Budget season is now underway and Dartmouth officials say they are worried national economic trends could make it difficult to have a financial plan that avoids a Proposition 2 ½ override.

“This is going to be one heck of a year,” Finance Committee chair Robert Gauvin said at a Jan. 9 workshop with the Select Board.

He noted that interest rates are increasing and that the national yield curve is inverted, meaning investors aren't sure of the long-term profitability of a company's or government's ability to pay a debt in a certain fixed time.

“This is the sign of a recession,” Gauvin said.

Locally, he said, this is “the first time in many years inflation will test prop 2 ½.” Under state law, all municipalities in Massachusetts are limited to 2.5% year-to-year budget increases in a single fiscal year.

The proposition can be overridden, but it would need to be approved by both Town Meeting and voters in a ballot question.  

According to the preliminary budget presented at the workshop, Interim Director of Finance Gary Carreiro anticipates Town Meeting will vote on a general fund of more than $99 million for fiscal year 2024 — up nearly $3 million from the package approved at last year’s Town Meeting.

Due to such economic conditions, Gauvin said the town will have to be mindful of department requests in the upcoming budget — especially when it comes to rising utility costs.

According to Carreiro, several departments have already “blown through” their fuel budgets just seven months into this current fiscal year. 

Additionally, Gauvin noted that in preliminary talks with the school department — which takes up more than half of the town’s budget — transportation costs are looking to be roughly $600,000 more than anticipated.

Officials also want to be mindful of expenses like health insurance for municipal employees such as teachers — who are currently negotiating a new contract with the school district.

Currently, the town covers 54% of the cost of health care bills, while teachers pay the remaining 46%. Costs ranged from $130.31 to $324.17 a week depending on the plan and whether the coverage is for individuals or families. 

“We know we’ve got an issue,” said Finance Committee member John Sousa. “We need to do something there — it’s not going away.”

Still, the town is confident that it will present a balanced budget.

“We don’t really have a choice in municipal government,” Carreiro said.

As the budget process continues, Carreiro said he and Town Administrator Shawn MacInnes will review budget prosposals with department heads in the next couple of months.

Proposals will then be reviewed by the Finance Committee and officially presented to the Select Board for its Town Meeting recommendation in April/May.

Spring Town Meeting will be held Tuesday, June 6.