HUDSON – Superintendent Brian Reagan presented a very early forecast for the fiscal year 2026 budget for Hudson Public Schools at the School Committee’s July 16 meeting.
The slides he reviewed with the School Committee represented topics that needed to be considered while preparing for the budget. Reagan used the term “structural deficit” to describe the current conditions of the budget planning, which means that the operating costs exceeded the available revenue.
“But there’s different ways that we can reduce and try to maintain programs,” said Reagan.
To minimize any potential staff reductions, the district would work to identify operational savings through consolidation or other methods, he said.
Reagan said, “Where we’ll probably end up is considering staffing.”
He noted that presently the school district projects a $4.4 million gap for 2026. He said the gap could increase each year, going from $4.9 million in fiscal 2027 to $6.4 million in fiscal 2030 if they assume a 2.5% annual town appropriation.
With a 3.5% annual town appropriation, he said the schools would get $500,000 in additional local funding to close the gap.
In this scenario, Reagan said, “We would be in good shape.”
He said they want to be thoughtful about a possible Proposition 2 1/2 override and not be “digging a hole again over time.” A passing ballot by the Hudson voters would be necessary to approve such an override.
He noted that Director of Finance and Operations Dan Gale has “a multiyear fiscal projection document” to plan the budget.
Reagan said, “Today we started to sort of flush out this idea of level service budgets versus reduction budgets.”
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They are starting to “put down on paper” what some of the main budget assumptions will be with a level service budget, he said. In addition, there have been efforts to project assumptions for the budget should an override fail as a good solution.
Looking forward, he said the focus is “what’s the fiscal plan.”
As they cannot operate the budget with a $4.4 million reduction, Reagan said, “There’s going to have to be something from stabilization with the town side to help minimize that gap. So we’ll have to have those conversations ahead of time.”
He said they have to be clear with everyone of the fact it is “not feasible” to operate the budget with such a deep reduction and to reduce staff to the point that services are not being maintained.
School Committee member Christopher Yates proposed a hypothetical scenario – if the town had $8 million in a stabilization fund, and the school district used $1 million of that for next year, it would be committed for only that fiscal year. Furthermore, he questioned how to figure that in since the effect is to have an automatic gap for $1 million the year after that.
Yates said he believed an adjustment to the override by at least $330,000 per year over three years could be considered.
Gale noted that Yates’ scenario would occur if a hypothetical override failed.
Reagan said the school district would need help from the town finance office to continue to “do business” in a responsible way. One such use for the stabilization funds could be to fund the Special Education Stabilization Fund, which was approved several years ago, with town stabilization monies.
He noted that with School Choice not being there as a consistent funding source, it would be smart for the town to consider moving an amount of funds from stabilization to the special education account.
That would require two official votes by the School Committee and Select Board, Reagan said.
