AMHERST — The town’s ending fiscal year 2024 with a $5.7 million surplus on June 30 is prompting some members of the Amherst and Regional school committees to question whether this leftover money means education is being shortchanged.

Concerns were raised about the large amount that went unspent last year at Monday’s joint meeting of the Town Council, Amherst and Regional School Committees, Jones Library trustees, Finance Committee and Budget Coordinating Group, which featured a presentation on financial indicators that will help town officials prepare a fiscal year 2026 spending plan.

Amherst School Committee Chairwoman Sarah Marshall said it is upsetting to see a surplus so high in a $91.08 million municipal budget. “That is money that is not at work in our town or in our schools,” Marshall said. “It really bothers me that, I guess, that money is swept into free cash and is out of reach for the schools.”

The focus on the surplus follows a debate last spring about the regional schools going beyond a stipulated 4% increase in Amherst’s contribution, with a $710,881 assessment increase for fiscal year 2025 supplemented by the Town Council adding $355,440 in American Rescue Plan Act money to the $18.48 million total assessment. Amherst School Committee member Deb Leonard said it’s unfortunate the region couldn’t benefit from the surplus.

“I also question the overall value in telling the regional schools there is absolutely no money in the budget for a $355,000 increase, but here you consider a reasonable overage at the end of the year to be 15 times that amount,” Leonard said.

Town Manager Paul Bockelman, Finance Director Melissa Zawadzki, Comptroller Holly Drake and Treasurer/Collector Jennifer LaFountain presented 10-year trends and early estimates for funding for the municipal, school and library budgets, showing that currently, based on past practice of providing equal tax support to each segment, they would be in line for 3% increases next year. That’s below the 4% increases for their fiscal year 2025 budgets.

The figures are based on the allowable 2.5% increase under the state’s Proposition 2½ law, $650,000 in “new growth” associated with the taxes from new buildings, flat state aid and no request that voters be asked to pass a tax-cap override. “We’re pretty comfortable with the projections at this point in time,” Bockelman said.

But Bockelman cautioned that there could be a 13% increase in health insurance costs, possibly even higher, and the town is unlikely to see more new tax revenues. “I don’t think we can rely on that much new growth to expand our tax base,” Bockelman said.

Already, the regional schools have suggested that to maintain current services, the total budget would need to be $38.48 million, which is $2.71 million, or 7.6%, over this year’s budget.

At Large Councilor Mandi Jo Hanneke said she is concerned about town projections being low for license and permit fees. By being low, that is $1 million less in revenue for the expense side, she said.

“These seem like extremely conservative projections on some of these that, frankly, directly resulted in an FY 24 actual surplus of $5.7 million,” Hanneke said.

Even 10% of that $5.7 million, Hanneke said, could have supported employee compensation.

Bockelman said the Town Council could direct reserves to be set at a lower level as part of a policy discussion about how aggressive to be on budgeting. The Town Council and Finance Committee set the budget guidelines for how he builds spending plans.

“You can’t be 100% accurate looking forward,” Bockelman said. “I think it’s a valuable discussion, are we being too conservative or are we being too liberal in how we project out expenses and income.”

But he cautioned not to go negative with free cash.

Drake said some of the surplus revenue for Amherst came from $1.9 million of interest income brought by “back-burnering” capital projects, along with $1.4 million or so of expenditures that didn’t get spent due to vacancies and lower costs.

Bockelman said he appreciates the pressure on taxpayers, both from the tax rate and the state of the economy. “We’re very sensitive to that,” Bockelman said.

Some of the trends Zawadzki showed are the town becoming more dependent on local property taxes, with state aid declining as a percentage of revenues. Zawadzki also said Amherst is above its goal of 15% reserves, which is being done intelligently to offset some of capital coats of new and expanded town buildings.

Still, Drake noted that the town has added 17.51 positions in recent years, going up from 196.08 to 213.59 full-time equivalents, mostly to create the Community Responders for Equity, Safety and Service department and to add four firefighters.

School Committee member Bridget Hynes said a shift in spending priorities could help bridge a gap for schools, which are cutting staff as the town expands its payroll. “So it feels like different fiscal universes,” Hynes said.

Anna Heard, a Shutesbury representative to the Regional School Committee, said Amherst pledged to more adequately fund the services need at the schools at a September “four towns” meeting that included the other regional members Leverett and Pelham.

“I would like to understand why none of the discussion put forward in the four town meeting seems to be represented in this budget,” Heard said.

Members of the Town Council pushed back on the idea that Amherst has come to any agreement, and Bockelman said the financial indicators shouldn’t be seen as a budget plan.

“This is the opening discussion,” said Council President Lynn Griesemer. “We don’t close this discussion until June 30 of 2025, and in between that, we get budgets from the library, we get budgets from the school and we get lots of different updates (and) we provide guidelines.”