Town Administrator Thatcher Kezer told the Select Board Wednesday night that the town faces a $7.7 million deficit for fiscal 2027, presenting two stark budget scenarios that would either dramatically shrink town government or introduce new fees and additional cuts to maintain some services.
“This is not a surprise, but it is shocking what we’re facing right now,” said Town Moderator Jack Attridge after hearing the presentation.
The deficit, currently calculated at $7,736,211, reflects rising health insurance costs, inflation and limited revenue growth under the state’s property tax limits.
Scenario A: Major service reductions
Under Scenario A, the town would balance the budget mainly through cuts.
“In order to balance our budget on the town side, we had to prioritize functions that protect life and property,” Kezer said. “And the end result is we had to defund six departments.”
Those departments are: Community Development & Planning, the Cemetery Department, the Health Department (except for the required health agent), the Council on Aging, the Abbot Public Library and Recreation and Parks.
Those cuts would eliminate 56 positions out of the town’s roughly 185-190 municipal jobs, according to Thatcher.
Scenario B: Fees and shared cuts
Given the severity of those reductions, Kezer also presented Scenario B, which seeks to maintain most municipal services through a combination of new revenue and additional cuts.
The plan includes:
- A new curbside trash fee, expected to generate about $2 million annually
- An additional $1.5 million reduction in the school budget
- Additional municipal spending cuts
The trash proposal would shift the cost of curbside trash, recycling and disposal to residents through a fee of about $254.64 per household per year, or roughly $21 per month, based on an estimated 8,000 households. Residents who qualify for tax exemptions would receive discounts, and households could opt out by using the Transfer Station instead. (Residents would still need to purchase Transfer Station stickers.)
“What this would do is make available just over $2 million in the general fund to allow us to use those funds to go back and fund those departments that are defunded in Scenario A,” Kezer said.
The additional school reduction would bring the school system’s total proposed cuts to about $3.4 million, after the district already reduced its fiscal 2027 request by $1.9 million.
Library closure with both scenarios
Even with Scenario B, the town would still lose at least one major service.
Abbott Library Trustee Gary Amberik said the library would likely close in December 2026 under both scenarios, unless voters approve a tax override.
Even with the less draconian Scenario B, Marblehead’s director of community & development planning, grant coordinator and sustainability coordinator would all be cut.
Financial pressures
Kezer said the town’s budget challenges are not caused by an expanding workforce.
From 2018 to 2026, the town’s employee count has remained relatively stable, declining from 199 positions to about 190.
“Our budget challenges are not a result of huge increases in the number of employees,” Kezer said. “It is driven by health costs, inflationary costs, trying to keep employee salaries at the market rate.”
Health insurance remains a major uncertainty. The town is awaiting final rates from the state’s Group Insurance Commission, currently projecting an 11% increase, down from an earlier 15% estimate.
“If they vote less than the 11 we’re carrying … [that] would decrease that gap,” Kezer said.
‘Perfect storm situation’
Several Select Board members signaled early support for Scenario B as the less disruptive option.
“My vote would be for us to proceed with Option B minimizing the drastic change and disruption of service levels that Option A would dictate,” said member Erin Noonan.
Select Board member Moses Grader wasn’t sure that voters would agree to paying $250 a year for trash pick-up, in addition to an override.
“We’re in a perfect storm situation,” Grader said. “Dramatic increases in health care costs, big reduction in free cash.”
But some residents raised concerns about shifting costs to residents through trash fees.
“All I can think of is, now we have a system in place that’s just going to get hiked,” said Jonathan Klopman. “We’ve opened the door to another massive program that is going to affect people.”
Resident Al Jordan also criticized the approach, saying it could hurt working residents and seniors.
“Real Marbleheaders don’t like spending money … unless it’s spent wisely,” Jordan said. “This isn’t a wise plan.”
Override discussion ahead
Town officials emphasized that both scenarios are meant to illustrate the choices facing Marblehead as leaders prepare a potential tax override proposal for voters.
Select Board members plan to review three potential override options at their meeting next Wednesday, offering residents a range of spending and service levels.
Noonan suggested three options.
- Raise just enough money to restore current services.
- A mid-tier option that would include maintenance for town assets, including rebuilding the stabilization fund.
- A top-tier option that would include annual capital planning.
The School Committee meets Thursday, March 5, at 6 p.m. to discuss next steps.
