SOUTH HADLEY — A projected $3 million budget deficit for fiscal year 2027 is forcing the town to consider severe cuts to staff and facilities, including reductions of 19 municipal and 23 school positions, as well as the closure of Gaylord Memorial Library.
“I don’t even know if we would have a school district at that point because cutting everything I just put up there for FY27 leaves us with huge class sizes and not enough staff to educate students,” Superintendent Jennifer Voyik said at a Sept 2 Select Board meeting.
Two weeks ago, Town Administrator Lisa Wong announced to her staff that skyrocketing health insurance costs and stagnate revenue have put South Hadley into “deficit mode.” Health insurance with the Hampshire County Group Insurance Trust rose 40% in fiscal year 2026, or by $2 million. Wong predicts that insurance rates will rise another 15% in the upcoming budget year, and continue to rise in the coming fiscal years.
“Doing everything I said before…those amount to about $1.3 million. I have a $4.5 million level service ask.
Lisa Wong, Town Administrator
“Between fiscal year 2025 and 2027, we’re talking about a $3.5 million increase just in health insurance,” Wong told the Select Board.
On Sept. 2, Wong and Voyik put forth a preliminary proposed budget to prepare municipal leadership and town residents for any sharp reduction in services. These numbers could go up or down, depending on potential changes to state aid or changes in state and federal grant funding.
Other ideas under consideration include deeper cuts to the schools, such as elimination of all extracurricular and sports programs, reduction of elective courses and reduced transportation options.
Additionally, the Town Hall and the Senior Center may be forced to reduce hours under this preliminary budget proposal.
“There will be structural deficits moving forward, especially if we are looking at expenses increasing more than revenues,” Wong said. “If they are kind of the same, you can deal with it, but the bigger costs go up, the more revenue goes down, that creates these deficits.”
Wong said that early estimates for next year’s level-service budget show a $4.5 million increase in expenses and a $1.5 million increase in revenue, leaving a $3 million gap. The school department budget, meanwhile, is expected to decrease next year, from $25.8 million in the current year to $25.5 million in fiscal year 2027.
To close the $3 million gap, Wong said the town may dip into reserves and stabilization funds, explore options for new growth, fight for state and federal grants, reevaluate health insurance plans and even propose a Proposition 2½ override in spring.
Even then, cuts will likely still happen.
““Doing everything I said before, using reserves, tackling health insurance, increasing fees, creating new fees, fighting to keep state and federal aid, tackling unfunded mandates, not funding capital projects, and using stabilization funds, those amount to about $1.3 million. I have a $4.5 million level-service ask,” Wong said.
