Peabody Median Tax Increase $368 Amid 'Grave Concerns' Over Headwinds

PEABODY, MA — Despite what he called "grave concerns" over recent health insurance premium increases and how they will affect future budgets, Peabody Mayor Ted Bettencourt said improved growth allowed for a slightly lower property tax increase for the median single-family home than anticipated at the annual City Council classification hearing on Tuesday night.

Bettencourt said his office was requesting what amounts to an increase of $386 for the median single-family home compared to the $398 projected in the spring. The recommendation included a 1.75:1 burden shift on commercial property owners — which is the maximum shift allowed by state law — and the use of $1 million in free cash to mitigate the tax burden.

The City Council approved the mayor's tax classification proposal following a public hearing in which no members of the public spoke online or in person.

The proposal maintains Peabody as the third-lowest tax rate out of 34 Essex County communities and with an excess tax levy capacity of $14.9 million — the additional amount the city could tax residents without requesting a Proposition 2 1/2 override.

Bettencourt said he was happy to "report on the continued strength of our city's finances" but said a 10 percent increase in insurance rates was troublesome given that consultants told his office the city should expect "double-digit increases for the foreseeable future."

"This is the largest year-over-year increase since I've become mayor and probably many years before that," he said. "Obviously, this is a grave concern and not sustainable for an operational city budget."

He added that an 18 percent in retiree health insurance was "not quite expected," and that along with a 4 percent in pension obligations and $700,000 in additional Essex Tech assessments are non-discretionary "escalations that concern me and concern all of us as we move forward year to year."

He said city property values continued to rise with a nearly 6 percent increase year over year putting the median single-family home value in the city at $615,000.

"Certainly the highest in Peabody's history," he said of the figures. "Homes in Peabody continue to come off the market quickly and often well over asking price. Of course, our entire region has seen housing market gains over the past decade.

"But make no mistake, our investment in Peabody's future continues to pay dividends by making our city among the most desirable places to live in Massachusetts, and again among the hottest real estate markets in the entire country."

(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.)