Harvard budget leaves gaps only an override can close

Harvard’s proposed budget for fiscal year 2027 preserves core town services despite a surge of more than $543,000 in employee benefit costs. But it still comes up short, and the gap falls on school supplies and on staff positions officials say are critical.

To close that gap, voters must approve a $135,370 Proposition 2½ override at the Town Election on Tuesday, May 5. But Article 7—the $36,731,872 omnibus budget—comes first, at the Annual Town Meeting on Saturday, May 2, where a simple majority is required. Both the Select Board and Finance Committee have recommended it.

Why an override is needed

Proposition 2½ caps how much the town can raise in property taxes each year, which means the tax levy can grow by only 2.5% annually, plus whatever new construction adds to the base. When projected expenses outpace that limit—and this year they did—the town must cut services, ask voters to approve an override, or both.

The revenue side offers little help. State aid is projected to stay flat, and new construction—which adds to the tax base outside the Prop 2½ cap—is expected to generate only about $100,000 this year. Finance Director Jared Mullane said that figure came directly from the town assessor, who is seeing fewer building permits. When costs rise faster than the levy limit allows and revenues can’t make up the difference, the gap must be closed some other way.

What the override covers

The $135,370 pays for seven specific items the Select Board chose to protect rather than cut:

• School Department supplies: $38,000
• Title I supplemental intervention services for students at Hildreth Elementary School: $34,568
• Wages for a community and economic development director: $30,000
• Finance Department receptionist: $10,700
• Tree warden expenses: $10,000
• Additional hours for the Board of Health assistant: $8,838
• Benefits associated with the above positions: $3,264.

The $30,000 override item would expand the salary range for a community and economic development director the town is actively recruiting. The position is already budgeted at $99,000—but the Select Board and Finance Committee disagreed sharply over whether to fill it at all. At its February budget retreat, the board rejected a Finance Committee recommendation to cut the role to 19 hours a week, saving $50,000, and went the other direction, adding $30,000 to make the position more competitive. The director would focus on commercial and economic development while supporting the Planning Board’s ongoing needs. Select Board Chair Kara Minar cautioned at the group’s February retreat that even the expanded salary of $130,000 plus benefits might not be enough “to get the quality of person” the town needs.

The Title I item was a late addition. The school district learned it would not receive a $34,568 federal grant it had counted on to fund those intervention services. Rather than cut the program, the Select Board folded the amount into the override. If voters reject the override at the polls, those intervention services, along with the other items on the list, would be among the first things cut.

The override might have been much larger. Last November, the projected shortfall stood at $1.6 million. In February, the Finance Committee voted to recommend a $396,754 override after cutting $267,000 from town and school budgets.

Then came what Select Board Chair Kara Minar called “a budget miracle.” Health insurance premiums, which had been budgeted to rise 15%, came in at roughly 6% instead, a difference worth more than $313,000. Lower enrollment and teacher retirements allowed the schools to submit a budget more than $600,000 below initial projections. The Select Board then made its own cuts: moving an $80,000 police cruiser purchase to the capital budget, trimming the ambulance enterprise fund subsidy by $62,185, cutting $30,000 from the public buildings supplies budget, and several smaller reductions.

‘Reasonably small’

The result is an override request that board member Eve Wittenberg called manageable. “I feel very comfortable with this budget,” she said at the panel’s March vote, “acknowledging that it’s a reasonably small override request for the town.” Board member Ahmet Corapcioglu said the board had looked carefully at whether avoiding an override altogether was possible before concluding that further cuts would begin to affect critical services.

The Finance Committee, which had recommended a larger override, ultimately voted 4-0 to recommend passage of the Select Board’s budget. Chair Mike Derse noted that the committee disagreed with some of the board’s decisions—the Select Board restored and expanded funding for an economic development director that FinCom had recommended cutting—but said he would support the override regardless. “I will still vote for the override as written,” he said.

A harder road ahead

This year’s budget works. Next year is another matter. Mullane presented the Finance Committee with a five-year forecast last month showing the town’s deficit widening from zero in fiscal 2027 to more than $5 million by fiscal 2031 (See page 11 in the warrant booklet.)

Mullane’s forecast is a planning tool, not a spending plan, while Article 7 is a binding document: a line-by-line appropriation for the coming fiscal year that Town Meeting votes to adopt or reject. The forecast looks beyond that vote, projecting where revenues and costs are headed based on assumptions that Mullane acknowledged were partly educated guesses. What it shows is a town in balance for fiscal 2027—and increasingly out of balance after that.

The assumptions behind that trend explain why: Health insurance is budgeted to rise 10 to 12% a year going forward—roughly double the rate that made this year’s budget work. The town’s pension assessment is projected to climb 10% annually. Payroll costs are expected to rise 4 to 6% a year; contracts for the teachers union and the DPW are still in negotiations. Meanwhile, state aid is projected to hold flat through 2030, local receipts are flat, and new construction is expected to add only about $100,000 a year to the tax base. “If inflation is higher, then the cost-of-living adjustment is higher,” Mullane said, describing his out-year payroll figures as “a guesstimate.”

School expenses are projected to climb from $16.8 million this year to nearly $20.8 million by fiscal 2031. Employee benefits are expected to rise from $7.6 million to $10.7 million over the same period. The complete forecast and its underlying assumptions appear on pages 10 and 11 of the Town Meeting booklet.

Impact on taxes

Any tax increase falls hardest on residents least able to absorb it—seniors on fixed incomes, young families, and those already stretched thin. If the override passes, the tax rate would rise by 7 cents per $1,000 of assessed value. For the average Harvard home, assessed at $918,796, that works out to $64.32 a year.

Harvard offers several programs to reduce the tax burden for qualified seniors, and the town’s Community Preservation Act surcharge—a 3% add-on to property taxes—includes a means-tested exemption for low- and moderate-income residents and seniors. For a full list of assistance programs, visit the Council on Aging page at harvard-ma.gov/council-aging.

Not all Town Meeting spending draws from the annual tax levy. Some warrant articles are funded through the Capital Stabilization and Investment Fund, which is built from prior-year savings, and the Community Preservation Fund, which is supported by the 3% surcharge already on residents’ tax bills. Spending from those sources is itemized in Articles 9, 11, and 13.

Town Meeting begins at 10 a.m. Saturday, May 2, at the Bromfield School auditorium. Polls on Tuesday, May 5, are open from 8 a.m. to 8 p.m. at Hildreth Elementary School. Voters wishing to vote by mail must request a ballot by 5 p.m. on April 28; ballots must be returned no later than 8 p.m. on Election Day.