Methuen Council delays fiscal 2026 budget first read after late state 'circuit breaker' news

Methuen’s mayor asked the City Council to adjourn Monday night and postpone the first reading of the fiscal 2026 budget after receiving “breaking news” about the state Senate’s supplemental budget that may change how the Commonwealth reimburses school costs under the circuit breaker program.

“The Senate's supplemental budget…would potentially have significant impact on our situation relative to school funding here in Methuen,” the mayor said, asking the council to delay the first read so staff could “gather all of the necessary information” and return with an updated appropriation order.

The request centers on circuit breaker funding, a state reimbursement that offsets certain special-education and related out‑of‑district costs. The city’s chief administrative and finance officer (CAFO) told the council the Senate has changed the formula under consideration for the supplemental budget for fiscal 2025 and potentially fiscal 2026, which could increase Methuen’s reimbursements for both years.

“[The state] has changed the formula … which would mean that we would receive additional funds in both ’25 and ’26,” the CAFO said. The superintendent of schools said her team could calculate the district’s likely reimbursement if given a day or two to apply the state’s new formula, but cautioned that the additional money could not be assumed until the city received confirmation from the Senate and, ultimately, the governor’s signature.

Councilors debated whether to proceed with parts of the budget unrelated to the schools. Several members argued that because the school budget accounts for more than half of the city’s operating budget, postponing the first read was the prudent step so the council could consider the full picture; others said they were prepared to move forward on non‑school departments that evening.

The mayor and CAFO described preliminary internal adjustments they had already modeled for the appropriation order that evening: reallocating 100% of meals tax revenue to the general fund instead of a 75/25 split to stabilization (which the mayor said would free about $175,000) and reallocating billboard revenue now directed to stadium and park stabilization (freeing about $320,000). The mayor noted the city’s stabilization account currently holds about $8,000,000 and said those funds could be used to reduce layoffs if warranted.

The council approved a motion to adjourn and reconvene at a later date. “Motion to adjourn to June 23, mister chairman,” a councilor moved; the motion was seconded by Councillor Ferretra. By roll call the motion passed; the mayor and council scheduled the reconvened meeting for June 23 at 6:30 p.m.

Next steps the council discussed include: the superintendent’s team and the CAFO calculating the district’s likely additional circuit breaker reimbursement based on the state’s posted formula; confirming the Senate’s numbers with Senator Paolo and awaiting any necessary action by the governor; and the mayor’s office issuing an updated appropriation order for the council’s consideration when it reconvenes.

The council emphasized the fiscal deadline: fiscal year 2025 closes June 30, and the council must complete its appropriation process before that date. Councilors and school officials said they wanted time to verify amounts and implications before voting on the budget so that any state reimbursements would be reflected in the appropriation order rather than forcing later revisions or reallocations.