NORTHAMPTON — School spending has so far been a main concern during preliminary budget discussions for fiscal year 2025, and that trend continued during a recent annual joint meeting focusing on the financial condition of the city.
On Jan. 30, The City Council, School Committee and the trustees of the Smith Vocational and Agricultural High School met with Mayor Gina-Louise Sciarra over Zoom to go over financial trends and projections for FY25 — which begins July 1 — as well as the rest of FY24. The mayor meets with these entities around the end of January every year before the budget process officially builds steam.
Once again, schools were a major topic of discussion during the meeting as the city grapples with how the department can return to a good fiscal standing.
During a preliminary school budget presentation in mid-December, Superintendent Portia Bonner said that Northampton Public Schools are requesting close to $40.8 million for FY25, which would represent an increase of just under 8% from the current FY24 budget.
Bonner estimated a school budget deficit of $2.7 million in FY25 due to the district’s overreliance of School Choice funds beyond sustainable levels, the elimination of coronavirus pandemic-related federal funding — also known as ESSER funds — and union contract increases that are exceeding the district’s revenue growth, and an increase of staff from FY18 to the current fiscal year due to coronavirus pandemic-related stressors and a change in the model to serve students with special needs.
To close the $2.7 million gap, the FY25 school budget features recommendations that include possible reduction in hours and/or elimination of staff.
“We are making a concerted effort to keep within the two-year plan to work to balance the school budget and return Northampton Public Schools to strong fiscal principals as promised to the city,” Bonner said in her presentation. “To meet this promise, we must consider reductions within the workforce and rebuild the school choice reserves.”
Sciarra, however, said during the Jan. 30 joint meeting that a school budget increase of 8% would create a budget deficit of $3.5 million in FY25 and would require a $5 million Proposition 2½ override in FY26 and another $5 million override in FY29.
Instead, based on anticipated revenues and expenditures, Sciarra is recommending that the School Committee approve a 4% increase from their current budget.
“I very strongly recommend that the School Committee look to support the administration in bringing the budget back in line with the fiscal stability plan,” Sciarra said.
According to Sciarra, a 4% raise for schools in FY25, along with a 2.5% increase for other departments, would still leave a city budget deficit of $700,000 and would require a $2.5 million override in FY26. The $700,000 gap would be covered by the city’s fiscal stability stabilization fund, according to Sciarra.
The city’s fiscal stability plan was enacted in 2014 with a $2.5 million override. According to Sciarra’s presentation, the plan outlines the budget for five years with “planned, periodic” overrides that generally occur every four to five years. The second $2.5 million override was voted in March 2020 but was not implemented until FY22 due to the coronavirus pandemic.
“The use of this fund must be done carefully and in a planned way which is how is designed to be used to stabilize and allow sustainable and consistent increases annually to maintain services and avoid and avoid the roller coaster of cuts,” Sciarra said.
The city has used money from the stabilization plan for the budget in FY19, FY20, FY21 and FY24. Sciarra said that in 2024, the city has begun to use more from the plan than they have put in.
During her presentation on Jan. 30, Sciarra attributed the challenges the school district is facing to two “fiscal cliffs.” One is the end of those one-time, ESSER funds, which provided $7 million in relief to the district over the past few years. The second, meanwhile, is the district spending money from the School Choice account faster than it replenishes it.
Sciarra warned of these cliffs in the past, including in her FY23 budget message, where she said the overreliance of School Choice reserve funds and one-time ESSER money would create a budget gap that would exceed the city’s capacity to raise additional revenue to cover it.
In FY24, Northampton Public Schools faced a $2.3 million budget gap which was eventually cut to $649,300 after Sciarra covered more than half the shortfall by using COVID-19 relief money and a one-time payment of $1.2 million from the city’s stabilization fund.
During the Jan. 30 meeting, Sciarra reiterated her concerns with using School Choice and emergency relief funds on recurring expenses.
“One-time funds, as I’ve said so many times, if you use them for recurring expenses, especially compounding expenses like salaries, they will create a deficit that will grow,” Sciarra said during the January presentation.
In general, Sciarra said the city’s reserve funds, which are usually used for weather-related catastrophes or major infrastructure failures, have seen growth over the last seven years, although she attributed the growth over the last four years to the one-time federal pandemic relief money the city received. Sciarra said that the city will most likely not see this type of money again.
Many city councilors and School Committee members spoke during the meeting about the situation with schools and how it affects the broader conversations around the city budget.
Ward 4 School Committee member Michael Stein noted how the district added more positions between FY18 and FY21 due to the adoption of a new special education model, but the majority of those positions were never built the yearly appropriation, which caused the district to use school choice funds to balance the budget.
“[That] is what produced the fiscal cliff that now we are grappling with,” Stein argued. “That’s the big elephant.”
Ward 6 School Committee member Margaret Miller asked Sciarra if there is anything the city can do to advocate for more statewide Chapter 70 funding, since that type of funding in Northampton has been stagnant for many years.
Massachusetts voters opted to levy an additional income tax on Massachusetts’ highest earners back in November 2022. Known as the Fair Share Amendment, the successful vote amended the state constitution to levy an additional 4% surtax on income over $1 million, to be put toward education and transportation. Eighty-two percent of Northampton voters supported this levy.
Despite this victory, some districts, like Northampton, are not receiving sufficient funds from the state while requirements for school spending continue to increase.
Sciarra said legislators are very aware of this issue and she has spent time talking with other communities who experience these same problems.
“Short of changing the formula, I don’t know what we can do,” Sciarra said.
At-Large City Councilor Garrick Perry said he was heartened by the fact that the city’s meals and hotel taxes have returned to pre-pandemic levels and added that arts and entertainment will be key to attracting a younger population in the city and thereby benefiting the schools.
I’m looking forward to, as we try and grapple with these issues, is taking a step back in a big picture view is also how we make our area more inviting to folks because I believe we have a lot to offer and I believe that we have the ability to overcome some of these gaps not through traditional means,” Perry said.
Ward 7 Rachel Maiore mentioned how the city should think about how investment in the schools could lead to attracting and maintaining residents in Northampton.
“I think in terms of council, we have some tough conversations,” Maiore said.
The deadline for Northampton Public Schools and Smith Vocational and Agricultural High School to submit adopted budgets to the mayor is April 16.
The City Council has until June 30 to vote on the entire FY25 budget.
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