HADLEY — An almost $1.5 million gap between estimated revenues and projected expenditures for fiscal year 2027, beginning July 1, could lead to up to 11 layoffs or staff reductions on the town side, as well as additional cuts at the public schools, according to the town’s finance team.
In an overview of the budget plans for the next fiscal year presented to the Select Board and Finance Committee Wednesday, Finance Director Linda Sanderson and Interim Town Administrator Michael Mason showed that there will be less money to work with to build the next spending plan.
For the fiscal year 2027 budget, the $22.37 million in anticipated revenues is $385,572 less than the $22.76 million that was available for the fiscal year 2026 budget. That budget saw a net of 10 municipal positions lost, with voters rejecting a Proposition 2½ tax-cap override in September that would have raised property taxes.
“We’re starting the year in the hole,” Sanderson said. “That is the point I’m trying to make when going through the revenues like that.”
The spreadsheets show that $23.85 million in revenue is necessary to preserve in fiscal year 2027 the already reduced services in this year’s $22.76 million budget.
The $1.48 million gap could be closed by eliminating 10 to 11 town positions. If the deficit is reduced to $384,201, there would be five town positions cut.
One of the biggest cost drivers is the health insurance and retiree benefits line, which has risen by $1.5 million from fiscal year 2025, increasing from $4.11 million to $5.6 million. Sanderson observes that increase alone is well above the $1.1 million overall increase in the town budget over the same timeframe.
“They’re squeezing out our operational departments,” Sanderson said. “That just blows me away.”
Sanderson outlined the reasons why revenue challenges exist. One is that finance officials don’t intend to use any free cash in next year’s budget, after applying $846,785 to this year’s budget.
They are also estimating a $100,000 reduction in new growth, the amount of new construction that is taxable, and a $152,228 drop in local receipts, from $4.41 million to $4.25 million, which takes into account excise, meals, lodging and cannabis taxes.
Mason said it’s possible new growth has been underestimated, based on the developments taking place around town. “We are hoping new growth skyrockets and we just projected low,” Mason said.
Another complication is adding $140,000 to the $60,000 overlay, an account used by assessors for property tax abatements.
While reductions are possible, Sanderson said there are so many cuts into personnel that these can’t be discussed in public session, but will instead have to be done behind closed doors. No specifics about what departrments could lose personnel is being presented publicly.
“That’s something beyond the authority of the town administrator and myself, so we need to bring that into executive session with the Select Board,” Sanderson said.
Even then, Sanderson said some of the reductions that may be proposed may not be realistic. “We don’t even know if, to some extent, this is even possible,” Sanderson said.
Schools will also face a major cut, but Mason said school leaders would have to figure out how to deal with that, and the Select Board wouldn’t have a say in the approach taken.