'A Significant Gap': Marblehead Structural Deficit Looms As Tax Override Push Unlikely

MARBLEHEAD, MA — While Marblehead Town Administrator Thatcher Kezer said the town will not require a property tax override this spring to pay for level-funded services, he allowed that a "significant gap" in revenues compared to expenses remains in the coming years as the town deals with its structural deficit.

Kezer cited increased revenues from hospitality taxes, higher town fees and interest, as well as the use of $7 million in so-called "free cash" surpluses, as reasons why a Proposition 2 1/2 override is not likely to be sought this year. But he said the reprieve from a series of failed override requests in the town in recent years does not spare residents from future hard choices with a budget gap of $14 million projected over the next four years.

"The whole takeaway on this is that based on our revenue projections and our expenditure projections — and we've talked about this before — we have a gap," Kezer said during his State of the Town address on Wednesday. "We have a significant gap. And we have to figure out how we address it. We are addressing it by finding additional revenue sources as well as new growth revenues as well as doing some analysis of override scenarios and what would they look like over the term of this.

"Much work to be done."

What some residents would consider the relatively good news of there not likely being a tax increase to fund a general override of Proposition 2 1/2 — which would mean it would be recurring in perpetuity — there will likely be frustration in some circles that argue that, at some point after repeated requests, residents will have to agree to pay more to fund municipal salaries and services.

The Marblehead Education Association made demanding an override to pay for improved teacher salaries and expanded support services to "fully fund our schools" a foundation on its arguments during the 12-day teacher strike this past November.

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Kezer and School Committee members repeatedly pushed back on those requests — noting that while a general override may eventually be deemed necessary, the historical unwillingness of voters to support one at the ballot box would put school staff levels and services in jeopardy if one was once again sought, and it once again failed.

Kezer has made getting off the "free cash" reliance a key tenet of his budgeting over the past three years with his stance that the town must build up its cash reserves instead of relying on them to balance the budget vital to curbing the structural deficit.

"That will be an ongoing effort," he said. "We're going to flat-line for this year and then continue that effort (in the future). ...

"As we make efforts to increase our revenues, we also want to make efforts to protect the vulnerable folks who would be impacted by the efforts to bring up our revenues to match our service obligations."

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Kezer did say that residents will be asked to approve capital improvement overrides for the new high school roof and HVAC system and Mary Alley Building renovations. Unlikely general overrides, which essentially become permanent parts of the budget, capital improvement overrides are paid for over a specific length of time until the project cost borrowing is paid.

(Scott Souza is a Patch field editor covering Beverly, Danvers, Marblehead, Peabody, Salem and Swampscott. He can be reached at Scott.Souza@Patch.com. X/Twitter: @Scott_Souza.)