NPS FY27 Budget Context State Level Considerations Similar to the last few years, school districts across Massachusetts are experiencing a “perfect storm” of fiscal challenges. ● Federal funding for pandemic recovery has expired. ● Any positions or programs funded through ESSER must be eliminated or supported with other funding. ● However, major expenses are rising significantly, particularly substitute services, utilities, and out-of-district tuition, as well as Health Insurance. ● Chapter 70, the largest source of state funding for schools, has not increased at a rate that keeps pace with inflation. ● The Circuit Breaker program is not fully funded. ● Local revenue is not increasing enough to make up the difference, unless voters are willing to support a Proposition 2½ override. ● This context is not a one-year problem. These pressures will be compounded in the years ahead. Local Newton Considerations
The Newton FY27 budget landscape includes five major consideration areas in keeping with the state budget landscape shown above and expounded upon below.
1. Growing & Complex Student Newton, along with all other Massachusetts communities, continues to cope with growing, and increasingly complex and persistent student needs, both in academics and in social-emotional health and well-being. These needs have only been exacerbated by the pandemic, increased isolation and interpersonal and emotional setbacks post-pandemic, and student needs and unfunded state mandates to meet them are growing, despite declining enrollment. 2. Benefit and Salary costs outpacing our revenue Health insurance costs have been rapidly rising across Massachusetts, and Newton is no exception. Historically, health insurance rates have risen annually at a rate of roughly 5.0%; in FY26, however, health insurance rates rose by 11%. We are now planning a 9% rate increase in FY27, for a total increase of approximately 20% over 2 years. The impact of these additional costs, as well as additional subscribers to our plans require the district to spend an additional $4.2M in health insurance costs over those in FY26’s budget. This represents an overall 9.8% increase for health insurance. Other benefit costs are anticipated to rise much less rapidly, save for Worker’s Compensation, which is anticipated to rise by 25% over FY25’s costs, and Medicare Part B, which has actually been steadily decreasing due to being slowly phased out over the past two years. Overall, all employee benefits costs are rising in FY26 by a grand total of $3.8M, or 8.9%. In addition to rising health insurance costs, Newton has the added budget pressure of its salary costs increasing, as is the case for many municipalities; indeed, many who have recently settled
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