Peabody Mayor Expects Layoffs, Service Cuts In Budget

PEABODY, MA — Peabody Mayor Ted Bettencourt said he is considering drastic measures to balance the city budget for the fiscal year beginning July 1.

"With so much uncertainty around our city budget, I am preparing for worst case scenario, which is millions of dollars in lost tax revenue and state aide," Bettencourt said. "As a result, we will have to make some very painful decisions and consider options such as layoffs and furloughs of city employees across every department [and] a reduction or redesign of city services and cuts to programs many people depend on."

Before the coronavirus, Peabody was planning on a budget of about $160 million, with about half of that going to city schools. But the crisis has meant massive reductions in real estate taxes, state aide and local receipts, including motor vehicle excise taxes, meals taxes and hotel room taxes.

"All three of these revenue sources face severe shortfallas and uncertainty. RE taxes coming in well below initial projections," Bettencourt said in a video message Monday. "Even with extension [of the real estate tax deadline to June 29], we face a significant shortfall as homeowners struggle with job losses and many businesses remain shuttered."

Bettencourt compared a "typical year" to the current situation the city is facing:

The city's largest taxpayer, the Northshore Mall, reopened last week after a three-month closure. Peabody's restaurants, care dealerships and hotels —which all contribute to local receipts —have either been closed or operating in reduced capacities.

Bettencourt noted that in a typical year he would have already resented his budget proposal and city council would have approved it. But communities across Massachusetts are in a "holding pattern" as the state tries to finalize projections for local aide.

"Behind the devastating human roll lies an economic crisis our country has not seen since the Great Depression," Bettencourt said. "I certainly regret that we must consider such measures, as they create additional pain for our community during a public health emergency."

Other Massachusetts cities are trying to close revenue shortfalls without layoffs of city workers. In Beverly, for example, Mayor Mike Cahill proposed a budget that does not include layoffs but does include tax hikes and cuts across all departments.