Reading boards weigh $7.5M–$12M override as staff warn of deep cuts without it

Reading town leaders spent the bulk of the joint finance committee, select board and school committee meeting laying out FY28 budget options and an override strategy to close a growing structural deficit.

Town staff said the trimmed ‘level‑two’ operating budget would increase spending by 3.75% over FY27 while accommodating community priorities; keeping the schools at their requested level requires an extra $917,000. Sharon, leading the presentation’s slides, told the boards the proposed override range staff are modeling is between $7.5 million and $12 million, with different implications for free‑cash use and multi‑year regeneration.

"Our proposed level two overall budget is a 3.75% increase," Jane said during the presentation, explaining that level one represented department 'ideal' requests (near a 13% increase) and that level two reflected planned cuts to hit a more modest target. Sharon added that the town had negotiated health‑insurance plan changes expected to yield roughly $3.9 million in savings over three years but that health costs, software and new building insurance were significant upward drivers.

Staff presented a menu of community priorities that would be funded with an override: $35,000 for additional maintenance staff and custodians for new buildings; $125,000 in maintenance and another $125,000 to clean the Kellum building; $917,000 for schools to reach 5.25% funding; $60,000 to restore the police‑cruiser replacement line; $30,000 for elder/human‑services programming plus $10,000 for meals; and $200,000 to better cover police overtime.

Tax impact and free‑cash tradeoffs

Staff used an example average single‑family home value of about $944,000 and an FY26 average tax bill cited at roughly $10,148 to illustrate tax impacts: they estimated about $850 annual for an average home under a $7.5 million override and larger amounts for higher override levels. Jane and Sharon also walked through free‑cash scenarios: continuing current supplemental free‑cash use (cited around $6.475 million) risks depleting reserves below a 7% minimum and could jeopardize the town’s AAA bond rating, increasing borrowing costs by staff’s past estimate of more than $1 million in interest over the life of a loan in the event of a downgrade.

"If we use the $6.475 million free cash figure again, and then regenerate at a conservative $3 million per year, we'll be right at the 7% minimum reserves," Sharon said, adding that going below that threshold could materially increase borrowing costs and risk the AAA rating.

Services that could be reduced

Staff and committee members named concrete cuts that would be necessary under a no‑override scenario: switching weekly recycling to biweekly (estimated savings in the low hundreds of thousands), ending Sunday library hours (about $48,000), trimming police overtime and event details, reducing rodent mitigation capacity, pausing certain capital projects and, in the deepest cuts, staffing reductions across departments. Sharon emphasized the scale: cutting roughly $6 million could translate to dozens of positions when benefits are included.

Schedule and next steps

Boards debated single‑question versus tiered override approaches and asked staff for user‑friendly scenario tables that map tax impacts, years of coverage and the specific programs or positions returned at higher tiers. Jane said the select board could vote on placing a question on the November ballot but must file final language with the state in the first week of August (staff cited an early‑August filing window). She and other leaders outlined plans for public outreach, including a tax calculator, videos and meetings with boards and commissions to explain trade‑offs.

What was not decided

The meeting did not produce a final override number. Committee members asked finance staff to prepare scenarios with (a) a low override paired with a modest first‑year free‑cash contribution (examples discussed included $7.5M paired with $2.5M free cash), (b) mid and high tiers that would restore additional services, and (c) a clear list of what would be cut at each no‑override free‑cash floor. Select board consideration was projected for mid‑July; staff said Aug. 5 (first week of August) is the practical deadline to submit ballot questions for November.

Why it matters

Town staff described a structural gap driven by long‑term revenue limits and rising personnel and benefit costs. Committee members stressed the need for clear, simple messaging to voters about what an override would buy and what residents would lose if it failed. Several members recommended setting a practical finance‑committee position on how much free cash to use in year one so the select board can finalize a ballot proposal.