We know everyone is naturally concerned about this year’s budget, that will be presented at the Annual Town Meeting on June 7, 2025 and what might be adopted could cause the need for a possible override. The Selectboard and Finance Committee have been meeting jointly along with other town departments to prepare a budget for consideration at Town Meeting.
It is looking like the total budget requests will exceed the town’s ability to raise through taxation somewhere in the neighborhood of $200,000. What does that mean? All towns in Massachusetts are bound by certain sections of General Law Chapter 59 that limit annual tax increases based on the previous year’s tax rate and on the total taxable value of real and personal property in the community. It is commonly referred to as Prop 2 ½. You may recall that we found ourselves in a similar situation last year, though the number was smaller.
So what do we do in that situation? We essentially have 3 choices.
- We reduce spending. All town departments have done their best to look at their budgets, see where cuts would happen if needed and help us with explanations of what effects that might have on Town Services.
- We take money out of Town Stabilization Funds to cover the deficit. This is what we did last year. We waited until we had a pretty good handle on revenues and then voted at a Special Town Meeting in December to transfer $112,606 from stabilization to balance the budget. This is, in essence, dipping into our savings account. We have traditionally used funds in stabilization to fund one-time non-operating expenditures, ranging from a grill and tables at the town ponds to loaders, backhoes and new trucks. Should we continue to deplete those funds, we will more than likely need to start borrowing to make large capital expenditures. The current amount in the Stabilization fund is $1,566,772.00.
- The town votes to raise the 2 ½% levy limit. That’s what’s called an Override Vote and it happens at the ballot box, not at Town Meeting. We know there have been a lot of questions and natural concern about this possibility and what it means. We’ve had to engage in some education ourselves on the subject. The Selectboard would call for a Special Election with at least 35 day’s notice. The Selectboard would need to decide on the date and the amount of the override request. We are currently considering that, in consultation with the Finance Committee. Should that vote take place, it will NOT be happening on Town Meeting day. No doubt this will be discussed to some extent at Town Meeting, but there will NOT be a vote AT TOWN MEETING on an Override.
Worthington is certainly not alone in finding ourselves in this situation. Southampton, for instance, a little larger than Worthington but similar in many ways, is facing an override vote according to recent reporting in the Springfield Republican. They operate their own Elementary School like us and fixed costs on so many things have made it very difficult to keep pace with expenses. We all know that inflation has been well above 2 ½ % for the last several years. Many towns and cities in Massachusetts are also facing this same issue and are considering overrides.
In most past years, our operating budget has come in less than the amount we raised in taxes. This is called “excess taxing capacity”. The amount is carried forward and is added to what can be raised by taxation in subsequent years. In fiscal year 2022 it was $211,790.00 and at the end of fiscal year 2025 it was $2,339.00 after using the $112,606.00 to balance the budget. This excess capacity was key in balancing the fiscal years 2022, 2023 and 2024 budgets. With no excess capacity left to help balance the fiscal year 2026 budget the budget deficit is projected to be $200,000.00. So, as a town, we will be exploring the three options mentioned previously.
We hope you find this information helpful. We will be working hard over the next couple of weeks at Selectboard and Finance Committee meetings to finalize the budget request and prepare the warrant for Annual Town Meeting. We’ll do our best to be prepared to address questions and will be posting materials from Town Departments, as they become available, for review before Town Meeting.
Town Moderator Kevin O’Connor is also planning a special pre-Town Meeting informational session, to be held on Saturday, May 31. Details to follow on that soon.
Thanks,