Milton’s financial planners are grappling with a widening gap between revenue-driven projections and the rising costs of maintaining town services. During a Dec. 15 meeting of the financial forecasting work group, officials acknowledged that an initial placeholder of a 2.5 percent salary increase across all departments fails to reflect the contractual realities of the school district, where "steps and lanes" alone push personnel costs significantly higher. Finance Director Nick Piccolo explained that the current model was built from the "revenue side," essentially working backward from what the town can afford rather than what it currently spends. The way we structured this the first time was from a revenue side. If this is our revenue, what must our expenses increase at to stay within that? I'm not saying that's the right way, it's just how we approached it, Piccolo said.

School officials were quick to point out the insufficiency of that approach for the upcoming FY27 budget. Katie from the school department noted that the salary portion of their budget has historically increased by roughly 4 percent. Superintendent John Macero warned that sticking to the lower placeholder would necessitate staffing reductions. The schools would never be able to budget to a 2.5% salary increase without laying people off. That's not level service, Macero said. I appreciate the exercise, but we are beginning to talk about the 2.0 version, which is realistic expenses.

The revenue side of the ledger remains constrained by the legal 2.5 percent property tax levy limit and conservative estimates for "new growth"—tax revenue from new construction and renovations. While the town has seen new growth exceed $1.2 million annually since 2022, Piccolo proposed a more cautious $1 million figure for the five-year forecast, noting that future certified values are less certain. Chair Jay Riley questioned the long-term outlook, asking, Is that conservative enough? Have we looked at a long enough period? Riley emphasized the need for a transparent financial roadmap that prepares the public for the eventual necessity of a tax override. I'd much rather have a realistic five-year forecast and a conservative one-year forecast, he added.

The committee also debated whether the town is being too cautious regarding local receipts, such as motor vehicle excise taxes and building permits. Currently, the forecast assumes a flat 1 percent annual increase, despite recent years showing growth between 4 and 16 percent. Committee members Mark and Brian argued for a more realistic projection to avoid understating available funds. However, Treasurer/Collector Joanna Hilson urged caution regarding excise taxes, which fluctuate based on car values and market trends. I caution you on raising this percentage... a lot of these bigger numbers are very market-driven, Hilson said, explaining that rapid vehicle depreciation can quickly erode those gains.

State aid projections offered a small window of optimism, with Macero noting that while the state mandate is a minimum $30 per-pupil increase, Milton has recently received between $100 and $150. To balance these variables, the committee discussed the strategic use of the Operating Budget Stabilization Fund, which currently holds $2.7 million. Riley argued the fund should be used as a bridge to maintain level services until the next override, rather than being exhausted prematurely. The mandate is full usage. I would say the prudent use is to maintain level services through the next override. That doesn't mean spend all the money in five years so we go to an override, but don't lay off people at schools or close the library, Riley said.

As the town moves toward a "Version 2.0" of the forecast based on realistic expenses, officials are also looking to modernize their tools. Select Board member Winston Rice confirmed that the town is vetting new software to streamline these projections. We're going through the process of having conversations and having demos for a few different solutions, Rice said. Committee member Brian suggested that these technical updates should be paired with a formal written policy. I mentioned once about doing a budget summary... a write-up for the policy on how we approach the budget. The theories behind where you want to be conservative and where you want to be accurate, he noted. The group expects to reconvene shortly to tackle general expenses and departmental requests.