Hanover Faces Budget Crisis, Considers Delaying MBTA Zoning Decision

Town officials weigh options as financial challenges loom for fiscal year 2026

HANOVER, MA - October 28 - Hanover officials are grappling with significant budget challenges for the upcoming fiscal year 2026, citing inflation, rising costs, and reduced free cash as key factors. The Select Board is considering various options to address the looming financial crisis, including potential service cuts or exploring ways to increase revenue beyond Proposition 2 1/2 limitations.

During a recent Select Board meeting, Town Manager Joe Colangelo and former Advisory Board member Jim Hoyes, who is aiding the town in budget development, presented a sobering outlook for the town's finances. Colangelo emphasized that Hanover's finances have been well-managed, pointing to the town's double A2 bond rating and flawless audits.

"At least according to any known credible data point, we have very well managed finances and they have been for a long time," Colangelo stated.

However, the town is facing unprecedented financial pressures. Hoyes highlighted the impact of inflation, noting that in recent years, what was once a $100 expense has now become a $121 expense due to inflationary effects.

The officials also pointed out that health care premiums continue to rise at about 7 percent annually, even as overall inflation eases. This, combined with increased costs in areas such as electricity and vehicle purchases, is putting significant strain on the town's budget.

Colangelo presented two main options for addressing the budget crisis: "Voters can mitigate property tax increases and drastically reduce services to keep spending within the constraints of Proposition 2 1/2, or increase property taxes and fees beyond the Proposition 2 1/2 limitations in an effort to retain or increase services."

Adding to the town's financial considerations, the Hanover School Committee is exploring the possibility of requesting a levy increase above Proposition 2 1/2 for a special town election in January. This proposal has raised concerns among Select Board members about the timeline and potential impact on other town services.

Select Board Chair Vanessa O'Connor voiced her reservations about the school committee's proposal, stating, "I'm concerned that their main concern, which is addressing the need to provide pink slips to teachers by April 15th in accordance with their contract requirements, isn't actually addressed by having the election component in January."

In addition to these challenges, the Select Board is considering removing the MBTA Communities zoning article from the December special town meeting warrant. This delay would allow voters to make a more informed decision once the outcome of the Milton court case, which challenges the state's MBTA zoning law, is known. However, the deadline for Hanover to comply is December 31.

"I think that there's a lot of uncertainty on this topic," Colangelo said. "The fact that we may not have a decision from the courts, from the Milton case, much prior to or prior at all to the December 9th special town meeting would make it very difficult for voters there to make a well-educated decision."

O'Connor expressed support for this approach, pending resolution of some legal questions. She emphasized the importance of understanding potential consequences, such as loss of grant funding or litigation risks, before making a final decision.

"It's not that we're not going to comply, but we don't have enough information to really, in good faith, decide whether to comply or not until we've heard how this litigation with Milton ultimately plays out," O'Connor stated.

As the town navigates these complex financial challenges, officials are urging residents to stay informed and engaged in the budget process. Select Board member Greg Satterwhite emphasized the importance of the upcoming budget discussions.

"If there are things that are not in that budget that people value, we either need to find someplace else in the budget to take things away from to fund those things or use that as a starting point for a discussion of any type of override," Satterwhite said.

The initial budget presentation from the Town Manager is scheduled for the next Select Board meeting, though the last few meetings have previewed it, marking the beginning of what promises to be a challenging budget season for Hanover.