The Mendon-Upton Regional School District faces a preliminary $1.8 million budget shortfall for fiscal 2026, district finance staff told the school committee at its Feb. 24 meeting.

That shortfall grew out of rising salary and benefit costs, limited state and local revenue increases and the potential loss or reduction of federal grants, district staff said. Jay (district finance staff) told the committee, “Our shortfall remains at $1,800,000,” and laid out possible steps to close the gap before the March 10 budget hearing.

The shortfall matter: Why it matters

District leaders said the gap must be addressed now because the committee will formally present and certify a budget in March and towns will decide town budgets in May. The committee’s decision about how much one‑time reserve money to use this year will affect fiscal flexibility in FY27, when staff warned the district could face a more severe fiscal cliff.

What committee members heard

Jay told the committee that salary drivers include a roughly $1.1 million increase in base salaries (not including new positions) and an unusually large set of teacher “lane changes” this cycle — about $150,000, meaning staff advancing on pay scales after additional coursework. Health insurance renewal uncertainty is also a major variable: the district budgeted for a 6% health premium increase but administrators were advised by their consultants that a 9% scenario is possible; that difference is roughly $100,000 in the district forecast.

State and local aid were part of the presentation. The district has a projected Chapter 70 (state education aid) increase that staff estimated at about $75 per student and roughly $361,000 total; district staff said they expect the House and Senate to raise that number in later budgets but cautioned not to rely on additional funds. The district’s regional cost‑sharing formula shifted assessments so Mendon’s required local contribution would fall by about $177,000 while Upton’s would rise by about $631,000; staff said that produced a combined local increase of about $351,000 but also creates distributional pressure between the two towns.

Grants, reserves and revolving accounts

District staff listed federal and federal‑flow grants that supplement the operating budget — IDEA special education entitlements, Title I, Title II, Title III and Title IV — and said those grants total roughly $715,000 in annual revenue. Staff noted the risk that some federal grants may be reduced and recommended planning for a lower grant baseline in worst‑case scenarios.

The committee reviewed reserve balances that can be applied one time to smooth FY26: Jay said the School Choice revolving account had generated a projected profit of about $725,000 for the current year and sits near $3.1 million; an undesignated fund balance at start of FY25 was about $2.9 million. The district also has carryover federal funds (the “240 grant”) that staff said can be used in FY26 but which would reduce carryover into future years.

Options on the table

Staff presented a mix of options to bridge the $1.8 million gap: 1) increase one‑time revenue use (reserves, school choice carryover, federal grant carryover); 2) pursue modest additional local contributions if the towns can provide them; 3) reduce recurring expenditures (vacant positions, deferral of nonessential purchases, hiring freezes); or 4) some combination, including targeted use of reserves now while pursuing a longer‑term override or local solutions before FY27.

Committee members stressed the tradeoffs. One member said they preferred preserving staff this year and using one‑time funds to avoid disruptive layoffs now, while acknowledging that deep use of reserves would increase pressure in FY27. Administrators said they prefer limiting “snowplowing” — deferring recurring costs into future years — because that simply increases future cuts.

Votes at a glance

The meeting included three formal motions tied to nonbudget agenda items; individual roll‑call tallies were not recorded in the public transcript.
- Approval: Out‑of‑country student field trip to Spain (April 2026). Motion to approve the trip carried; chair recorded the motion, second and a unanimous "Aye." (Motion text: “Motion to approve the trip to Spain in 2026.”) The trip organizer’s presentation described a nine‑day itinerary with two days in Madrid, visits to Salamanca and the Alhambra, interactive cultural activities, arranged language classes, soccer exchanges with local students, and a payment/registration process handled through the tour company website. The organizer said airfare, some hotels, breakfast and three lunches would be included; other lunches would be traveler choice.
- Policy approvals and removal: The committee approved two policies on second reading (KDCB and IJNDD) and moved to remove policy IJNDCR. The chair called for the motions, a second was given and the chair recorded an "Aye" vote for each motion; the public transcript did not include individual member vote names.

Discussion vs. decisions

Committee discussion emphasized preserving instructional staff and limiting program cuts in the immediate year, but members also acknowledged the district may need a long‑term funding solution (operational override or similar) if the near‑term revenue outlook does not improve. Administrators said the March 10 budget hearing will present the public with the district’s preliminary budget and a clearer set of scenarios once towns provide their local contribution figures and the state budget process advances.

Key clarifying figures from the meeting

- FY26 preliminary shortfall presented: about $1,800,000 (Jay, district finance staff).
- Salary drivers (excluding new postings): about $1,100,000 increase.
- Lane change (teachers advancing): ~ $150,000.
- School choice projected profit for current year: ~$725,000; school choice reserve balance projected near $3.1 million.
- Undesignated fund balance start FY25: ~$2.9 million.
- Chapter 70 state aid increase estimated in presentation: ~$361,000 (approx.; $75 per pupil).
- Mendon local contribution projected change: −$177,000.
- Upton local contribution projected change: +$631,000.

What’s next

District staff said they will refine revenue assumptions and present scenarios at the budget hearing on March 10 and in a budget subcommittee meeting before then. Administrators said they will also continue to consult with town officials about possible local contributions and finalize health‑insurance renewal terms before the committee must set a certified budget number.