HANOVER - October 6 - Despite the passage of an operational override in 2025, Hanover is staring down a series of projected budget deficits that could reach as high as $3.5 million annually by 2031, Town Manager Joe Colangelo warned the Select Board Monday night. The sobering fiscal projections come as the town grapples with escalating fixed costs, particularly in retirement and health insurance expenses, that are dramatically outpacing revenue growth.
The Full Story
Town Manager Colangelo presented the Select Board with preliminary fiscal projections for fiscal year 2027 and a five-year outlook that revealed persistent budget gaps despite the town’s recent override victory. According to Boudreau’s analysis, Hanover faces an estimated $908,000 deficit for fiscal year 2027, growing to over $1 million in fiscal year 2028, and ballooning to between $2.5 million and $3.5 million annually in fiscal years 2029 through 2031.
“These are probably digestible if free cash comes in at historical levels” for the first two years, Colangelo told the board. “In fiscal year 29 through 31, it’s more problematic. I don’t think anyone has a direct answer of how to address that.”
The projected deficits exist even with tight spending guardrails already in place for town departments. Municipal departments have been directed to build budgets with a maximum 2.5% growth rate, while schools are capped at 3%. According to Colangelo, approximately 94% of the town’s total revenues come from property taxes under Proposition 2½, which itself is growing at approximately 3% annually.
The primary drivers of the budget pressure are fixed costs that continue to climb faster than revenue growth. The Plymouth County retirement assessment is projected at just under $6.5 million for fiscal year 2027, representing a 7.5% increase over the prior year. Health insurance costs are expected to reach $4.7 million, also growing at approximately 7%. These two line items alone account for over $11 million of the town’s operating budget.
“By the end of this period we’re paying just under 10 million dollars of our budget which is like 10 percent on a single line item and it’s one that doesn’t help residents on a day-to-day,” Colangelo noted, while acknowledging the town’s commitment to retirees. The Regional Old Colony Collaborative (ROC) assessment is also jumping 29% as federal grants that subsidized Hanover’s costs expire.
The South Shore Vocational Technical High School assessment presents another significant cost pressure. The assessment is projected to increase by 13% to just under $1.7 million for fiscal year 2027, driven primarily by enrollment growth. Hanover now has approximately 90 students attending South Shore VoTech, representing 8.4% growth in student enrollment.
On the revenue side, Colangelo delivered some moderately positive news. The new growth projection for fiscal year 2026 came in at just over $430,000, exceeding the budgeted assumption of $300,000 by $130,000. However, this represents a continued decline from $902,000 in fiscal year 2024 and $526,000 in fiscal year 2025. For fiscal year 2027, the total levy limit increment is projected at just under $1.8 million, providing some additional headroom but nowhere near enough to offset the fixed cost increases.
The board discussed several potential strategies to address the looming budget gaps. Select Board member Steve Louko questioned whether the Plymouth County retirement payment schedule could be adjusted to smooth out the near-term burden. Colangelo confirmed ongoing discussions with bond counsel about pension obligation bonds but warned the path would require legislative approval and is “not as easy as we thought.”
Board member Vanessa O’Connor raised the possibility of gradually using excess levy capacity to help close the gaps, a strategy that could result in property tax increases up to 6% if the full excess levy were used in a single year. Colangelo cautioned that such an approach would eliminate flexibility for future years. “If we use up the excess levy capacity in one year, we’re in a really bad spot as you look five years out,” he said.
The budget presentation included detailed analysis of several areas requiring further refinement before the formal town manager budget submission in early February. Notable uncertainties include the final certification of free cash and retained earnings, decisions about how to use approximately 1.5 million in excess levy capacity accumulated from the override, and potential impacts from state aid reductions given economic uncertainties at both state and federal levels.
Colangelo also presented positive news on another front. The town has identified approximately $706,000 in funds that can be returned to various cash accounts from projects dating back to fiscal year 2012. This includes $140,000 that would return to free cash, $85,000 in retained earnings for the water enterprise fund, and just under $500,000 from Community Preservation Act projects. An additional $800,000 in debt authorization can be closed out or reduced, though this differs from actual cash. These project closeouts may be included in the December special town meeting warrant.
The fiscal discussion took place during a long meeting that also addressed several other significant items including the transfer of property at 188 King Street, initial discussions on tax rate classification, and the upcoming MBTA zoning special town meeting.
