All town departments in Marblehead are being instructed to create level-funded budgets with no additional spending for fiscal year 2027, according to Finance Director Aleesha Benjamin at a Nov. 3 meeting. That’s despite contractually obligated 3% raises for many town employees and rising utility, health insurance, trash and other costs.
In addition, Finance Director Aleesha Benjamin is projecting town revenues will drop by $514,462 in FY27 and she is predicting $5 million in free cash (money left over from the previous year), down from $7 million last year.
“In order to balance (the budget) — which we have to balance, right? — there are going to be reductions in budgets,” Finance Committee Chair Alec Goolsby said at a Nov. 3 meeting.
Benjamin said a Prop 2 1/2 override vote this spring is inevitable.
“I just don’t think it’s feasible for the town to live with 2.5% anymore,” Benjamin said. “Inflation is at 3%. The state knows this is a problem and they tell cities and towns, ‘Just put forward an override.’ The problem is, not everybody’s educated on what an override is and what it means. And why, the longer we push it off, the more it costs in the long run.”
Marblehead voters haven’t approved a general override since 2005.
Gloomy forecast
According to Benjamin, the town’s interest income is expected to drop $800,000. Building permits and fees are projected to dip by $100,000, due to a slowdown in local building. Local automobile excise taxes are predicted to drop $200,000.
While state aid is expected to increase 1% to $9 million, it will not keep pace with inflation at 3%. The town is projecting $2.1 million in additional property taxes (the limit under Proposition 2 ½), bringing the total amount of property taxes to $77.8 million.
Meanwhile, costs are expected to soar. The town is about to sign a new trash and recycling contract that is predicted to increase costs by $800,000 to $1 million. Employee insurance costs are increasing 14%, and personnel costs (which make up 80% of the town’s budget) are set to climb about 3%. Pension costs are also expected to rise.
Goolsby said Town Administrator Thatcher Kezer will have additional information at the State of the Town, possibly on Jan. 28. Goolsby also presented a budget timeline leading up to Town Meeting in May.
