Finance director forecasts another deficit as fiscal 2027 budget talks begin

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The odds that voters will be asked to approve another increase in their property taxes beyond the limits set by Proposition 2½ grew this week.

Finance Director Jared Mullane told members of the Finance Committee at their Tuesday meeting that the cost of providing town services and educating Harvard’s children could exceed revenues by as much as $1.5 million in fiscal 2027. While town revenues are forecast to grow by $1 million, expenses could increase by as much as $2.5 million, he said, a difference that must be eliminated by cutting costs or raising taxes to achieve the balanced budget required by state law.

This updated forecast, the first since Annual Town Meeting in May, includes the amounts requested by department heads in the fiscal 2027 budgets they submitted to Mullane and Town Administrator Dan Nason earlier this fall. The schools won’t release theirs until Dec. 23. This week’s latest forecast, however, assumes the schools will ask for a 6% increase, Mullane said.

Members of the Select Board and Finance Committee were emailed copies of the forecast as well as a breakout of each department’s requested personnel and other expenditures on Tuesday afternoon. While the forecast offers a preview of what’s to come, it is built on assumptions that won’t be resolved for several weeks. The Finance Committee begins its review of departmental budgets Dec. 16 when it meets with the police and Department of Public Works.

At Tuesday’s meeting, Chair Mike Derse told Select Board liaison Ahmet Corapcioglu that given the size of the projected deficit, the committee needed guidance from the Select Board on the amount of override it was willing to support. The Harvard Town Charter requires the board to do so no later than Dec. 31, 2025.

Proposition 2 ½ allows a town to increase the tax it levies on property owners by 2 ½% per year, plus an allowance for new construction. Any increase beyond that amount, known as an override, requires a majority vote at the ballot box. Last year, voters approved a $1.36 million override to balance this fiscal year’s budget of $35.3 million, an increase that contributed to the estimated 6.46% increase in the average tax bill of a Harvard homeowner, according to Harvard’s town assessor.

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