In the 188 King Street property sale, the board voted 4-1 to accept a $182,000 bid from Cathy Follett of Renovations, Inc. for the former fire station property. Follett plans to use the space as a working carpenter shop and office for her kitchen and bath business, which already has a showroom in Four Corners. The board selected a second preferred bidder, Mel Xhengo of X Bros Builders, at $167,500 as a backup if the primary sale falls through. All proceeds from the sale will be dedicated to upgrades at the fire headquarters, specifically to improve accommodations for female firefighters as directed by annual town meeting.
The board also held a joint meeting with the Board of Assessors for an initial discussion on fiscal year 2026 tax rate setting. While no formal decisions were made, board members heard concerns from Interim Assessor Elaine Boidi that the recent increase in the commercial split tax rate has resulted in numerous commercial property abatement requests and complaints from business owners. Board of Assessors Chairman Les Molyneaux argued that “the single tax rate is the most fair tax rate” and noted that surrounding towns like Rockland, Hanson, Norwell, and Pembroke all use single rates.
Select Board members expressed varying perspectives on the tax rate issue. Board member Vanessa O’Connor indicated she would like to see a higher split rate ultimately but suggested a “holding pattern” might be appropriate given current economic uncertainty including tariffs and inflation. Board member Steve Louko noted the need to balance the impact on businesses with the town’s revenue needs. The formal tax classification hearing will take place later in the fall once the Department of Revenue certifies property values.
In other business, the board approved the annual Hanover Hurdle Club Thanksgiving Day road race application. Race director John Gary reported that approximately 800 runners typically participate in the event, which will include police details, fire department EMTs on bikes, and road closures coordinated with the Department of Public Works. The board also approved the deadline for alcohol license renewals and accepted a license transfer application for Ryan Family Amusements at Hanover Crossing.
Select Board member Greg Satterwhite initiated a discussion about increasing funding for the Council on Aging beyond current budget guardrails. Satterwhite proposed that the board commit to funding the COA at a higher level as a “default position” even if it requires finding efficiencies elsewhere in the budget. He suggested that approximately $50,000 to $60,000 in additional funding, including potentially two part-time positions at roughly $19,000-$20,000 each, would “make a huge impact” for the COA.
Board member Rachel Hughes pushed back on Satterwhite’s proposal, questioning why COA needs weren’t more prominently featured during last year’s override campaign. “To me, where was that messaging last year?” Hughes asked. “Why didn’t we hear that need loud and clear and why didn’t we budget for it?”
Council on Aging Advisory Board Chairman Les Molyneaux, speaking during public comment, responded that the COA had commissioned a UMass gerontology study in 2024 that documented needs but felt seniors received no benefit from the override. “How much noise do seniors have to make to get recognized in this community?” Molyneaux asked, noting that by 2030, an estimated 30% of Hanover’s population will be senior citizens.
Town Manager Colangelo acknowledged the COA needs but noted that without budget surpluses, any increase for one department must come from reductions elsewhere. He suggested looking at net costs including offsets and considering staging, noting that some kitchen repairs must be completed on the capital side before certain programs can expand. Several board members indicated support for exploring additional COA funding but stopped short of committing to specific amounts at this stage of the budget process.
The board also reviewed the preliminary warrant for the December 8 special town meeting. Colangelo confirmed that the primary focus will be MBTA zoning compliance, with the Planning Board scheduled to hold a public hearing on October 20. The draft warrant includes an article to allocate funding from free cash for any legal actions or costs associated with potential non-compliance, as well as an article for project closeouts to return appropriated but unspent funds to various accounts.
Regarding senior services, Colangelo reported that he is exploring a partnership between the Council on Aging and South Shore Vocational Technical High School’s culinary program to potentially enhance meal services for seniors, an idea suggested by Select Board member Steve Louko at a previous meeting.
The meeting concluded with the board entering executive session to discuss contract negotiations with non-union personnel and collective bargaining agreements. Board Chair Rhonda Nyman opened the meeting by addressing social media posts made by a board member at the previous meeting, clarifying that the Select Board lacks authority to remove an elected official and that Hanover’s bylaws contain no recall provision. Such action, Nyman noted, would need to be determined by residents at the ballot box.
