LEOMINSTER — In a May 19 presentation before the City Council’s Finance Committee, Mayor Dean Mazzarella began his overview of the proposed fiscal year 2026 budget by projecting an image of a Boston Globe editorial onto the screen in front of him.
The headline reads: “Facing budget shortfalls, Mass. towns need to get creative” — a May 18, 2025 editorial that warned of growing financial strain across Massachusetts communities. In the article, the Globe noted that over 50 municipalities were pursuing Proposition 2½ overrides this year — up from 30 five years ago and just 22 in 2018 — and cited increasing pressure from rising education, wage, health insurance, and utility costs.
“It’s getting tougher and tougher for cities and towns to balance budgets,” Mazzarella said during the committee meeting. He used the editorial as a jumping-off point to explain that while many municipalities are relying on override votes to plug fiscal gaps, Leominster has again proposed a balanced budget that does not require a Proposition 2½ override.
Budget balances without override, but tight margins persist
Mazzarella told the committee that the FY26 budget fully funds both city and school departments within the existing tax levy limit, made possible through new growth, state aid, and a careful use of untapped taxing capacity. According to his presentation, the city expects to bring in an additional $2.4 million from the standard 2.5% property tax increase and another $900,000 to $1 million from new growth.
“The reality is, office buildings — there’s no market for offices. The luck that we’ve had is existing businesses in town seem to be the ones that are buying the office buildings for their use. They have growing capacity, growing need,” Mayor Mazzarella explained
While the city has approximately $6 million in unused levy capacity — meaning it has historically taxed below the legal maximum — the mayor said only about $500,000 might be used this year to close a small gap depending on how much state aid is finalized. Mayor Mazzarella noted that this unused capacity has accumulated gradually since around 2005 to 2007, when the city began consistently raising less than the maximum allowed under Proposition 2½.
City Council President Mark Bodanza commented on the long-term benefit of not taxing to the limit in prior years. “It’s good for the taxpayer,” Bodanza said. “Those are taxes we didn’t collect that we were able to legally collect based on the [Proposition] 2½ statute.”
Capital projects and grant-funded infrastructure
The mayor’s presentation also focused heavily on capital projects funded primarily through grants. According to Mazzarella, the city has been awarded over $20 million in grants for capital improvements not including American Rescue Plan Act (ARPA) funds, with another $8 million currently pending. These grants have allowed Leominster to continue a fourth straight year of enhanced paving and infrastructure work without increasing the burden on taxpayers.
Some of the most substantial grants include flood mitigation projects along Moosnock Brook, improvements at Marcello Avenue and Pierce Street, and the near-completion of Prospect Park. Many of these projects were funded through combinations of MassWorks, ARPA, FEMA, and state disaster relief grants.
The city’s hazard mitigation plan, approved in 2020, positioned it to qualify quickly for emergency and preventative funding after the September 2023 floods. Grants were awarded for culvert replacement on Litchfield Street and flood control on Burrage Avenue — the latter requiring no local match due to the severity of the damage. However, Wendy Wiiks, Leominster’s City Grants Administrator, expressed deep frustration over the lack of federal support, saying, “We should have gotten $30 million from the feds and we didn’t — and that is probably the most disgraceful thing I’ve ever seen in working for government.” Wiiks added that although the city documented $30 million in flood damage, it has been forced to pursue funding “piecemeal for every little problem — 57 sites — and they said no.”
During the meeting, the committee members also emphasized the city’s strategic use of American Rescue Plan Act (ARPA) funds to cover one-time capital expenses — such as the cost of the city’s paramedic program, public safety vehicles, and police body cameras — rather than to fund recurring staff or programs.
School budget reflects growth in enrollment, aid
Leominster Public Schools are proposing a fiscal year 2026 budget totaling $111,313,888, reflecting a $7.58 million increase in net school spending, according to School Business Manager Melanie Mikels. Of that increase, approximately $5.95 million will be covered by additional Chapter 70 state aid, while $1.63 million will come from the city’s local contribution.
Mikels explained that the district’s foundation enrollment rose by 113 students, reaching a total of 6,122. She noted that the increase in low-income student enrollment led to a 9.1% rise in the per-pupil low-income rate, which in turn generated approximately $3.3 million in additional Chapter 70 aid under the Student Opportunity Act.
To meet student needs, the school budget includes $925,000 for 12 new positions, and $882,000 to maintain 12 previously unfilled but essential positions from the prior fiscal year.
Mikels also noted that federal pandemic relief funds, have been fully expended.
“It is important to note the one-time federal funding provided for COVID-19 has now been fully expended,” Mikels said. “We did one-time purchases and accelerated our projects and capital projects and things of that nature, which put us in a really nice position.”
Commercial growth and business outlook
In discussing Leominster’s economic landscape, the mayor said that the city has a strong small business environment, with more than 30 new small businesses opening each year. Most commercial properties downtown and along major corridors are currently filled, he said, and demand for commercial space remains high — even if inventory is tight.
“There’s no place that’s got 3,000 square feet downtown,” Mazzarella said. “Almost everything is full — retail, office space… anything in town is pretty much full.”
Mazzarella pointed to ongoing redevelopment efforts at Twin City Mall, where new owners are advancing a revitalization plan, and at Water Tower Plaza, which he said is nearly at full capacity aside from a vacancy which is going to be occupied by Amazon.
With demand high and availability limited, Mazzarella stressed the importance of retaining every business opportunity. “It gets challenging and frustrating because I don’t want to lose anything,” he said. “If it’s somebody looking for 500 square feet, I want to get that 500 square feet for them.”
Next steps
Following the May 19 session, the Finance Committee reconvened on May 20 to continue its departmental budget reviews. The City Council is expected to vote on the final FY26 budget ahead of the July 1 start of the new fiscal year, as required by state law.