Northampton projects $1.3 million budget gap for FY27 as state aid falls

Select Board · Meeting of January 29, 2026

Northampton faces a projected $1.3 million structural budget gap entering FY27. Mayor Gina-Louise Shara and Finance Director Charlene Nardi presented the annual joint financial forecast to the City Council, School Committee, and Smith Vocational and Agricultural High School Board of Trustees on January 29, warning that known expenditure increases of $4.85 million outpace projected new revenue of $3.55 million before department budgets are even drafted. The governor's preliminary budget delivers a net state aid decrease of $333,547, with Chapter 70 school aid rising only $196,000 for both districts combined while state assessments climb $715,248.

The city has eliminated all capital funding from the FY27 operating budget and is projecting an aggressive $560,000 increase in investment income, even as Federal Reserve rate cuts have dropped the city's SOFR account rate from 4.92 percent to 3.73 percent. Federal grant losses loom over schools and city departments, with Title II, III, and IV grants totaling $119,000 already expected to be cut and a combined city-school exposure of roughly $3.5 million in federal funding at risk. School budgets are due to the mayor by April 16 and the full proposed FY27 budget must reach the City Council by May 16.

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Source: the Select Board meeting of January 29, 2026, reported from the official video recording and transcript.