Southampton officials outline multi‑million dollar FY27 shortfall and weigh an override

Southampton officials told a joint meeting of the Select Board and the finance committee on March 3 that the town faces a multi‑million dollar shortfall for FY27 and will prepare both an override proposal and a reduced-budget plan for residents to consider.

Scott, the town's budget presenter, said the presentation focused on revenue: "Tonight's all about revenue," and he warned that higher health insurance costs (described in the meeting as a dramatic increase this year), higher retirement contributions, loss of one-time ambulance funds and slower new growth together leave a structural shortfall of roughly $2.1 million to $2.4 million in the current budget draft. He said the town had budgeted conservatively for local receipts and estimated only about $250,000 in added revenue against rising costs.

The figure includes a proposed $350,000 capital program start, increases in collective bargaining and wages, and an estimated $25,000 set aside to begin amortizing possible runout claims tied to the town's departure from the Hampshire County Group Insurance Trust. Scott said the exact runout amount will not be known until claims processing is completed, likely mid‑ to late fall.

Board members focused on two large drivers: (1) a restorative request from Norris (the local school) of roughly $750,000 to restore services cut last year and (2) a longstanding capital funding deficit that officials said totals several million dollars. Reggie and other committee members cautioned that a full restoration for the school would be a substantial ask; Scott characterized the $750,000 as an estimate to restore last year's reductions.

Committee members also discussed limited immediate revenue options. Scott explained that the property tax levy is constrained by Proposition 2— and that state aid ("cherry sheet" receipts) and locally generated receipts such as building permits, cannabis and meals taxes provide limited flexibility. He said ticketed revenue from large new solar projects will not appear in FY27 because the projects are not yet built and payment-in-lieu agreements typically take effect only after construction.

The board and fincom directed staff and a budget task force to develop two detailed alternatives: an override budget showing exact service restorations and tax impacts and a lower-budget scenario that shows the cuts that would happen if voters do not approve additional revenue. Members agreed on the need for early public education and outreach so residents understand options ahead of Town Meeting and any override vote.

Next steps: the budget task force will meet, staff will refine numbers (including state assessment updates when they become available), and the Select Board and finance committee will return with a recommended override amount and a reduction plan to present publicly.