On Tuesday, frustration was the theme of the night as the Manchester Essex Regional School Committee and school district officials wrestled with how to present an FY26 MERSD budget in a year with seemingly no options to avoid Proposition 2 ½ override votes in Manchester and Essex this spring.
The latest draft Fiscal Year 2026 MERSD budget of $32,397,588 before state and federal funding, represents a 5.42% increase from the FY25 budget. There are two other options under consideration, one higher and one lower. A final budget will be voted on by the committee on March 18 and then presented to the towns.
MERSD’s budget has increased between 3.5% and 4% on average in the last several years. There is still time to adjust budget line items, although many on Tuesday said incremental cuts will do little to stave off Proposition 2½ overrides in both towns that are needed to financially reset the district.
Until this year, the district has been able to skirt budget emergencies that have plagued other school districts such as Gloucester, Marblehead, Beverly, and Brookline. That’s because for the last several years, MERSD has squeezed its “rainy day” reserve funds to plug the budget gaps. But this year that strategy was largely thwarted by a surprise 27% jump in healthcare insurance expenses that hasn’t changed, despite shopping the plan to different carriers. The proposed budget would cover the health insurance bump by using $500,000 from the E&D reserve fund (cash on hand), using $150,000 from OPEB (retiree pension benefits) funds, cutting two administration positions, and shifting some high school teaching positions.
Other Key FY26 Proposed Budget Highlights:
Personnel Costs: Approximately 61.24% of the budget is allocated to personnel salaries, reflecting a 4.31% increase from FY25. This includes a 2.5% cost of living adjustment (COLA) for non-union employees.
Special Education: Projected costs for special education tuition and transportation are expected to decrease slightly, with anticipated savings of $50,000 in out-of-district tuitions and a reduction of $101,382 in transportation needs.
Tech Expenses: Software costs have increased by 100% ($178,619), attributed to upgrades, shifts to cloud-based solutions, and the expiration of COVID-era grants.
Revenue Sources: The district plans to use $500,000 from reserves and expects a $100,000 increase in revenue from expanding the school choice program, accepting an additional 20 students for the 2025-2026 school year.
Town Assessments: The operating assessment for the towns is proposed to increase by 4.93%, with Manchester’s estimated contribution rising by 4.48% ($731,623) and Essex’s by 5.68% ($561,395).
Staffing Adjustments: The budget includes the reduction of two administrative positions, reallocating resources to preserve two full-time teaching positions. These teaching positions will address needs at Memorial School and in the middle school world language programs.
Tuesday's meeting followed a larger one last week between the Finance Committees and Select Boards of both towns who met in Essex with the School Committee and town administrators. The topic? Whether a multi-year strategy is needed to right the financial ship.
School Committee member Jake Foster said in that meeting, town officials asked for three major things from the district. First, they want the district to continue use of any reserve funds over 8%; second, they have requested a lower annual budget that doesn’t impact the quality of education; and finally, they are seeking a change to a “zero based” budgeting process starting next year.
The biggest source of debate came from the second request — to lower costs while maintaining quality. This felt like an impossible ask to many on the school committee.
“This is what it costs for this district. Asking the district to do more with less money isn’t practical, and it’s not right,” said committee member Theresa Whitman. Her comments triggered clapping from the audience.
“I support a carry forward level services budget. We can’t wait another year,” said the committee’s John Bineiris.
“This is not a Manchester Essex school district problem. School districts across the country are in crisis,” said Erica Spencer. “We have to recognize how much costs have skyrocketed. This time it’s administrator cuts. Next time it will be educators.”
But, avoiding overrides in both towns would require about $2 million in budget cuts. That means there can be no half-measure scenarios, said Beaudoin. It’s either cut everything to satisfy the towns and live with the consequences, or stand for the budget that delivers the education the district currently offers.
“We’re all adults. All the time and energy we expend to create a good (educational) product could go away in a heartbeat,” she said.
“The truth is,” said Foster, “we can’t solve this problem ourselves. We have to work with the towns.”
But is there a path from where the district budget is now to approving something that avoids $2 million in cuts? “We don’t have a smooth path,” said Spencer.
“I wish there were,” replied Whitman.
The School Committee meets next on Tuesday, March 18, when it plans to finalize the budget and determine how to approach voters in Essex and Manchester. Once that is complete, each town will have to mull over exactly what that means for Proposition 2 ½ overrides.
