Wayland voters still may be asked to approve the town’s first operating override since 2009, but the numbers, and the argument for putting one before voters, have changed substantially during the past several weeks.
Under Massachusetts’ Proposition 2½, a town generally cannot increase the total amount it raises from property taxes by more than 2.5% a year, aside from taxes generated by new construction and certain other adjustments. An operating override asks voters for permission to raise that annual limit by a specific amount to pay for ongoing expenses such as schools, public safety, employee salaries and benefits, and other town services.
If voters approve it, the additional taxing authority becomes part of the town’s permanent levy limit and can continue to grow in future years under Proposition 2½. If voters reject it, the town must balance its budget without that additional revenue, which can mean spending reductions, service cuts or other budget changes.
Earlier town forecasts suggested Wayland could face an operating shortfall of $2.5 million to $3 million in fiscal 2028. The latest projections presented to the Select Board and School Committee on Aug. 31 put the immediate gap much lower: about $631,000, under the working assumptions being used by Finance Director Brian Keveny. It is likely this figure will change multiple times in the coming months. Adding a $200,000 cushion would produce an estimated FY28 override of about $831,000.
That does not mean Wayland’s longer-term budget problem has disappeared. Instead, the debate has increasingly shifted toward whether voters should be asked to approve an override now as part of a plan covering the next three fiscal years or whether the town should first make additional spending reductions. Residents should also consider other ways to reduce the tax levy required to balance the FY28 budget and fund certain other expenses, thus postponing an override.
Keveny’s Aug. 31 model projects increasingly larger gaps after FY28. Under its current assumptions, the town would need approximately another $2.7 million in levy capacity for FY29 and another $3.1 million for FY30.
Taken together, the potential additional levy capacity required, assuming no reduction in forecasted expenses and/or increase in other revenues over the three years is approximately $6.7 million.
No override question has been approved for the ballot, and the figures remain preliminary.
The Select Board asked Keveny to return with updated numbers after the School Department finishes revising its payroll projections following recent contract settlements. The board also asked for future presentations to show voters a clearer best-case and worst-case range.
Those updated figures are expected to be part of the next stage of discussion beginning with the Select Board’s Sept. 8 meeting.
The shrinking FY28 deficit has complicated the case for an immediate override.
At an Aug. 24 meeting, the Finance Committee reviewed a similar projection showing an FY28 shortfall of about $817,000 after a new actuarial report lowered Wayland’s expected FY28 contribution to the Middlesex Retirement System by about $363,000.
Several Finance Committee members questioned whether a gap of that size justified asking residents for a tax increase before the town demonstrated that it had reduced expenses where possible.
Member Bill Huss said residents could reasonably expect the town to “tighten your belt first.”
Brian O’Herlihy said he could support an override if it were part of a coherent multiyear financial strategy, but questioned the rationale for an immediate override simply to eliminate a relatively small FY28 deficit.
The Finance Committee has not recommended an override. That position puts the committee somewhat at odds with the direction being advocated by the School Committee.
At its Aug. 24 meeting, the School Committee prepared to ask the Select Board to initiate an FY28 through FY30 operating override. School officials have cited rising special education, transportation, health insurance and personnel expenses, while Superintendent David Fleishman has also described steps being taken to reduce costs.
Among them, the district consolidated preschool programs at Happy Hollow School, eliminated two associated administrative positions, reduced the school bus fleet from 16 buses to 13 and is reviewing vacancies to determine whether positions can be eliminated or filled at lower salary levels.
Fleishman told the Select Board on Aug. 31 that he expects the schools to employ fewer people in FY28 than in FY27.
The School Department’s final payroll projection remains one of the largest variables in the override calculation. The School Committee chose to hold off initiating the operating override process at the Aug. 31 meeting in order to provide its members time to evaluate the final payroll projection and its impact on the forecasted FY28 deficit.
Health insurance is another factor. Keveny’s working model assumes a 12% increase versus 14% back in June. New property growth is currently estimated in the model at $600,000, while the assessor’s preliminary figure has been closer to $370,000 through Aug. 15. The assessor’s preliminary figure, which will be finalized in the next couple of months, likely will increase based on past experience. The town’s debt-service costs also will become clearer after bonds are issued in November.
Those moving pieces help explain why estimates for the FY28 shortfall have changed so much since the override discussion began earlier this summer. The most significant assumption changes that moved the forecasted override from $2.5 million to $800,000 were an increase in FY28 forecasted Local Receipts of $1.15 million (based on FY26 actual local receipts, which exceeded the budgeted amount by $1.094 million, inflated by 2.5% over two years); an increase in FY28 forecasted new growth of $200,000 (i.e., $400,000 to $600,000) and an increase in FY28 forecasted state aid of $276,000 based on actual FY27 state aid inflated by 2.5%. The reduction in health insurance year-over-year percentage increase from 14% to 12% was offset by increase in the school payroll assumption from 4.5% to 5.0%. The change in new growth did contribute $200,000 to the reduction as noted above.
Select Board member Christopher Reynolds said the changing estimates create another problem: explaining the proposal convincingly to voters.
“We’ve really got a communications issue here to get something out that’s super clear and builds credibility,” Reynolds said.
Override, school issues separate
Adding to the fiscal picture is a proposed $2 million feasibility study connected with the School Department’s effort to enter the Massachusetts School Building Authority process for a major school building project.
For taxpayers, the distinction between that proposal and the operating override is important.
The Capital Improvement Planning Committee on Sept. 2 moved the $2 million feasibility study into its proposed excluded debt category rather than recommending that its debt service be absorbed within the regular property-tax levy.
Under that approach, voters would potentially face a separate ballot question. Taxes associated with excluded debt would remain outside the Proposition 2½ levy limit and expire when the borrowing is repaid.
An operating override works differently. The additional levy capacity remains available to the town in future years.
O’Herlihy estimated that borrowing $2 million over five years would require roughly $400,000 a year in principal payments made together with interest. Putting that expense inside the regular levy could therefore increase the amount needed for an operating override, beginning in FY29, and make that increase permanent.
The committee instead concluded that voters should be able to consider the school feasibility study under a separate warrant article at Town Meeting and a debt exclusion question at the ballot.
That means Wayland voters eventually could be asked to decide two different fiscal questions: whether to permanently increase the town’s operating levy and whether to temporarily increase taxes to finance the school feasibility work.
Neither question has yet been placed on a ballot.
What happens next
The central question facing town officials is increasingly not whether Wayland has a structural financial problem, but how soon voters should be asked to address it.
Town Manager Michael McCall has warned that postponing an override does not eliminate projected deficits and could result in a larger request later.
Finance Committee members, meanwhile, have argued that officials should first show voters what spending reductions are possible and provide a clearer long-term plan before asking for additional taxes. They have also noted that, over the past few years, a number of key budget assumptions, e.g., new growth, state aid and health insurance premiums, have proven to be too conservative.
The Select Board has indicated it would need to make a decision by roughly mid- to late October if it wants enough time for public education before a possible special election in early 2027.
For now, voters do not have an override amount or an election date.
The next numbers may be more important than the previous ones. Updated school payroll costs, state aid, and health insurance premiums for FY28 won’t be known until early 2027. New-growth revenue and November borrowing costs will determine whether the FY28 deficit remains close to $1 million or begins climbing again.
And that, in turn, will shape the question Wayland officials still have to answer: whether to ask voters for an override now, make deeper cuts first, or wait and risk facing a larger financial gap a year later.
