Milton’s preliminary fiscal year 2027 forecast assumes a property tax increase to the maximum allowed under Proposition 2.5 as the town grapples with rising health insurance premiums and a looming spike in debt service. Town Administrator Nick Milano presented the early outlook to the School Committee on Wednesday, highlighting a projected $4.2 million revenue increase—roughly 2.9%—while warning that the town must shift away from using one-time funds to cover recurring school and municipal operations.

The town is coming off a fiscal year 2025 that saw a $3.6 million revenue surplus, though Milano cautioned that much of that figure stemmed from one-time collections. He credited progress in closing out long-term delinquent accounts by keeping pressure on delinquent taxpayers, along with $900,000 in motor vehicle excise taxes that exceeded conservative estimates. While building permit activity remains steady through home renovations, Milano noted that the town is not seeing the same volume of large-scale projects that bolstered previous years. Furthermore, investment income remains high due to the current interest rate environment, but Milano warned this could shift downward if rates drop.

On the expense side, health insurance continues to be a primary driver of fiscal uncertainty. Following a 14% increase in fiscal 2026, the current forecast includes a 7% placeholder for fiscal 2027. Milano identified an emerging cost driver in the form of GLP-1 weight-loss medications, which accounted for 2% to 3% of the town's premium increase. He noted that Blue Cross is currently phasing out coverage for weight loss unless the town opts for a specific rider. Every 1% on the premium is about a $125,000 increase, Milano told the committee, adding that the town is also preparing for a spike in debt service for projects like the Lower Gally and Cunningham Park improvements.

One notable pressure point in the debt schedule is the arrival of a new fire truck. While the vehicle was ordered in 2022, the $1.6 million cost will not hit the budget until its expected delivery in 2026. Chair Amanda Serio clarified the timing of these payments, asking, Nick, are you saying we don't pay debt service on the trucks until they arrive? Milano confirmed the town pays upon delivery, suggesting that for the upcoming fiscal 2027 budget, the town will likely need to lean on free cash for the capital budget rather than taking on new debt-supported projects.

The committee also discussed a shift in fiscal policy intended to protect the town from future overrides. Milano expressed a desire to move away from using free cash—unspent year-end funds—to balance the operating budget. Member Nathan David Hutto questioned if this transition would be a challenge for the team to know that lever is taken away. Milano acknowledged the difficulty, stating, it will be challenging in Milton because we are revenue-restricted, but it's a good practice so we don't end up needing another high override. The town plans to draw down its stabilization fund over the next several years instead.

Beyond the numbers, the committee is refining its budget philosophy to emphasize long-term stewardship. Hutto reported that he added a sustainability component as the top priority in the district’s updated narrative. The goal is to let people know what we are trying to do and why before we get to the numbers, Hutto said, suggesting the philosophy be shared on a transparency landing page on the district website. Chair Serio agreed with the approach, noting that having that localized place for information is great.

The meeting also included members Mark Loring, Elizabeth Carroll, Bao Qiu, and Annamma Varghese. The committee scheduled a Budget 101 presentation for the full board on November 3 to further detail these fiscal pressures before the formal budget season intensifies. While no votes were taken on the forecasts, the session set a somber tone for a year that will rely heavily on maximum tax levies and the strategic use of stabilization funds to maintain current service levels.