SOUTH HADLEY — Facing a $2.3 million budget gap for the coming fiscal year, government and school officials agreed this week to head back to the drawing board to craft a spending plan that adequately meets the town’s needs.

“I think what’s keeping us up at night now is that we are not quite sure that our $57 million budget is exactly in line with what the needs are in the community,” Town Administrator Lisa Wong said Tuesday at a Tri-Board meeting of the Select Board, School Committee and Board of Appropriations.

Wong said she and Jennifer Voyik, assistant superintendent for finance and business operations, “probably cried for half a second when we looked at the governor’s numbers, but then we got really excited and we said this is an opportunity.”

Based on Gov. Maura Healey’s budget released in January, state aid will increase only $26,000 in fiscal 2025, which begins July 1. That’s down from the previous two years, when the town received a $1.4 million increase in fiscal 2023 and a $1.2 million increase in fiscal 2024. Wong points to declining state revenue as the main factor in the sharply reduced increase in state funding.

The $2.3 million deficit includes a $1.2 gap in school district operations and $1.1 million in the town operations budget, of which $500,000 is debt for capital projects.

Among the changes already identified is a reorganization of government that merges three departments — the Council on Aging, veterans services and recreation — into a new human services department.

In addition to that new department, which will centralize the office functions of those departments, the town and schools will look at other ways to cut spending through reorganization and consolidation of staff and records. Wong cautioned, however, that layoffs are possible. Details about layoffs won’t be known until this process plays out.

“Those (layoffs) are really hard, hard decisions,” she said. “But we also know we have a big constituency to serve. We have the students, we have the public, we have people in the community who aren’t as engaged, and they need more of what we can have to offer.”

Steps underway

Wong, Voyik and interim Superintendent Mark McLaughlin walked the Tri-Board members through steps they are taking as they examine cuts.

In addition to digitizing employee records, files and handbooks, both the town and the school are updating job descriptions based on current criteria. McLaughlin said most of the district’s job descriptions were last rewritten 10 years ago despite responsibilities of staff shifting drastically during and after the pandemic. Voyik said the committee hopes to finish job descriptions by the end of the school year.

“I mentioned before about job descriptions; we’re working to refine and review all of our job descriptions to make sure that they’re up to date to what is actually being done by each of those positions in the school,” Voyik said.

The same work is being done in town offices, Wong said.

In both cases, the results will help officials identify responsibilities that overlap between jobs and positions that can be consolidated.

A large part of the town government’s reorganization is the creation of the town’s first wage system for employees. Wong said both union and nonunion employees have no sense of their professional development nor wage structure because the town currently has no system to classify government positions and determine pay.

“If you think about the past 10 years, and you ask people who was paid what and why, and what are they being paid next, you would have none of those answers,” Wong said.

The earliest Wong can release a full wage and classification is end of the fiscal year, but implementation of the plan will happen slowly over time.

Emilee Klein can be reached at eklein@gazettenet.com.