DRACUT — The Board of Selectmen heard a chilling forecast about the town’s finances as Town Manager Ann Vandal laid out what may be ahead beginning in fiscal 2025. Without a long-term solution, Dracut faces years of projected budget deficits, she told selectmen.
And these continuing deficits would have “devastating” consequences for all town departments, Vandal told the selectmen at the board’s Nov. 21 meeting.
The town faces a potential deficit of $2.1 million in fiscal 2025 with mounting increases in the deficit coming in succeeding fiscal years.
She presented selectmen with a “hypothetical solution” that would assess trash and stormwater fees and/or a Proposition 2 ½ override.
Vandal first gave the deficit estimate at a joint meeting of the selectmen, School Committee and Finance Committee last spring. She emphasized, however, the figure could change when the state determines what it will give municipalities in local aid.
The $2.1 million figure has come up several times in the intervening months, with some School Committee and Finance Committee members pushing for more certainty about what the state will provide. That won’t come until January, so the final deficit figure could be different.
Her report at the most recent selectmen’s meeting came after months of working with Assistant Town Manager/Finance Director Victor Garofalo to look for potential answers to the financial problem.
“We have scoured the budget, every line item is getting a detailed review and reductions will be felt in every department with the absence of additional revenue sources,” Vandal stated in her report.
Inflation is largely responsible for the deficit in fiscal 2025, which begins next July 1, with some impact coming from the state’s net school spending mandate.
Vandal reported, “Inflation is the main culprit; we, as well as other communities, are experiencing increases that are unheard of. We are also seeing a shift in net school spending of approximately 8% per year, causing the Town’s obligation to meet NSS to increase, resulting in tremendous pressure on the budget for all town departments.”
Across-the-board budget cuts might solve the deficit issue at least for a time, but would have sweeping consequences.
The consequences, as Vandal outlined them, would include reducing staffing levels in every department; limiting office hours; eliminating programs in various departments; freezing efforts to build staffing levels in the police and fire departments; and curtailing services at the library, Council on Aging, Recreation Department, Town Hall and the Department of Public Works.
“With the assumption that the Board of Selectmen are not in favor of any new fees or an override, the above cuts would be re-visited and likely would be more devastating to all town departments for [fiscal 2026] and beyond. A significant number of services will be negatively impacted and will be felt by the residents. In other words, unless there is a permanent solution, the deficit will continue to plague the budget for many years,” Vandal said.
She has been in touch with town managers in other communities in the region. Their budgets are also feeling the impact of inflation.
But their problem may not be as serious as Dracut’s. Town Meeting voters here have three times rejected Proposition 2½ overrides. But voters in other towns have supported them.
Selectmen Joe DiRocco recalled past efforts to increase the tax levy. “And it went down to defeat three times,” he said.
Vandal responded, “The demographics in town have changed.”
Vandal’s report did not include the impact that proposed developments like Murphy’s Farm in East Dracut would have on the budget; nor did it include the possible construction of a new school in East Dracut already working its way through the Massachusetts School Building Authority’s process to receive funding assistance.