Beverly’s Revenue Shortfall

I appreciated the thoughtful and honest discussion at the June 23 City Council meeting. It was encouraging to hear Councilors openly acknowledge that Beverly is now balancing its budget by cutting essential services, and to see shared frustration over the opaque and rushed budget process.

There was broad agreement that while the opportunity to affect the FY26 budget has passed, we cannot wait any longer to address the deeper structural problem: Beverly does not raise enough revenue to sustain even basic levels of public service. What we are experiencing (cuts to our schools, deteriorating infrastructure, insufficient city services) is the cumulative result of chronic underinvestment, not a one-year shortfall.

The Facts Are Stark

• Beverly spends $18 million less on public education than the state average on a per-pupil basis.
• We spend $36 million less on total city services per capita than the state average.
• Our residential tax burden ranks in the lowest quartile statewide.
• Our residential tax rate is 262nd out of 351 Massachusetts municipalities.

To be clear: There are no “efficiencies,” no creative financing schemes, and no outside grants that will close this gap. The math simply does not work.

And yet, our expectations have not changed. Residents expect safe streets, strong schools, clean parks, and reliable services. Without new recurring revenue, we will continue to fall short. This leaves families, educators, community members, and city workers to bear the consequences.

Leadership Where It Counts

That is why I am heartened by the leadership shown by Councilor Kathleen Feldman and Council President Julie Flowers, who announced a joint effort to explore a Proposition 2½ override. This kind of initiative is politically fraught, but it is the right thing to do. It is real, fearless leadership. For too long, past leaders (including former superintendents and the current Mayor) have avoided this conversation due to fear, hubris, or self-preservation. Kathleen and Julie are choosing public service over political safety. That is the selfless leadership Beverly needs.

Turning Awareness Into Action

With the FY26 budget finalized, the question is: How do we turn this acknowledgment of a revenue problem into action that residents can see, measure, and trust?

The following are recommended steps the City Council can take immediately:

1. Launch an Override & Revenue Task Force

• Deadline: By August 30, 2025

Beverly must form a dedicated task force to develop a roadmap for closing the structural funding gap. This group should be charged with:

• Defining the city service levels and educational services and quality that residents expect
• Quantifying the recurring revenue shortfall based on these expectations
• Outlining viable options: including a Proposition 2½ override or equivalent recurring revenue models (ie, local fees, PILOT agreements, debt exclusions) in order to sustainably fund city priorities

Composition matters. Include representatives from:

• City Council and School Committee
• Educators and municipal employees
• Local business and nonprofit leaders
• Financial experts and neighborhood stakeholders
• Community members and families

This diverse coalition will build public buy-in, improve the quality of recommendations, and reflect the shared responsibility we all have in solving this problem.

Why this matters: The override conversation cannot be led by elected officials alone. A well-structured, community-driven task force signals transparency, distributes ownership, and ensures that any proposed solution reflects the full scope of Beverly’s values and priorities.

2. Publish a Five-Year Operating & Capital Forecast

• Deadline: Before the FY27 budget cycle begins (by November 2025)

Residents and leaders need to see beyond the annual budget cycle. A five-year forecast will:

• Model the fiscal impact of inflation, collective bargaining agreements, pension obligations, and capital needs
• Show what happens if we continue under current revenue conditions
• Clarify tradeoffs between doing nothing versus taking action
• Identify which services are likely to decline or disappear without new funding

This forecast should include:

• Baseline projections (status quo)
• A “level services” scenario (to maintain existing service quality)
• A “target investments” scenario (to restore key services, infrastructure, and staffing)

Why this matters: You cannot solve what you do not fully understand. This forecast will equip residents and policymakers with the data needed to make informed, long-term decisions. Not reactive, short-term fixes.

3. Create a Transparent, Participatory FY27 Budget Process

• Deadline: Publish an updated budget calendar and engagement plan by October 2025

A truly transparent and participatory budget process must:

• Begin earlier in the fiscal year (late fall instead of spring)
• Include a published timeline of key milestones, from departmental budget submissions to public hearings and Council votes
• Provide meaningful public engagement opportunities before budget decisions are finalized
• Incorporate mechanisms for residents to weigh in on tradeoffs and priorities (ie, participatory budgeting workshops, online input tools, neighborhood forums)

Why this matters: Too often, the public only sees the budget after decisions are made. Early, structured engagement gives residents a voice in setting priorities and increases trust in city leadership.

4. Convene Monthly Oversight & Accountability Hearings

• Begin: September 2025

City Council should require monthly public hearings to:

• Review actual spending vs. budgeted amounts
• Report on free cash projections, reserves, and revenue collection trends
• Monitor the impact of FY26 cuts across departments
• Track enrollment changes, caseload ratios, and key service indicators (ie, teacher-student ratios, DPW/DPS staffing levels, overtime costs, etc.)

Consider aligning these sessions with:

• Quarterly macro financial updates from the Finance Manager
• Budget status reports from the Mayor’s office
• In-depth financial updates from the Superintendent and department heads

Why this matters: Fiscal stewardship does not stop after the budget is passed. Regular updates allow the Council (and the public) to stay informed, catch warning signs early, and avoid deeper crises down the road.

A Final Word

Families, city staff, and local businesses deserve clarity: What can we afford? What are we giving up? And what would it take to build the Beverly we all want to live in?

No one likes paying more in taxes. But pretending we can deliver more with less (year after year) is both disingenuous and unsustainable. We are well past the point of rearranging deck chairs. The sooner we face this reality, the sooner we can take real action to preserve, and even improve, the services and values that define this community.

It is time to stop sticking our heads in the sand. It is time to be honest with residents, and with ourselves.

I am hopeful that Kathleen, Julie, and the City Council act decisively to:

• Establish a task force this summer
• Set clear milestones
• Communicate consistently
• And show residents that the June 23 meeting was not the end of the conversation, but the beginning of real, measurable change.

Let's lead with urgency, transparency, and courage.

Dr. Matthew C. Ferreira