Town projects multi-million budget deficits in five-year forecast

NORWELL — The fiscal year 2027 budget may be balanced ahead of town meeting, but the town is staring down a projected $16 million in cost increases by fiscal year 2032—and only $12 million in increased revenue.

Based on that forecast, Town Administrator Darleen Sullivan said that the town will need an override for fiscal year 2028.

The select board voted to approve the five-year financial plan Sullivan presented along with the forecast March 18, which includes transferring free cash to pay for employee benefits, raising rental and board of health fees, and a $3.5 million override that Sullivan roughly estimated would add $800 to the average tax bill.

“There is no way to get around it. I've done about 13 different models, and there is no way to get around at least this one override,” she said.

According to the forecast, the schools will be hit hardest by structural deficits in the coming years. If the school budget stays at roughly 30% of the total operating budget, its deficit is projected to rise steadily until it hits $4.7 million in fiscal year 2031, then drop down to $2.8 million the following year.

Expenses associated with South Shore Vocational Technical School are expected to rise from 458,000 next year to 737,000 in 2032, while expenses for Norfolk Agricultural School should make a smaller climb from 92,000 to 107,000 in that time period.

Debt and interest payments should spike from 2029 to 2031 at around $2.3 million each year.

Many shared expenditures, which includes payments owed to regional groups for services, are projected to rise significantly. The biggest jumps in that category are related to town employee benefits: annual payments to the Plymouth County Retirement Association are expected to grow from $5 million to $7.1 million over five years, then sink to $2 million in 2032. And health insurance costs, which take up $7 million in the current fiscal year 2026 budget, should reach $12.2 million in 2032.

The select board supported Sullivan’s plan to transfer $2 million in free cash to the Other Postemployment Benefits (OPEB) fund, which pays for town retiree benefits, during the fiscal year 2028 budget season. The town did not contribute any money to the OPEB fund this year and does not plan to in fiscal year 2027, so Sullivan said it needs a $1.9 million cash injection in 2028 before annual payments then drop off to $130,000.

The town already plans to raise various fees to balance the fiscal year 2027 budget without an override. And Select Board Clerk Lorenda Layne pointed out during the presentation that the town already made cuts from level services last year to balance the budget after a failed override vote.

No select board members opposed Sullivan’s assertion that an override in the next five years is necessary.

“We need an injection, guys,” she said, “but hopefully it lasts us a long time.”

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