Northampton projects FY26 gap, pushes revenue assumptions to fold $2 million school increase into base

Mayor Scherer and Finance Director Nardi presented the City of Northampton’s fiscal-year 2026 budget forecast at a joint meeting of the City Council, the Northampton School Committee and the trustees of Smith Vocational and Agricultural High School on Jan. 30, saying modest state aid increases and rising fixed costs will force the city to rely on aggressive local revenue projections to meet a committed 4% increase for schools.

The mayor framed the presentation as an effort to “do the work for the people we serve” amid what she called “a new period of uncertainty” about federal funding and other outside revenues. “We are greatly, greatly, greatly pushing revenues,” she said, describing the administration’s approach to folding a $2 million recurring increase for Northampton Public Schools into the city’s base budget for FY26.

Why it matters: Northampton gets most of its general fund from local property taxes, which the presenter said supply about 68.4% of FY25 revenue and are constrained by Proposition 2½ annual growth rules; state aid now accounts for roughly 14% and has trended downward as a share of the budget. That combination, plus rising retirement and health insurance costs, left the mayor and finance director warning that the FY26 plan carries material risk if anticipated revenues fail to materialize.

Key numbers and assumptions - Taxes: 68.4% of general-fund revenue in FY25; real estate comprises about 62.3 percentage points of that total. - State aid: the governor’s cherry-sheet increased net state aid to the city by $375,374 over FY25; chapter…