The High School Didn't Break Our Budget--Prop 2½ Did

Some people blame the new high school for Stoneham's budget crisis. They say we overspent, mismanaged the project, and created our own financial mess. Let's set the record straight.

The high school went over budget. We're talking nearly $25 million over the original plan. (Town FAQ, Jan 2023) There's no debating that, and we as a town are not afraid to own it. Because it wasn't incompetence or wasteful spending that caused it. It was getting blindsided by once-in-a-generation inflation while construction was already underway. And when that hit, Stoneham didn't back down--we faced it head-on like Spartans do.

But first, let's clear up the biggest misconception: the high school money and the operating budget are completely separate. The high school was funded through a debt exclusion, not an override. A debt exclusion is a temporary tax increase that pays for one specific capital project. That money can only pay the principal and interest on construction bonds. It cannot hire teachers, police officers, or firefighters. It cannot fix roads or fund libraries. It's locked to the high school project for 30 years until the bonds are paid off. Even if we wanted to redirect that money to the operating budget, we legally cannot. Any unspent high school funds go back to taxpayers as reduced debt payments, not into town operations.

So when people say the high school broke our operating budget, they're fundamentally confused about how municipal finance works. These are separate buckets of money serving different purposes. The operating budget crisis exists because Proposition 2½ limits annual revenue growth to 2.5% while costs have been rising 4-8% annually for years. That's a structural problem that predates the high school and has nothing to do with construction overruns.

Now let's talk about what actually happened with the high school budget. In November 2021, voters approved the project by a 4-to-1 margin. Contracts were executed. We broke ground in June 2022. And then 2022 turned into an economic nightmare. U.S. inflation hit 8%--the highest since 1981. But construction materials got hit even harder with the price of steel and other building materials increasing as much as 139%.

Supply chains collapsed. Labor shortages spiked costs. And we were locked in--contracts signed, construction started, no way to back out. Between April and September 2022, the Building Committee made $24 million in design cuts trying to absorb the inflation. We reallocated $2.2 million in ARPA funds. We reallocated $3.3 million in contingency funds. We did everything possible to control costs.

But when final construction bids came in December 2022, they were still $14.5 million over budget despite all those cuts. This wasn't mismanagement. This was market forces beyond anyone's control hitting at the worst possible moment.

And here's the critical part that critics conveniently ignore: Stoneham wasn't alone. Thirty Massachusetts towns building MSBA school projects got hit by the exact same crisis. Groton, Lowell, Somerville--all of them faced massive overruns from COVID-era inflation. The state itself acknowledged this was systemic, not local incompetence.

So what did Stoneham do? We didn't just accept the hit and move on. We rallied those 30 towns. We organized. We lobbied the state legislature. We fought for relief. And we won.

Senator Lewis and Representative Day championed a three-part plan that got written into the state budget: authorize the MSBA to make supplemental grants for COVID-impacted projects, increase the MSBA spending cap, and appropriate $100 million in relief funding. The legislature passed it. The MSBA distributed $178 million total across those 30 towns. Stoneham received approximately $6.8 million.

That's not mismanagement. That's leadership. Stoneham identified a crisis, built a coalition, took the fight to Beacon Hill, and secured millions in relief. We turned a financial disaster into a legislative victory. And we're holding contractors accountable too--every punch list item gets reviewed, every deficiency gets addressed, and anything affecting safety or performance gets fixed, no exceptions. We're not letting anyone off the hook.

So why does any of this matter to the override conversation? Because the same inflation that hammered the high school is hammering our operating budget every single year. The high school was a one-time crisis that we addressed with cuts, reallocations, additional borrowing, and state relief. But the operating budget faces that same inflation problem annually, and Proposition 2½ makes it impossible to keep up.

When costs rise 4-8% per year but revenue can only grow 2.5%, you fall further behind every budget cycle. That's not a high school problem. That's a structural revenue problem. The high school project is being paid for through its debt exclusion. The operating budget needs an override to close the gap between what services cost and what Proposition 2½ allows us to collect.

The high school didn't break Stoneham's budget. We built a state-of-the-art facility for our kids to learn in, we fought through unprecedented inflation, and we secured millions in state relief to help cover the damage. That project is funded and being paid for. The operating budget crisis is separate, ongoing, and the result of Proposition 2½'s structural limitations colliding with real-world cost increases.

The high school didn't break Stoneham's budget. We replaced a crumbling, outdated facility with a modern school built to serve a new generation of students. We battled through unprecedented economic chaos, and we rallied 30 towns to force the state to help. That's handled.

The real crisis is structural: Proposition 2½ cannot fund basic town services when inflation consistently exceeds 2.5%. The override fixes that ongoing problem. The high school was never the cause--it's just a convenient scapegoat for people who don't want to address the real issue.

This article was originally posted to SaveOurStoneham.org.