EASTHAMPTON — Unlike neighboring communities struggling with significant funding gaps for next fiscal year, Easthampton is heading into fiscal year 2026 on solid financial footing that will enable it to avoid layoffs or wage cuts.

Mayor Nicole LaChapelle’s proposed budget for next fiscal year, which begins July 1, is $62 million, up 8.44% from this year’s $57 million budget.    

“This is what I call the landing of the plane budget,” she said, crediting strategic fiscal policy changes for the city’s ability to maintain level operations in what will be her final budget as mayor. LaChapelle will not seek another term this fall.

The budget’s efforts are trained on hedging against rising costs across the board, aiming to maintain services and staffing. Following trends in other municipalities throughout the region, two major factors in Easthampton’s increased expenses come from an 18% rise in health care costs and growing needs around special education and transportation. The city also anticipates increasing costs to various goods and services as a result of international tariffs, as well as continued increases in energy costs. 

While this past year’s budget focused on hedging against inflation, the fiscal 2026 budget aims to maintain services and positions once again while confronting increasing costs and needs in the community. 

“In Fiscal Year 2025, we focused on managing inflation, raising wages, and controlling expense budgets, strengthening our financial position,” LaChapelle said in her budget letter. “Over the past two years, grants have allowed us to free up funds in the General Fund and for Capital Expenses.”

The city’s largest revenue source, property taxes, are expected to bring in $35.5 million, with the value of new growth budgeted at $300,000. State aid follows property taxes as one of the larges sources of revenue for the city – usually about 20% of annual revenue – and final state aid amounts will be known when the state budget is signed.

According to the budget letter, general fund expenses are continuing to rise, but the city is maintaining steady reserve levels. Additionally, as of December 2024, Easthampton’s retirement system fund stands at over $81.6 million, up more than $6 million from the previous year. This fund is on track to be fully funded by 2032, and the city has also maintained its AA+ bond rating. 

“This year is no exception to any other in my tenure in that my FY2026 budget reflects the values of Easthampton, informed by high resident engagement, dedication of municipal employees and the public service of our appointed and elected officials,” wrote LaChapelle.

While many neighboring communities struggle with layoffs and service reductions, LaChapelle said the relatively smooth sailing experienced in Easthampton is due largely to fiscal policy changes that have been taking place over recent years. In particular, LaChapelle and other officials have been aiming to craft more “predictable” processes for budgeting, procurement and more, which remain stable even with changing dollar amounts.

“What you see today has been in the works for … six years, and we were fortunate enough to land the plane,” LaChapelle said. 

These policy changes were challenged by the fiscal pressures of the COVID-19 pandemic. While American Rescue Plan Act (ARPA) funding provided some reprieve, LaChapelle said “it was really challenging not to spend that money as if we would always have it,” but the city did so successfully, offering more long-term stability. 

School budget

Per usual, the education budget dominates fiscal 2026 spending, totaling $22.8 million, or 36.78%, of the total budget. This budget maintains level services with a 10.25% spending increase over the current year, and will not present the district with any layoffs. 

While the district is avoiding cuts to staffing like those which have been raising concern in neighboring school systems, school committee members explained during budget negotiations that they are still expected to experience “flat” state assistance in the form of Chapter 70 funding. For fiscal 2026, Easthampton schools are slated to receive $8.9 million in Chapter 70 funding, an increase of roughly $117,000 from this year, which School Committee members said is not enough to keep up with rising costs and needs. 

Concerns were also raised about uncertainty around federal funding for school programs such as free school meals. 

“This is not a hugely aspirational budget,” said School Committee Chair Laura Scott during the March budget presentation. “This is a level service budget.”

The school district is also experiencing the enrollment declines which have been felt across the state. Since the onset of the COVID-19 pandemic, enrollment has dropped by more than 170 students, while the number of students identified as having “high needs” has increased since then. Unexpected jumps in special education costs and out-of-district transportation resulted in a $1.1 million budget deficit in fiscal 2025. 

No layoffs, maintain wages

Across city departments, LaChapelle maintained her directives from last year’s budget: no layoffs or reductions to wages.

Budgeted expenses are split into 10 categories: general government, public safety, education, public works, human services, culture and recreation, debt, unclassified, community preservation act, and enterprise. Among these categories, all but general government spending are slated for increases. 

General government, which includes the City Council, mayor, city attorney, licensing officials, assessors, auditor, treasurer and central purchasing, technology, collector, human resources, city clerk, elections and registrations, planning, and building operations, is proposed to experience a 0.4% decrease in spending over the current year.

In the proposed budget, public safety will receive $9 million, a 6.6% increase over this year. This budget category includes the Police Department, Fire Department and ambulance, dispatch, and building inspection services.

Public works will receive $2.4 million, which represents an 8.6% increase over this past year. This category includes the Department of Public Works, cemetery and tree warden. 

Human services, which includes the Health Department, Council on Aging and veterans services, will receive a 4% increase over this past year, coming in at about $867,000. 

Culture and recreation, which comprises the Easthampton Public Library and Parks and Recreation, will receive about $817,000, a 5.7% increase over this year. 

The unclassified section of the budget comprises contributory retirement, workers compensation, Medicare, employee benefits, liability insurance, reserve funding and unemployment. This section of the budget is proposed to receive $12.8 million, which would be an 11.5% increase over the current year. 

The Community Preservation Fund is slated to receive about $811,000 in the proposed budget, a 0.9% increase over this year.

The enterprise fund, which covers water, sewer and wastewater expenses is proposed to receive a 7% increase in funds over this year, totaling $3.4 million. 

The city will spend $5.5 million to cover debt and interest with this proposal, which is 6.6% more than this past year. 

The City Council will vote on this proposed budget in June. The fiscal year ends on June 30. The fiscal 2026 budget book, financial policies and other supporting documents are available on the city’s website at easthamptonma.gov. 

Alexa Lewis can be reached at alewis@gazettenet.com.