Mayor Gina-Louise Sciarra wrote a letter to the City Council stating that an override question would not be necessary this November, but will be in the future.
Photo credit: Northampton Open Media
NORTHAMPTON — During a special meeting on Aug. 5, the Northampton City Council voted unanimously to rescind a $3 million budget override question that would have graced the ballot during the upcoming Nov. 5 election.
Originally, Mayor Gina-Louise Sciarra had said during this past budget season that an override vote was necessary during this year’s election to support future spending for schools after the City Council approved a $40.8 million Northampton Public Schools budget, or an 8% increase from fiscal year 2024 numbers.
However, a “highly unusual uptick” in FY24 fourth quarter revenue and an accrual of $2 million in interest on the city’s existing cash balances prompted the mayor to send a letter to the City Council recommending that the override be postponed to a later date.
“The unexpected gains provide support to the Fiscal Stability Stabilization fund, prompting me to recommend that we postpone the override,” Sciarra wrote to the council. “An override will still be necessary eventually. But these additional funds will allow me and our experienced finance team to monitor the economic trends for the next few months.”
In her letter, Sciarra said there was a particularly sharp increase in motor vehicle excise tax revenue and higher-than-expected hotel/motel tax revenue. She called these “heartening indicators of a strengthening economy.”
Sciarra also said in the letter that the unanticipated FY24 revenue allows the city to replace the $2 million they just appropriated from the Fiscal Stability Stabilization funds for the FY25 public schools budget.
She stated that she originally requested an override be placed on the ballot because that fund was drawn down by this year’s appropriation, so it appeared it would be necessary to generate the recurring tax base needed to make that $2 million for the schools permanent in recurring.
The override, however, will not be necessary for this election, but Sciarra stated repeatedly in the letter and during the council’s special meeting that it will show up on the ballot eventually.
“I understand … that excessively frequent overrides increase the cost of living in ways that are difficult for many residents in the city,” Sciarra wrote. “So, while our Fiscal Stability Plan anticipates the need for regular overrides to maintain services, my promise to the residents of Northampton, especially to those on fixed incomes for whom any increases in annual expenses can be hard, is to put forward override requests only when absolutely necessary.”
City Council presentation
During the City Council meeting on Aug. 5, city Finance Director Charlene Nardi said that the city took in $1.1 million in motor vehicle excise tax for FY24’s fourth quarter, amounting to 30% of the total revenues of the year, which totaled $3.4 million.
According to Nardi, that $3.4 million in motor vehicle excise tax was $835,000, or 32% over the estimate for the year.
“We generally … see a smaller amount in the fourth quarter,” Nardi said, speaking on the motor vehicle tax. “That is different this year.”
During the meeting, Ward 1 City Councilor Stan Moulton asked Nardi why she thought there was such a jump in motor vehicle tax in the fourth quarter when it is usually a smaller amount.
Nardi responded by saying that she has not had a chance to look into it, but she did remind the council and public that major motor vehicle excise tax bills go out in February, and then there are 30 days to pay it.
“I do not know why this year is different,” Nardi said. “I don’t know enough about the economy of selling cars.”
Nardi also stated in her presentation that the fourth quarter performance from hotel/motel tax was in line with last year’s, but it still brought in $1.1 million, which represents a 39%, or $297,700 increase over what the city estimated.
Aside from that, Nardi also said that meals tax, cannabis and ambulance services also brought in more revenue than expected. Cannabis, in particular, represented an increase of 26% over budget estimates, a stark turnaround from the past few years, where cannabis revenues were decreasing.
A couple councilors offered positive thoughts after the presentation, while others reminded the council about the budgetary struggles the schools still face after around 20 full time positions were cut in FY25.
At-Large City Councilor Marissa Elkins commended the finance team for navigating the city through “a difficult time” during and following the coronavirus pandemic period. She also expressed jubilance for the fact that the city added an extra $192,400 to the school budget in late July from additional Chapter 70 state funding.
“I’m appreciative that we were able to add more money to the school budget,” Elkins said. “This has allowed us to return to a timeline for an override that was more like what was sort of projected in pre-COVID days back in 2020 when we passed the last override.”
Ward 6 City Councilor Marianne LaBarge also applauded Nardi and Sciarra for getting to the point in the budget where they can delay the override for another date. She said many people she has talked to supports and override vote but not for this year.
“I think we have a great finance team, and I am happy to see the increase that has occurred here and explained very thoroughly,” LaBarge said.
Although she voted to rescind the override, Ward 3 City Councilor Quaverly Rothenberg continued to express concerns that the school budget is still underfunded. She also added that the report of higher-than-expected revenues is not surprising to her and “should not be surprising to any of the councilors.”
Rothenberg, Ward 4 City Councilor Jeremy Dubs and Ward 7 City Councilor Rachel Maiore have been proponents of a level services budget during this prior budget season.
“You are canceling an override that you say was for schools, and you are leaving schools unfunded by $2 million,” Rothenberg said. “I just want to be clear, Mayor, that your position then is that you have adequate funding to run your city, and you think this is an adequate budget for the schools.”
Sciarra responded to Rothenberg by saying the city has adequate funding to ensure that $2 million they have already taken out of stabilization funds can be covered for the time being.
“If we used another $2 million of, let’s say, free cash for the MPS operating expenses this fiscal year, that would add another $2 million to the amount of the ongoing recurring expenses without a plausible plan in place to sustain that level of spending in subsequent years,” Sciarra said. “So, to be able to then roll in that additional $2 million, you would need to find a recurring revenue source. Otherwise, you would cause a deficit, and then we would need a far higher override.”
Sciarra also added that the last three fiscal years featured the largest spending increase in decades for Northampton Public Schools. She said that one-time revenue sources are exhausted after using them a lot.
In her remarks, Maiore emphasized the idea of being responsive to the schools’ needs throughout the council’s budgeting process. She said she wants to continue conversations around budgeting philosophy, especially with regards to education.
“The cuts are not benign,” Maiore said. “We have to find a way forward that actually reflects and meets the needs of the schools.”
The council is planning to have additional discussions around the fourth quarter reports in FY24 at its regular meeting on Aug. 15.
