GREAT BARRINGTON -- Town Manager Liz Hartsgrove unveiled plans to propose a budget with no new borrowing as she works to address the town's financial "sustainability crisis."
The preliminary budget is dominated by the town's share of the regional school district budget, which accounts for just over 56 percent. The town's operating budget makes up roughly 42 percent.
In a joint meeting with the Select Board and the Finance Committee, Hartsgrove, Town Accountant Allison Crespo and Assistant Town Manager Chris Rembold presented a budget forecast for fiscal 2027 that focused on long-term financial sustainability and addressing the Select Board's priorities.
"The goal is to move beyond year-to-year decisions and focus on long-term financial health," Hartsgrove said.
About 19 percent of Great Barrington's operating budget is dedicated to paying off existing loans, which is well above the recommended 5 to 7 percent municipalities should spend on it. With so much of its $16.6 million operating budget going toward loan payments, the town's bond rating has dropped to AA+, and taking on additional debt could lower it further, which would make borrowing more expensive.
"It's not sustainable," Hartsgrove said. "It's just not, and we're not at the point with our levy limit only a little over $500,000; we have no capacity right now, so we have to put the brakes on right now."
As a result, Hartsgrove plans to halt new borrowing for most projects and instead shift to a "pay-as-you-go" approach. Under that model, the town would use free cash, which are leftover funds from previous fiscal years, and grants to pay upfront for expenses such as road repairs and equipment.
"We can do it," Hartsgrove said. "We have the ability to do it."
For the past five years, the town has relied on free cash to lower the property tax rate, which has resulted in a growing gap that the town can no longer afford to ignore. This practice has created a structural deficit that has a projected $5.5 million gap for Fiscal 2027.
Hartsgrove issued a blunt professional recommendation against continuing this cycle, stating, "You cannot do it anymore," as it merely "pushes off" the debt while the gap grows larger each year.
She described this as a way to "stop the bleed immediately" and create a "blank slate" to fund the town properly and strategically. This move would shift the town away from "borrowing from the future" to balance its current books.
The Department of Revenue told Hartsgrove the town has the legal ability to propose a Proposition 2 1/2 override this year, which would increase the town's property tax levy beyond the state's annual 2.5 percent limit. But it's up to the residents to approve the override.
Without it, Hartsgrove's scenario budgets include zero cost-of-living adjustments for town staff, potential reductions in the workforce, and the removal of funding for community celebrations and veteran organization leases.
The pile of free cash isn't as big as it looks, as about half of the $11.2 million is reserved for cannabis-related legal risks and can't be used for the general budget.
The town will still have some borrowing on the budget, which is outstanding debt it is legally obligated to borrow, including $728,620 for past projects that exceeded their original budgets and $1.2 million for wastewater projects that will be repaid by sewer system ratepayers.
Looking ahead, Hartsgrove said she hopes to reserve borrowing for large, multiyear investments, such as major renovations to Town Hall or the purchase of a new fire truck.
The Select Board and Finance Committee will get the completed proposed budget Feb. 13 and a public hearing for the budget and proposed Town Meeting warrant articles will be April 14.