Hanover Officials Outline Cautious Financial Forecast

HANOVER – Hanover officials are projecting modest revenue growth for the next fiscal year as inflation, rising costs, and state funding uncertainty weigh on the town’s long-term budget outlook.

At the Oct. 6 Select Board meeting, Finance Director James Hoyes presented a multi-year financial forecast covering fiscal years 2026 through 2032, detailing anticipated revenue trends, expenses, and potential deficits.

Hoyes said total revenues are expected to increase between 2.75 and 3.25 percent, consistent with limits under Proposition 2½. Roughly 94 percent of Hanover’s revenue comes from property taxes, he said, with excise taxes and state aid projected to grow around 3 percent. Non–property tax revenues, such as meals tax and interest income, are expected to decline.

On the expense side, Hoyes said several fixed costs continue to outpace revenue growth.

“The Plymouth County retirement is projected for fiscal year 27 at just under $6.5 million,” he said. “The same thing with health insurance at just under $4.7 million… both are in the 7 percent growth range.”

Select Board member Steve Louko asked whether the town could consider amending its retirement funding approach to ease future pressure on the operating budget.

“Is there any ability to revisit how the retirement assessment is structured?” Louko asked, noting the sharp year-to-year increase in the town’s obligation.

Hoyes said the Plymouth County Retirement Association has a set payment schedule and that altering it would require a broader change affecting all participating communities.

“We don’t have much flexibility,” Hoyes said. “The schedule is determined by the county system, and any amendment would need to come through them. Our focus is managing within the parameters we’re given.”

Hoyes noted that other line items, including property and liability insurance and unemployment compensation, are also rising. Those increases, he said, will likely put pressure on departmental budgets and contribute to operating deficits in the next few years.

Hoyes projected a $908,000 deficit for fiscal 2027, followed by a $1 million gap the following year, even with departments keeping expenses within set growth limits.

“I’m not an advocate of using free cash to cover particularly recurring expenses,” Hoyes said, “but those are probably digestible if free cash comes in at historical levels.”

He also said that while Hanover is aiming to avoid an override through fiscal 2032, the town must plan carefully when deciding how to use its excess levy capacity and free cash reserves.

Hoyes said the town will refine its projections as more data become available from the state and local departments in the coming months.

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