The tax bill of a median single-family home valued at $807,400 would increase by $252.38 should voters approve a $2.5 million general override in the June municipal election. However, a two-thirds majority of Town Meeting attendees in May must first approve sending the general override to the ballot box.
The general override aims to address a projected structural deficit in the fiscal year 2024 municipal budget. Raising the additional property taxes would cover the town services cut from the proposed $112.5 million fiscal year budget under Article 30.
These cuts include the following:
— Three fire positions.
— A public works position.
— Two police positions.
— 32 school positions plus programs (freshman sports, middle school world languages) and facility maintenance.
Marblehead has passed several debt-exclusion overrides over the years, most recently in 2022 for nearly $25 million worth of capital projects. However, 18 years have passed since the last time Marblehead approved a general override on June 15, 2005, for $2.7 million to fund supplemental expenses of several town departments.
Unlike a debt-exclusion (temporary) override, which comes off the rolls once a building or project is paid for, a general override becomes a permanent part of the tax base. This means the town will be allowed to increase the tax levy by 2.5 percent above a new, larger number in subsequent years.
Over the years, the town has relied on free cash (unspent money from previous fiscal years) to balance budgets, avoiding the need for a general override. This revenue source is declining. For instance, the current fiscal year budget of approximately $100 million is balanced with $10.6 million in free cash. However, in fiscal year 2024, Marblehead’s free cash is projected to be $8.5 million, a $2.1 million decrease from fiscal year 2023.
This decline in free cash, employee health insurance, and contractual obligations are the main drivers behind the $2.5 million deficit.
“The earlier you address these issues — the less costly it will be in the long run,” said Town Administrator Thatcher Kezer. “If you wait another year, the gap gets bigger.”
He said the objective with the override is to stabilize the municipal budget and maintain services in the next fiscal year. This would provide the finance director, town treasurer and Kezer time to develop a more detailed strategy, he said.
The Marblehead Current asked Kezer if the town would return for another general override in 2024, and he replied, “Don’t know yet.”
“[It would be] better to pass one this year and see if we can make it through next year without one,” he said. “But I can’t say ‘yea’ or ‘nay’ at this point.”
Overall, Kezer emphasized the need for a proactive approach to managing the town’s finances, stating that “the information systems being put in place and implemented” would allow for a more detailed and effective financial strategy going forward. The town has invested money in ClearGov, a cloud-based financial software platform.
“We need to come up with a coherent strategy where we have a systematic way of keeping up with the cost of goods and services,” Kezer said. “New growth is just one of the revenue sources that I think we need to put some focus on and grow.”
Kezer continued, “Healthy municipalities usually have a good amount of ‘new growth’ revenue. The goal is to ask for general overrides only periodically, like every five years, to keep up with inflation.”
Moses Grader, in reading a statement of intent, said the general override would allow the newly installed finance team time to develop a longer-term strategy to address Marblehead’s financial challenges, utilizing new information systems.
“By taking this slower and more prudent approach, we believe we can take the time to address our challenges and streamline the override process this year,” Grader concluded.
Learn more and research the 2023 Town Meeting issues at: marbleheadcurrent.org/townmeeting2023.