SOUTH HADLEY — Town Administrator Lisa Wong and Superintendent Jennifer Voyik gave a fiscal year 2026 town and school budget update during a meeting on Sept. 2, at which Wong stated, “We certainly wish that we didn’t have to give you this presentation today.”
The presentation went over budget problems, impacts South Hadley may be facing and the plan for solving the potential budget deficit.
Wong explained the health insurance is expected to increase by $2 million from last year to this year with another major increase also expected for next year.
Wong highlighted slow growth and flat/falling state aid as a major factor in the town’s revenue being down.
The cost drivers like health insurance and special education will compound each year, so the trends are going to increase the deficit by about $2 million every year to keep the same level of services, according to Wong.
For FY27, South Hadley is expected to have a $3 million budget gap. Wong stated, “To create level services, we basically need to increase the budget by $4.5 million.”
Half of the increase is due to health insurance. Wong said that one of the reasons why South Hadley has been able to have a “pretty stable” budget is because for the last six to eight years, health insurance has been under $5 million. The town has been proactively making cuts over the past few fiscal years.
South Hadley is projecting the cost of health insurance to increase to $12 million in FY30.
South Hadley has already begun balancing the FY26 budget. There was a layoff at the senior center, 19 teaching positions were cut, additional busing fees were added and there was a reduction in custodial staff and extracurricular activities.
Wong said they need to further close the gap and South Hadley will be hosting a Town Meeting in November for proposed budget cuts including reducing $100,000 from expenses and $30,000 in unfilled positions.
The town will also be seeking approval to use $688,000 in free cash for operations instead of capital funds. If Town Meeting does not approve the additional use of free cash, Wong said there will have to be cuts to staff and services.
Wong also looked at the future projected budgets for FY27 and FY28, as well as FY29 to FY31, and presented multiple plans that are being discussed, although nothing is finalized.
Starting next July, Wong said the town may have to reduce hours across the board, cut positions from multiple departments and even close a couple libraries throughout the next five fiscal years.
For the School Department in FY27, Voyik said they have looked at cutting three administration positions and an additional 20 student facing positions from support staff to teachers to administrative assistants.
All sports and all extracurricular activities could be cut throughout the district. There would also be a reduction in electives at the middle school and high school as well as a reduction in transportation options and/or increased fees.
For FY28, the presentation said “to be determined,” and Voyik explained, “It’s to be determined because I don’t even know if we would have a school district at that point because cutting everything that I just put up there for FY27 leaves us with huge class sizes and not enough staff to educate students.”
Everything is on the table for discussion, but Wong said the town is doing “a myriad of things to prevent that.”
Voyik told Reminder Publishing that everything presented is “preliminary” and represents only estimated cuts, based on the parameters presented at the Sept. 2 joint Selectboard and School Committee meeting.
Other plans discussed include using free cash, tackling unfunded mandates, fighting for state and federal funding, figuring out health insurance costs, increasing new growth, exploring new revenue sources, using stabilization funds or have the town approve an override.
The budget task force meets every other Monday and will host listening sessions to make recommendations. Wong said there could be a possible vote at the next Town Meeting in April 2026 about a potential override.
Wong said the town won’t get more exact numbers until October, but looking at the FY27 projected budget deficit, a $3 million override ask can range from $10-$100 increase for residents per month with the average household being around $50 per month.
Wong said residents can view the budget at southhadley.org under the budget and financial information sections. The town will post videos, budgets and PowerPoints as well as agendas and minutes for previous and future meetings.
Questions can be directed to selectboard@southhadleyma.gov or by calling Wong at 538-5039, ext. 6136.
