Lexington Public Schools may have to lay off over a dozen employees before the next school year to close the town’s estimated $4.7 million budget deficit.
Town officials blame the shortfall on a striking increase in healthcare costs. In fiscal year 2027, the cost of insurance premiums for Lexington employees is predicted to increase by about 13.5 percent to $45.9 million.
That’s up from an 11 percent increase last year and almost triple the historical norm of 5 percent increases year-to-year.
“If this year was a 5 percent increase, we would not be having the conversation we’re having right now…we would barely have a deficit,” Carolyn Kosnoff, Lexington’s assistant town manager of finance, said during a Nov. 20 budget summit. “Health insurance is really what is putting the most pressure on the budget this year.”
The town recommended Lexington Public Schools reduce its roster of full-time positions by 42 because of that cost increase. That is, 42 fewer positions than what was approved for the FY26 budget. Since that budget was approved, some reductions were made, a handful of LPS employees retired, and others chose to move on from LPS for jobs elsewhere. That leaves about 14.5 full time positions that will actually have to be cut to remedy the budget, Christopher Scully, LPS’s assistant superintendent for finance and operations, explained during a School Committee meeting on Jan. 13. That will save the district about $950,000.
LPS Superintendent Julie Hackett said an additional 20 to 30 positions will likely be cut later to help keep the town afloat.
“We will probably — I shouldn’t say probably — we will be looking in the spring to reduce further FTEs (full-time equivalents, meaning full-time positions),” Scully said.
Reducing FTEs means cutting some positions all together, but it also means reducing hours for some positions.
Beyond eliminating full-time positions, the district will likely use up to $4.4 million of circuit breaker funding, which is reimbursement the district gets from the state for its special education program. LPS will also work to reduce the number of students who are sent out-of-district because they have needs LPS can’t meet, eliminate unfilled positions, and dip into the transportation revolving account, which is partially funded by user fees, for extra cash. Scully also mentioned increasing the costs for students to participate in programs such as school sports teams if needed.
So why are educators getting hit hardest by the town’s budget deficit?
Lexington’s school district uses about three times as much of the town’s overall operating budget as the municipal side. And over 80 percent of the school district’s money goes to faculty and staff salaries. So the ‘LPS employee salaries’ bucket is one of the largest the town can pull from.
Educators and staff are not happy. Members of Units A, C, and D of the Lexington Teacher’s Association are all up for new contracts next school year and more than anything, LEA members want higher pay.
Negotiators are specifically asking that members get a $9,400 increase in pay in the 2026 to 2027 school year, then a $9,870 increase in 2027 to 2028, and a $10,364 increase in 2028 to 2029. Avon Lewis, the chair of LEA’s bargaining team, said those increases in pay would be market adjustments.
“We believe the top of our pay scale should be in the range of what median income is around here so people aren’t looking at teaching and going, ‘well, I could teach or I could do pretty much the exact same thing [in a corporate position] and make $50,000 more per year. It’s asking a lot of people to say, ‘I’m going to choose to be poor so I can teach students,’” Lewis told the Observer in an interview for an article on contract negotiations.
But due to the looming budget deficit, the town is suggesting LPS staff and faculty get a 2.5 percent cost of living adjustment in FY27.
Lewis told the Observer she is far more concerned about that recommended pay increase for LEA members than 14.5 full-time positions being cut.
“The so-called ‘recommended’ budget has a cost of living adjustment for staff built in, and that number is 2.5 percent, a number that does not match inflation, a number that is less than what our peer districts are getting, and a number that is way below what we are looking for,” she told the Observer. “We are deeply concerned that this sends the wrong message to the town.”
Lexington will also make some cuts to the municipal side of the budget to free up about $1.3 million. The town already reduced expenses by about $364,000 by deferring the purchase of at least one fleet vehicle, eliminating a position in the forestry department, and other smaller reductions. Town Manager Steve Bartha will conduct another round of targeted budget reductions to try and free up another $457,000. The town will look to allocate about $609,000 in additional revenue to close the gap.
Lexington isn’t alone in struggling to make ends meet due to rising healthcare costs. Melrose and Stoneham passed votes to raise property taxes to help pay for the cost of benefits — Melrose residents will pay $13.5 million more next year and those in Stoneham will pay $9.3 million.
The Boston Globe attributes the rising cost of health insurance for local governments, private businesses, and nonprofits to increasing costs for doctor visits, hospital stays, and prescriptions, as well as an aging population and those with chronic conditions accessing health care more frequently.
Kosnoff emphasized to the Observer that the FY27 budget is “still in flux.” Lexington will host another meeting to further discuss budgeting in FY27 on Jan. 28. The budget will not be set in stone until Town Meeting votes to pass it during its annual session this spring.