ORANGE — The town’s approved budget is now nullified, and the Finance Committee anticipates elementary school staff will lose their jobs with budget cuts coming this fall.
Furthermore, the town will have very little free cash to balance the budget next year, and is starting the next budget cycle “in a hole,” said Finance Committee Chairman Keith LaRiviere.
This is the fallout from the failed Proposition 2½ tax override vote Monday.
“I’m more than a little disappointed,” LaRiviere said.
A Proposition 2½ tax override is a state statute that allows towns to raise more money than is normally legally allowed through real estate and personal property taxes. It has to be passed as a ballot question in an election, and, with Orange’s revenues falling about $500,000 short of funding its budget, the town held such a vote Monday.
The override vote failed overwhelmingly, with 676 opposed compared to 295 in favor. People exiting the polls said they voted against the override to prevent the town from raising their taxes, while those voting for the override said they wanted to support the town, particularly the schools.
Now, a Special Town Meeting has to be scheduled so that the town can balance its budget for this fiscal year, which began July 1. Because of the override vote failing, the budget residents passed at the Annual Town Meeting on June 17 is nullified.
That budget was $21,353,712 and, although it passed, it was contingent on a successful Proposition 2½ tax override that would allow the town to raise an additional $513,972 through real estate and personal property taxes.
The $513,971 gap must be closed. According to LaRiviere, the town will likely use $250,000 from its “free cash” account, make small cuts to town departments’ budgets and halve the elementary schools’ budget increase over last year to present a new, balanced town budget at a Special Town Meeting this fall.
That meeting probably won’t happen until October, LaRiviere said, because the town needs to wait for the state’s Department of Revenue to certify its free cash for usage, which doesn’t typically happen until September.
Until the balanced budget is passed at Special Town Meeting, LaRiviere said town departments will likely watch their spending closely.
“The thing we have to be concerned about is not overspending in any account until the budget is in place,” LaRiviere said. “All departments, I suspect, will be watching their numbers pretty carefully. I suspect the department heads will probably be adhering pretty closely to their budget numbers from last year.”
LaRiviere and the rest of the Finance Committee had recommended Monday’s override for passage, with LaRiviere saying this was the year to “bite the bullet” after several years of cutting into departments’ budgets to fund ever-increasing education costs.
He said he “couldn’t have predicted whether or not it would pass,” but was surprised the override failed by such a large margin.
For now, it’s looking like four or five staff at the town’s elementary schools will be losing their jobs due to the impending cuts. School Committee member Alex Schwanz previously told the Finance Committee the cut staff would mean increases in class sizes, particularly in the higher grades.
The School Committee, Schwanz said, would prefer not to increase classroom sizes in younger grades due to difficulties with student behavior in the kindergarten and first grade this past school year. There could be 25 students per class in the fourth through sixth grades, as opposed to 22 or 23 currently, Schwanz said.
Leading up to the override vote, much of the discussion at School Committee, Selectboard and Finance Committee meetings centered on the schools, which asked for an additional $600,000 this year due to hiring 11 new staff in the middle of the school year — paraprofessionals, teachers, a guidance counselor — to help curb student misbehavior at Fisher Hill Elementary School.
The mid-year hires were criticized as lacking transparency by members of the Selectboard and Finance Committee, and the requested budget increase from the schools was halved to $300,000. Now that the override vote has failed, that number will likely be halved again, to only a $150,000 increase for the elementary schools over last year.
“That ($150,000) apparently is not enough to maintain all of the positions they hired in the middle of the year,” LaRiviere said. “We anticipate lost positions.”
The override failure will likely affect the town next year, too, LaRiviere said. Free cash, the remaining unrestricted portion of the town’s funds, is projected to be $268,926.81 for Orange. With $250,000 to likely go toward balancing the budget, very little will remain to bail out the town if needed next year.
“It won’t be exhausted, but we’re not going to have a lot of free cash next year to balance the budget,” LaRiviere said.
“I would characterize it as ‘We’ll probably be starting out in a hole,’” he added. “I would not be surprised if we are recommending another override next year.”