HOLYOKE — The City Council has passed a budget of just over $172 million for the fiscal year 2025 operating budget, about a $9 million increase from FY24.
The budget was approved during the City Council’s June 11 budget hearing where the City Council had the opportunity to make any final cuts to the budget. Passed in a 7-5 vote, Councilors Howard Greaney Jr., Kevin Jourdain, Carmen Ocasio, Michael Sullivan and Linda Vacon were the dissenting votes.
Before a final budget was voted on, the City Council made $62,290 worth of cuts during its final budget hearing. The most notable cut from the council was $32,000 from the city’s IT budget for software license usage fee.
Another cut was $27,790 from the Mayor’s Budget for contract negotiations of a union contract not yet ratified. The final cut was $2,500 from in-state travel to the Massachusetts Municipal Association Annual Meeting Conference.
Of the total budget, $96 million will be directed to the schools.
Mayor Joshua Garcia thanked all department heads for their participation in the budget process following the vote and was excited to once again present a balanced budget with no service reductions.
“The FY25 budget is based on what we understand to be our revenue and expense projections and a fairly balanced understanding of Holyoke’s municipal service needs,” Garcia said in a statement. “This budget includes another year of increases in net school aid which has an impact on our local contribution to fund our public schools due to the Student Opportunity Act.”
Garcia added that transportation costs went up significantly over the last year, as well as the city’s health insurance which has absorbed the little bit of excess capacity the city had worked to build up since the beginning of the mayor’s term.
Due to these increases, coupled with the city’s contractual obligations and COLA increases for retirees and Schedule A employees of the city ordinances, Garcia said they attempted to keep department budgets within a 2% increase or close to it.
“The approved budget includes average moderate revenue increases in net local revenue growth to assist in closing the ARPA revenue replacement gap that existed from fiscal years 2022-2024 while remaining somewhat conservative,” Garcia explained. “However, these estimates remain conservative to help continue to mitigate any circumstances that contribute toward uncertainty.”
In previous years budgets, the city has used ARPA revenue replacement funds to fill revenue gaps caused by COVID-19. This budget does not include any dependency on ARPA revenue replacement dollars.
“The budget is a moving target with new revenue projections being realized every day. We will know more about our revenue capacity as we get closer to the fiscal year end and calendar year end prior to setting the tax rate,” Garcia said. “I anticipate making additional adjustments to the budget as we get closer to calendar year end so that we can strike a better budgetary and service need balance.”
Garcia added this budget is not dependent on ARPA revenue replacement and does not propose a Proposition 2½ override or any reduction in services and has a small surplus.
“Across every important metric, Holyoke is solidly and decisively moving in the right direction,” Garcia said after introducing his budget during his May State of the City address. “Our local economy keeps getting stronger. Our schools are on their way back into local hands. Our budget is in surplus for a third straight year, and we didn’t need to use any reserves, free cash or ARPA revenue replacement.”
To review the June 11 budget hearing and vote, as well as previous budget hearings from this year, recordings of meetings are available on the Holyoke Media YouTube channel.
