By DAN TOMASELLO
LYNNFIELD — The town is currently facing a $5 million budget shortfall for fiscal year 2026 and a Proposition 2½ override will need to be considered this spring, Town Administrator Rob Dolan said during the Select Board’s Feb. 27 meeting.
Dolan said town officials have “developed the frameworks for the 2026 fiscal year budget” over the past month.
“Departments have been working very hard to estimate costs and revenues, and we have recently received key information and assessments from the state regarding fixed costs like health insurance and pension costs, which are major parts of our budget,” said Dolan. “We do not manage these fixed costs, as they are managed statewide and countywide by the Group Insurance Commission (GIC) and the Essex County Regional Retirement Board. We have also reviewed the governor’s budget that allocates local aid to the cities and towns of the commonwealth that have a particular impact on education funding. We have studied revenue trends and estimates weekly.”
Dolan said town officials are “managing the current FY25 budget very well.” He said the town will have a “strong Free Cash position” in FY26. He noted that S&P Global Ratings, formerly known as Standard and Poor’s, “recently reaffirmed” the town’s AA+ bond rating.
However, Dolan said the FY26 budget for Lynnfield and other municipalities in Massachusetts is “looking like the most concerning budget that I have seen since the economic crisis of 2008.”
“I must be fully transparent that the information we are receiving daily is concerning at every level,” said Dolan. “As we begin our budget process, we have identified and agreed to a revenue assumption. That number, which is derived from taxation at the Prop 2 ½ limit, new growth revenue, state aid and local receipts, has been established at $2.23 million new dollars available in FY26. It is my goal to publicly review all of these dollars in complete and transparent detail to you in the coming weeks.”
Dolan said he has shared his “immediate concerns” with the Select Board, the Finance Committee and school officials.
“At the foundation of this fiscal challenge are fixed costs and benefits, and the costs associated with educating our children at the standard Lynnfield expects and that everyone of our students deserves,” said Dolan. “It also should be pointed out that our schools and town are in collective bargaining negotiations with all collective bargaining units, including our teachers, police, fire and DPW.”
Dolan said the GIC announced on the morning of Feb. 27 that health insurance costs will be increasing by 12.9 percent in FY26, which he said, “is the most in its history.”
“To put that into perspective, the annual budget increase for Lynnfield benefits over the past eight years has wavered between 3 and 5 percent,” said Dolan. “That benefit increase announced, currently calculated, is a $1.3 million cost increase for FY26 from FY25. This line item is a mandatory fixed cost that we do not manage, but must pay.”
Dolan said the school system has a number of challenges as well.
“We know that across the commonwealth, meeting needs in public schools has never been harder,” said Dolan. “The costs of collective bargaining with our valued educators, meeting the needs of all learners’ post-COVID, and maintaining the rightful expectation that the town of Lynnfield will offer amongst the best public education experiences in the state for every child has never been harder or more expensive.”
According to the Department of Revenue’s Division of Local Services, the town is expected to receive $7,946,029 in local aid for FY26 under Gov. Maura Healey’s current state budget proposal. Dolan anticipates that Lynnfield will be receiving $6,337,990 in Chapter 70 education aid and $1,308,778 in unrestricted general government aid in the next fiscal year. He called the projected $180,000 increase in local aid “completely unacceptable.”
“That is maybe two positions,” said Dolan.
Dolan recalled that Superintendent Tom Geary announced during a School Committee meeting in late January that he was seeking a $33.2 million spending plan for FY26, which represents a 7.8 percent increase over FY25’s $30,806,245 appropriation.
“Last month, the superintendent made public initial estimates of a 7.8 percent funding increase to maintain the current level of educational service,” said Dolan. “The average over my time here of increases to our schools has been between 3.6 and 4 percent. In many ongoing meetings, and more service and need evaluation studies by the Lynnfield Public Schools, it has become clear that the early number is inadequate. Without this funding, the schools have made it very clear that this will force substantial program and staff reductions across the Lynnfield Public Schools. In fact, although a work in progress, the education funding increase needed to maintain a level-services budget for our schools may top $3.3 million or 11 percent. That is a work in progress.”
Dolan said, “the FY26 budget imbalance at this point is driven by health insurance increases on the town side and the cost increases needed to support our excellent schools.”
“Again, the new total revenue estimated that the town of Lynnfield will bring in for FY26 is $2.3 million,” said Dolan. “The increases in fixed benefits costs of $1.3 million, and proposed new education funding at $3.6 million, represent a combined cost increase at this time of $5 million. That does not include other inflationary increases, which are far less. Simply put, if the town of Lynnfield wants to maintain its current level of services in all departments, but especially the Lynnfield Public Schools, an override must be considered and debated this spring.”
The last Proposition 2½ override that Lynnfield residents voted on and subsequently approved occurred in June 2011. According to the June 2011 Special Town Election results, voters approved that override by a 1,613-1,052 margin.
Dolan said he will be presenting the FY26 operating budget this month.
“We are cutting costs every single daily, reforming departments, being creative and absolutely working to leave no stone unturned,” said Dolan. “Every suggestion and idea to streamline and reform will be immediately studied. I will use every available means in the coming months to communicate clearly and explain all budgets and all challenges in detail. I must share, however, that this particular fiscal challenge is not a spending issue. It is a revenue issue. We will continue to meet and work on this challenge tirelessly every day and I will report to you and the public continuously as I have done tonight and at the Finance Committee meeting (on Feb. 25).”
Select Board Chair Dick Dalton said the town “certainly has our challenges that lie ahead.”
“I would urge all of the residents in town to pay attention to what is happening here in these next few weeks, what is happening at the Finance Committee and what is happening at the School Committee with respect to budget issues,” said Dalton. “There will be some difficult choices that people will be asked to make. We can make good decisions at Town Meeting when people are well-informed. We will do everything we can to inform the public about the facts and the challenges that we have to deal with.”
Select Board Vice Chair Phil Crawford agreed.
“We have looked at this long and hard the last few months,” said Crawford. “We have been riding the wave of MarketStreet’s tax increase that the public has enjoyed for the last 10 years. In the 12 years of me being on this board, this is the first time that we are going to hit a budget that we just cannot cover. It’s going to be a challenge this year. The money we got during COVID kept us going probably for another three or four years than it would have otherwise. Now is when we are going to make some hard decisions. The town is going to have to make a hard decision at Town Meeting and at the ballot. That is what is coming.”
Select Board member Alexis Leahy urged residents to stay informed throughout the FY26 budget development process.
“Being informed is the only good way to make a decision,” said Leahy. “Everybody has a voice in this town at Town Meeting. I am urging folks to reach out with questions to any of us and the town administrator as well. I am looking forward to the presentations and seeing what we come up with at the end. It’s good to have more concrete information, as I know we were waiting for some decisions this week. I hope that the proposals are very forward-looking too.”