Hudson is facing the possibility of its first Proposition 2 1/2 override to balance its budget if officials can't come up with $850,000 or cut that amount of spending for the next fiscal year.
"You either cut services or you increase taxes," said John Parent, chairman of Hudson's Finance Committee. "Somebody is going to have to bite the bullet."
To maintain the current level of town services while also keeping up with inflation and other increased costs, such as fuel and health insurance, Executive Assistant Paul Blazar has proposed a $58.3 million budget for the next fiscal year, which begins July 1. It represents a 4.8 percent increase over Hudson's current $55.6 million budget.
The problem is, Blazar said, approximately $850,000 of the budget proposal isn't covered by the maximum amount of revenue the town can raise through property taxes under the Proposition 2 1/2 cap.
About $375,000 of the shortfall stems from the portion budgeted for Hudson's municipal operations, with the remainder earmarked for the school system. The shortfall might seem small compared with the millions of dollars the town and schools spend every year, but officials have few options to raise that extra money, said Blazar.
For the past few years, he said, state aid to Hudson has decreased or remained flat. Officials have made up for the lack of state funding by tapping reserve accounts. However, the town can't draw from that well again for next year.
"We've drained out all those resources," said Blazar. "We were lucky to have those resources. We were carefully saving up all those years. We were able to keep up an even keel until now, but now we're tapped out."
In addition, the town is expecting revenues from new businesses and other sources to decline somewhat next year because of the softening economy.
"New growth isn't quite what it was" in recent years, Parent said.
Hudson's residents have never approved raising taxes through a Proposition 2 1/2 override to pay for town or school operations. But they have passed debt exclusions, raising taxes for a set period of time to cover loans for large capital projects. In 2000, for example, voters gave the town approval to borrow $41 million for the new Hudson High School.
The Finance Committee will begin meeting with department heads next month to work on next year's budgets, and see whether they can pare down each department's budget enough to keep spending in line with revenue, Parent said.
Town Meeting members in May will vote on Hudson's budget.
Parent said he does not support raising taxes beyond Proposition 2 1/2's limits.
"In general, I'm against overrides," he said. "I think it's really incumbent on the town to really do some searching to try to avoid it."
Parent said he also thought an override should be avoided because voters next month are to decide on a proposed $4.4 million debt exclusion for the town's Senior Center. He supports the project and said fears of an operating-budget override shouldn't keep Hudson voters from approving it.
The Senior Center is now housed in the late-1800s Brigham family mansion on Church Street. The proposed renovation project would expand the building, add an elevator, remove mold and asbestos, and completely upgrade the electrical wiring.
"We've got an aging population," said Parent. "We're serving more and more seniors at the Senior Center. The services are expanding and they just don't have the room. Every capital project has its time. Just because you have some financial issues doesn't mean everything has to stop."
