PEABODY — Members of the School Committee, Mayor Ted Bettencourt, and Superintendent of Schools Dr. Josh Vadala convened for a fiscal year 2025 school budget meeting at Higgins Middle School. At the meeting, they discussed necessary reductions in operating costs and proposed changes to funding sources due to significant decreases in state aid and the expiration of Elementary and Secondary School Emergency Relief funds.
Bettencourt prefaced the meeting by acknowledging that “this is going to be a tough budget.”
“Definitely some increases that were expected and others that were not expected,” Bettencourt said.
Bettencourt said that one of the biggest increases is a 9.95% increase in health insurance, which represents a $1.5 million increase.
“That is the largest, by far, that’s ever hit me in my years as mayor,” Bettencourt said.
Bettencourt also noted that Chapter 70 funds that come from state aid are significantly less than those from last year and the year before.
“It really put stress on our department heads, Dr. Vadala and his team, and we’re just trying to work through that,” Bettencourt said.
Bettencourt clarified that the state is still working on its final numbers, but said school officials are anticipating a significant decrease in state aid.
For the first tier of reductions, to address the increase in health insurance, Dr. Vadala proposed reducing the health-insurance line item by $371,000, which will be offset by having employees who are paid through revolving accounts that generate revenue have their health insurance paid for by the same accounts.
“We feel like that’s something we can do and we’ve identified the funding sources for that,” Dr. Vadala said.
Dr. Vadala also proposed eliminating a new, $250,000 line item that is supposed to act as a safety net for costs that are normally not budgeted for, such as teacher severances and other increases, but have not been used in the past. He said the safety net would have been nice to have, but said the district is not in the financial position for it.
“We’ve been OK with the way we’ve done business, so we would eliminate that line,” Dr. Vadala said. “That just wasn’t in there last year.”
Dr. Vadala also proposed decreasing $200,000 in funding for homeless transportation because the state agreed to send reimbursements for related costs this year instead of next year.
He proposed other offsets in the technology and special-education areas, and said that the Peabody Education Foundation has identified donors that will fund areas in science.
In total, reductions in the budget that are offset by utilizing revolving accounts and other funding sources would result in approximately $1.2 million in savings.
School Committee members unanimously voted to authorize Dr. Vadala and the district’s business manager to make the first part of changes in the budget, with Committee member Beverley Griffin Dunne emphasizing that the budget might still change down the road.
For the second tier of reductions, another proposal made by Dr. Vadala was to eliminate the program for teacher fellows that the district has in partnership with nearby colleges and universities, which would result in approximately $136,000 in savings.
“We’re in a good place, we’re maintaining our staff, so we’re not looking to hire a ton,” Dr. Vadala said. “So that is an area where I would be comfortable reducing.”
Dr. Vadala said that there were some reductions due to the closure of Center School next year, such as eliminating the team-chairperson position for the school, representing approximately $120,000 in savings.
School Committee members unanimously voted to authorize Dr. Vadala and the business manager to make the second part of changes in the budget.
These reductions brought the budget down to approximately $96 million.
Bettencourt said that he anticipates some additional cuts, that there will be at least a couple more meetings regarding the budget afterwards, and that other cities and towns are also experiencing difficulties with their school budgets.
