Lexington's Capital Stabilization Fund faces annual drawdowns exceeding $20 million by FY2031 to cover new high school debt, up from $800,000 in FY2027, according to minutes from a Wednesday, June 10 Financial Summit published on the town's Granicus portal on Monday, July 21.

The fund held approximately $51.2 million at the end of FY2026. At the projected pace, it will be drawn down heavily within five years.

Select Board Chair Jill Hai opened the summit by identifying three costs outpacing Lexington's levy growth: compensation, capital plan debt service after the high school project, and residential development paired with declining commercial development. The meeting brought together the Select Board, School Committee, Appropriation Committee, and Capital Expenditures Committee at Estabrook Hall in Cary Memorial Building.

Shared expenses climb 6.4%

Superintendent Julie Hackett pushed to add shared expenses to the list of cost pressures the boards will tackle in future summit meetings. Shared expenses cover employee benefits, retirement, debt service, and facilities costs split between the school and municipal sides. That line totaled $82.3 million in FY2027, a 6.4% jump from FY2026, according to the town's FY2027 budget presentation.

The LPS operating budget grew at a slower pace: $151.7 million in FY2027, up 3.9%.

School Committee member Jay urged the group to sort services into three categories: mandated, essential, and contractual. Appropriation Committee member Michelson added the Minuteman Regional School budget as another cost driver.

Staffing cuts and the deficit

The district eliminated 42 positions in FY2026 and proposed cutting 13 more in FY2027, saving approximately $4.5 million against a structural deficit estimated at $7 million, according to Town Manager Steve Bartha's April 2026 memo. The remaining gap of about $2.5 million was held in reserve.

Bartha's memo also noted that cost-of-living adjustments for school employees ran 16% higher than those on the municipal side, compounded over nearly a decade. He described Lexington as entering a period of rising health insurance costs, stagnating commercial growth, and the start of a major debt financing program for the high school.

Revenue split on the table

The full group agreed that the revenue allocation formula, which determines how new tax revenue is divided between schools and the municipal government, needs further discussion. Hai proposed a meeting of the summit chairs to organize topics before the next full session.

No date has been set for that follow-up meeting.