Hanover officials began shaping the town’s fiscal year 2027 budget last week with a clear message to residents: the goal is to stabilize tax increases while managing rising costs that continue to pressure municipal finances.
During a detailed Select Board discussion, Budget Director James Hoyes and Town Manager Joe Colangelo walked members through tax trends, reserve use and enterprise fund projections that will guide budget decisions ahead of the May annual town meeting.
Hoyes said Hanover’s fiscal 2026 tax levy has now been finalized at just over $59 million, providing the baseline for next year’s planning.
“That’s the tax levy that’s hitting everyone,” Hoyes said.
He noted that the average single-family tax bill in fiscal 2026 was just over $10,000, reflecting a 5.7 percent increase that came in slightly below earlier projections tied to last year’s override vote.
Colangelo said the town’s ability to manage increases over time reflects a consistent pattern of conservative budgeting.
“We have historically had very sound budget management practices,” Colangelo said. “Every year we’ve managed so that revenues come out well ahead of what was budgeted.”
A central focus of the discussion was how Hanover plans to use its excess levy capacity, which Hoyes said totals about $1.85 million. Rather than drawing it down all at once, officials are proposing a multi-year approach.
“The objective here is to use this in a sustainable way that moderates property tax increases over the next two to three years,” Hoyes said.
Under current projections, Hoyes said the strategy could keep tax increases near 4.5 percent annually in the near term before dropping sharply once major debt exclusions expire later in the decade.
“That’s great news for residents and businesses,” Hoyes said.
Select Board member Vanessa O’Connor pressed for clarity on how that drawdown would work over time, particularly once excluded debt rolls off.
“The reason fiscal year 30 is [by then] we’ve used it all,” Hoyes said, adding that the debt drop-off reduces the need for additional tax increases.
Officials also reviewed department-level spending targets, which cap municipal budget growth at 2.25 percent and school spending at 2.75 percent. Hoyes said meeting those limits was challenging.
“It’s not going to give, by any stretch of the imagination, any fat in any of these numbers,” Hoyes said. “They’re on a razor’s edge for fiscal year 27 to deliver what their service level expectations are.”
Enterprise budgets were another key area of focus. Hoyes said the town is aiming to limit water rate increases to 3 percent by using retained earnings to offset higher operating costs tied in part to increased testing requirements.
“We wanted to keep [the] water rate increase at 3 percent and not have it go to the full amount,” Hoyes said.
He also outlined the town’s use of PFAS settlement funds, noting that Hanover has received just under $1.3 million so far.
“These are designated uses,” Hoyes said. “They need to be used for PFAS related actions.”
The transfer station enterprise fund drew significant attention, particularly after the town expanded operations from three days to four days per week following stronger-than-expected permit sales.
“There was more pushback on three,” Hoyes said. “Just really the customers’ request and demand.”
Hoyes said permit revenues have exceeded expectations, though expenses have risen with the added day of operation. Even so, he said the town’s pricing remains competitive with private haulers.
“We’re kind of competing with private enterprise versus just going about our business as a municipal department,” Hoyes said.
Board Chair Rhonda Nyman said the presentation helped clarify the tradeoffs facing the town as it balances affordability with service demands.
“I think [it is] very well laid out,” Nyman said.
Officials said the budget will continue to evolve in the coming weeks, with refinements expected before the town manager submits a formal proposal in early February.
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