public Works’ budget would be approximately $2.3 million without an override, a roughly $110,000 decrease from its current budget of $2.4 million. With an override, the budget would be roughly $2.5 million, an increase of roughly $80,000.
The “Unclassified” section of the budget includes health insurance and other contractual obligations for employees, which city officials say generally cannot be decreased. It would increase from approximately $12.7 million to $14.4 million without an override, and its budget would increase $70,000 if the override passes.
