Due to a MA law called Proposition 2 1/2, no matter how much costs rise, Reading’s primary revenue source—property tax—only increases 2.5% a year. The law was designed to keep taxes predictable, while giving voters the power to approve local tax increases beyond that amount as needed.
Over time, inflation has regularly exceeded the law’s 2.5% property tax limit, making it difficult for cities and towns to fund schools, public safety, and municipal services without seeking periodic overrides to bridge the gap.
Due to these inflationary pressures and despite thoughtful town budgeting, Reading has increasingly relied on free cash to balance the operating budget, which is not sustainable for FY28 and beyond.
The Reading Select Board unanimously agreed on the need for an override and finalized the decision to place an operational override of $6.5 million on the state election ballot, held on November 3, 2026.
Override Details
MAJOR COST PRESSURES
Inflation, especially fuel & labor
New trash contract
Health Insurance Costs
Insufficient state aid
FY28 BUDGET PROPOSAL
+ 3.75%
ANTICIPATED FREE-CASH USAGE
FY27 $6.5M
FY28 $9.8M
Continuing to use these increasing amounts of free cash to cover the rising costs and balance the operating budget is unsustainable for FY28 and beyond.
A $6.5M override allows us to support the FY28 budget using an additional $3M in free cash, which is the amount of free cash typically generated by the town annually.
THE BOTTOM LINE
How did we get here?
This wasn’t last minute! The Finance Committee and Select Board have been in discussion about the need for an override for over a year. The decision to place it on the ballot was voted on and finalized by the Reading Select Board on Tuesday, July 28, 2026.
WHO MAKES THE BUDGET?
WHERE DOES THE REVENUE GO?
FY27 Revenue Allocation
Largest Categories Shown
Source: readingma.gov
Schools
Public Safety
Public Works
Benefits
Capital & Debt
20%
8%
43%
11%
6%
What has the town done to control costs?
Renegotiated the health insurance agreement - $3.9M in projected savings over 3 years
Renegotiated property and casualty insurance
Hiring freeze: left some positions unfilled
Increased Fees
Cut office supplies by 10%
Capital budget reduction: 5% to 4.5% in FY27
Pensions are expected to by fully funded by FY32, potentially freeing about $3M
Are the town’s finances audited?
YES
The Town of Reading conducts an independent financial audit annually.
How Does Reading Compare?
TAX RATE
Reading’s tax rate is highly competitive among its neighbors (source)
Homeowners in Reading face a lower tax percentage on their property value than those in North Reading, Wakefield, Lynnfield, and Wilmington
SCHOOL SPENDING
Reading spend less per student than most of our neighbors AND less than the state average (source)
Reading's elementary test scores have improved dramatically in the years since the last override
Former superintendent, Dr. Milaschewski, attributed this to the addition of assistant principals and adjustment counselors, allowing principals and teachers to focus on instruction
How Much Will It Cost Me?
$736 per year for the average single-family assessment (based on FY26 data)
Don’t rely on averages.
Find out what an override will cost your household.