A $3 million budget override question intended for voters in Northampton, Massachusetts this fall has been rescinded – following a special city council meeting.
An unexpectedly strong fourth quarter during the last fiscal year was cited by the mayor when requesting the override question be punted from this year’s ballot.
Following months of debate over the city’s FY25 budget, the city council voted in June to add the $3 million override question to the November 5th ballot.
It would apply to the following fiscal year and, according to Mayor Gina-Louise Sciarra, would come amid repeated borrowing from one of the city’s stabilization funds over the past two budgets.
That was, until she received word of higher-than-expected revenues.
“After taking over $3 million from the Fiscal Stability Stabilization Fund in FY 24 and FY25 for the Northampton Public Schools, we had determined that ‘low level’ had been reached, and we called for a $3 million override,” Sciarra said during the virtual meeting. “Last Monday, Director Nardi called me midday … and said, quote, ‘We need to talk - I have most of the fourth quarter numbers.”
Those fourth quarter numbers included figures like the city’s motor vehicle excise tax taking in $1.1 million – "30 percent of the total revenues for the year" – which added up to an estimated $3.4 million.
That $3.4 million was 32 percent, or $835,031, over the estimate for FY24, according to Northampton Director of Finance Charlene Nardi.
She noted that normally, the excise tax yields a “smaller amount” in the fourth quarter when it comes to revenues.
Other sources with totals over FY24 estimates included the hotel/motel tax, which posted a fourth quarter in line with the prior year, according to Nardi, but still totaled nearly $1.1 million for the year – 39 percent, or $297,700, over the FY24 estimate, thanks in-part to strong first and second quarters.
Cannabis revenues, the meal tax, and ambulance revenues also beat estimates. The director says she hopes to share a final FY24 budget later this month.
The uptick comes amid the city accruing around $2 million in interest on cash balances.
However, the mayor and Nardi said even with the good financial news, an override will be needed eventually – just not now.
“These additional funds [do] not change the fact that we will need an override,” Nardi said. “It doesn't change the talk about what's sustainable and what we can make reoccurring. To me, this is just good news that we're talking about the change of the override and when it will occur and our hope is to delay that as long as possible if possible, but we still need one and it doesn't change the dynamic of what we can make reoccurring.”
The council voted unanimously to rescind this year’s override, but not before some councilors brought up how the school district is shedding about 20 positions under the current budget – closing part of what the mayor previously called a $4.77 million deficit created by the loss of pandemic funding, staffing increases over the past few years and other factors.
With a number of support staff and teachers still cut, advocates have been calling for more stabilization funds to be used to “avoid the most devastating cuts,” as Ward 3 Councilor Quaverly Rothenberg stated during a July meeting.
Speaking Monday morning, Rothenberg claimed that, given indicators such as consistent interest rates, the extra dollars presented at the meeting should not have been that much of a surprise.
She also described how the current school budget of over $40 million still underfunds NPS.
“You are canceling an override that you say was for schools and you are leaving schools unfunded by $2 million - 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,” Rothenberg said.
Sciarra responded that the city has “adequate funding to ensure that the $2 million” already taken out of stabilization funds can be covered “for the time being”– but that using another $2 million for district operating expenses this fiscal year, without a recurring revenue source, would likely translate to a bigger override.
“To be able to then roll in that additional $2 million, you would need to find a recurring revenue source,” she said. “Otherwise, you would cause a deficit, and then you would need a far higher override to be able to cover then that $4 million of one-time money that then needs to become recurring revenue.”
Sciarra, as well as other councilors, referred to Monday’s move as “postponing” the override, rather than cancelling it.
The mayor also noted NPS had seen “the biggest three-year spending increase” in decades over the last three fiscal years, with the city’s contribution to the schools increasing 5.1 percent in FY23, “over 7 percent” in FY24, and 8.5 percent in FY25.
