Mayor Salem Derby talks about the matching grant that allows the city to host watch parties for the 2026 World Cup in June and July during the City Council’s April 8 meeting. He also shared that the city is facing a $3.8 million budget deficit in fiscal year 2027.
Photo credit: E-Media
EASTHAMPTON — Like so many other towns in Western Massachusetts, the city of Easthampton is now facing a $3.8 million deficit for its fiscal year 2027 budget, and its government will likely ask the town to vote for a Proposition 2½ override.
At the April 8 Easthampton City Council meeting, Mayor Salem Derby shared that when the final pieces of the budget were put together the day before, the city discovered it had a $7 million structural deficit for the next year.
Derby noted that he was “still in a little bit of shock” after hearing the final numbers. The deficit mostly stems from rapidly rising health care costs. As part of the Hampshire County Insurance Trust, the city faced a 20% increase of its health care costs in July 2025, followed by another 20% increase in October 2025. It is also expecting a 12% increase this coming July. Earlier in the meeting, when the council approved a resolution asking for Medicare for All in Massachusetts, Derby said that “the weight the health care system puts on the city is immense.”
“It’s literally happening across the state,” said Derby, noting that the towns of South Hadley, Westhampton and Southampton are local towns facing very similar issues.
Derby explained that, after seeing the numbers, he reached out to City Council President Koni Denham and Finance Committee Chair Thomas Peake, as well as city department heads, to share the news and to start to work collaboratively to address the situation.
After talks, Derby and city employees were able to bring the deficit down to the current $3.8 million by planning to shift $2 million from the stabilization fund and other planned changes. After this transfer of money from the stabilization fund, there would be roughly $1 million left in it. For FY26, the city had to move $4 million from it.
Although Derby did not discuss specific cuts that would need to be made, or when they would need to be made, he did note that, “There is not much fat to be cut. Revenue’s just not keeping up with expenditures.”
Derby called for a “collaborative approach” to make the case to residents that the city needs to keep its teachers and public safety officials and that the override request would be “as modest and efficient as possible.”
Peake noted that he’d been thinking for years that the financial situation was “not going to be sustainable long term.” He asked to be included in meetings that Derby planned to have with the Department of Revenue on April 9 to discuss a possible override.
While some other councilors, such as City Councilor James Kwiecinski, who noted the economic news was “sobering,” asked a couple of questions about the budget, many asked questions about a FIFA grant that Derby also announced at the meeting.
The $100,000 matching grant offers funds for the city to host watch parties for the 2026 World Cup this June and July. It requires matching funds from the city, but Derby assured the council that no city funds would be used and it would all be “in-kind donations” or sponsorships.
Councilors expressed concern about how these donations were procured, with Denham and City Councilor Kiam Jamrog-McQuaid asking to see copies of the grant application. Denham said she wanted to draw Derby’s attention to Sec. 2-7 of the City Charter, which discusses the council’s ability for oversight on projects and access to information. Denham said, “I hope you will do that” after saying she’d asked but had not yet seen the application. Derby said he’d be willing to speak to councilors outside of the meeting about the grant. Derby shared that the process had been OK’d by the procurement officer.