Why It Matters
The multi-million dollar budget deficits projected through fiscal year 2031 will directly impact every Hanover resident and business. Despite the operational override passed in 2025 to stabilize town finances, accelerating fixed costs—particularly retirement and health insurance expenses growing at 7-7.5% annually—are consuming available revenue at rates far exceeding the approximately 3% growth in property tax receipts under Proposition 2½. Within three years, the town may face impossible choices: dramatic service cuts, significant property tax increases beyond the override, or depletion of financial reserves needed for capital improvements and emergencies. Residents who voted for the override expecting long-term stability may face additional fiscal votes or see deterioration in services ranging from public safety staffing to road maintenance. Businesses already concerned about commercial tax rates may see further upward pressure. The projected $3.5 million deficit in fiscal year 2031 represents roughly 3.5% of the current operating budget, a gap that cannot realistically be closed with departmental spending restraint alone given that most costs are fixed contractual obligations or state-mandated assessments.
Meeting Minutes
Key Motions & Votes
Motion: To table approval of draft meeting minutes from August 11, September 8, September 19, and September 22, 2025, until next meeting when all members have had time to review. Outcome: Approved. Vote: Unanimous. (Timestamp: 0:03:28)
Motion: To close the public hearing on the Ryan Family Amusements LLC license application for change of ownership interest. Outcome: Approved. Vote: Unanimous. (Timestamp: 0:07:14)
Motion: To approve the Ryan Family Amusements LLC license application for change of ownership interest and change of officers/directors/managers on their all-alcoholic beverage license. Outcome: Approved. Vote: Unanimous. (Timestamp: 0:07:18)
Motion: To approve the Hanover Hurdle Club Thanksgiving Day road race application subject to requirements for police detail and EMS bikes. Outcome: Approved. Vote: Unanimous. (Timestamp: 0:12:11)
Motion: To approve the deadline of 12 noon on Tuesday, November 25, 2025, for submitting license renewal applications. Outcome: Approved. Vote: Unanimous. (Timestamp: 0:13:28)
Motion: To accept the proposal from Cathy Follett/Renovations, Inc. (Proposal #4) for $182,000 as the preferred bidder for 188 King Street. Outcome: Approved. Vote: Unanimous. (Timestamp: 0:49:57)
Motion: To accept the proposal from Mel Xhengo/X Bros Builders (Proposal #2) for $167,500 as the second/backup bidder for 188 King Street. Outcome: Approved. Vote: Unanimous. (Timestamp: 0:53:01)
Motion: To appoint John Tuzik to the Zoning Board of Appeals as an alternate. Outcome: Approved. Vote: 4-1 (one member opposed). (Timestamp: 0:37:40)
Motion: To enter Executive Session to discuss strategy with respect to contract negotiations with non-union personnel and collective bargaining agreements, not to return to open session. Outcome: Approved. Vote: Unanimous (roll call). (Timestamp: 0:42:04)
Public Comment
The meeting included no formal public comment during the designated public comment period at the beginning of the meeting. However, Council on Aging Advisory Board Chairman Les Molyneaux addressed the board during the budget discussion to express frustration that senior needs have been documented through a UMass gerontology study completed in 2024 but he felt seniors received no benefit from the override. Molyneaux stated, “How much noise do seniors have to make to get recognized in this community?” and noted that by 2030, 30% of Hanover’s population will be senior citizens. Cathy Follett, bidder on the 188 King Street property, participated remotely during the property disposition discussion to clarify her plans to use the building as a working carpenter shop for custom cabinetry projects. Board of Assessors members Elaine Boidi and Les Molyneaux participated in the joint discussion on tax rate classification, with Molyneux stating his belief that “the single tax rate is the most fair tax rate” and expressing concern about businesses considering leaving Hanover due to the split rate.
What’s Next
The Select Board and Board of Assessors will continue discussions on the fiscal year 2026 tax classification hearing later in the fall once the Department of Revenue certifies property values. The Planning Board will hold a public hearing on MBTA zoning compliance on October 20, 2025, during the next Select Board meeting. The two boards will hold a joint meeting in early November to discuss the outcome of the public hearing and finalize the warrant for the December 8 special town meeting. The town manager will submit the formal fiscal year 2027 operating budget in early February, with ongoing refinements to projections for free cash, retained earnings, state aid, and enterprise fund budgets. The Select Board will meet with Plymouth County Retirement Treasurer Tom O’Brien at a future meeting to discuss options for adjusting the retirement payment schedule. Town staff will continue exploring a partnership between the Council on Aging and South Shore Vocational Technical High School’s culinary program to enhance senior meal services. The Transfer Station will continue four-day-per-week operations through the fall with fiscal year 2027 fee adoption scheduled for April 6, 2026. The finance department is working with the Department of Public Works and Community Preservation Committee to finalize project closeouts that could return over $700,000 to various cash accounts, potentially for inclusion in the December special town meeting warrant.