The budget and the potential for an override were prominent at the November 2, 2023 Acton-Boxborough (AB) School Committee meeting, the November 6, 2023 Acton Leadership Group and Select Board meetings, and the November 7, 2023 Acton Finance Committee meeting. Health care costs for both Town and School personnel were discussed at the aforementioned meetings and were a major factor in budget shortfalls.
Finance Committee member Steve Noone reviewed health care costs at the Nov. 6 Select Board meeting. Acton and the AB Regional School District self-insure through a Health Insurance Trust (HIT). The HIT, like commercial insurance companies, buys re-insurance to cover rare large claims. The collective number of insured people is large enough that in past years, claims history has been an adequate predictor of future costs.
Mr. Noone reviewed several factors that have led to unanticipated expenses. There was reduced health care utilization during the Covid pandemic, followed by a post-pandemic surge; and after years of relatively stable prices, the recent increased inflation continues to raise medical costs. Advances in medical biology have produced treatments of astounding and unprecedented efficacy, but those treatments have unprecedented costs. The HIT has had large claims that have not been completely covered by reinsurance. Although alternatives for medical coverage of Acton and the AB Schools are being explored, the present costs must be handled in the current and next fiscal years and that may require higher costs for covered personnel.
At the Nov. 2 School Committee meeting, School Superintendent Peter Light gave a detailed description of increased expenses for the Acton-Boxborough Regional School District. Emphasizing that the model was not a budget proposal, Mr. Light presented a ‘level services’ model that showed what revenue would be required to maintain AB Regional School District services at the present level. Mr. Light showed dramatic cost increases in personnel, health insurance, special education tuition and transportation, and other factors. In summary, Mr. Light said, “Our expenses are projected to exceed revenues by about $7 million.” (See a related article about the November 2 School Committee meeting, written and published by the Boxborough News. Visit Boxborough News to subscribe to that free, weekly newsletter published each Friday.)
At the Nov. 6 Select Board meeting, Town Manager John Mangiaratti presented a level service estimate for the town. Although Mr. Mangiaratti did not provide an explicit bottom-line deficiency, he listed a number of increases to fixed costs including replacing the Department of Public Works fueling station and funding the ongoing ‘Other Post Employment Benefits’ (OPEB) account. Other anticipated costs include replacing a 2009-vintage Fire Department ladder truck; prompt authorization of that replacement is desired due to 3-year build time. As costs are prioritized, ‘nice to have’ vs. need to have’ evaluations will be debated. The Town Manager’s recommended budget is scheduled for presentation on December 18, 2023.
The upcoming apparent budget shortfall has led to discussion of raising Acton’s property taxes, which provide the majority of the town’s funding. Proposition 2-1/2 limits annual property tax increases to a maximum of 2½ percent, unless the town votes to ‘override’ the limit. If town management deems it necessary to come to the voters with an override request, the Finance Committee will be asked for their opinion.
The Finance Committee discussed the possibility of an override at their November 7 meeting. Committee members noted that in the past, when the possibility of an override was foreseen, town residents–potential voters at Town Meeting–were alerted to that possibility, and were kept informed about the reasons for the requested override. Committee members wanted to understand the amount of a potential override, and to project the duration of the fiscal margin an override would provide, and seemed frustrated by the lack of definitive numbers at this stage of the financial planning cycle.
Tom Beals is a volunteer reporter from Acton. He thanks Ms. Diane Baum for a critical reading and helpful suggestions.
