'It's That Drastic': Marblehead Faces Override Debate With 8.4M Deficit, 50+ Projected Town Layoffs

MARBLEHEAD, MA — Marblehead Town Administrator Thatcher Kezer compared a dire financial forecast for the coming year to the 2008 recession — including the need for 50+ town employee layoffs, significant reductions in "quality-of-life services" and deferrals of needed capital improvements — as part of his State of the Town address.

"It's that drastic," Kezer said.

Kezer said those are the consequences of not pushing for a Proposition 2 1/2 override as the town faces a projected $8.4 million budget deficit for the coming fiscal year.

"Ultimately, this is a community conversation about values," Kezer said. "What does the Marblehead we want look like, and are we willing to support it?"

Kezer said deficit is rooted in the structural deficit the town has been facing for years from using surplus or "free cash" — which is neither free, nor cash, Kezer noted — to balance the operating budget, along with reductions in revenues from excise taxes, interest income from expired ARPA funds, building permits and meals and lodging tax receipts related to an economic slowdown, as well as sharp increases in health insurance, a new trash contract and pension obligations.

"This is a perfect storm hurting us," Kezer said.

Kezer said the new trash contract is an increase of $845,000 annually, along with $463,000 in increases in pension obligations and $1.95 million in health insurance increases for town and school employees based on a projected 15 percent increase in premiums.

Superintendent John Robidoux said the schools are also facing $2 million in cuts simply to meet a level-funded budget from fiscal year 2026.

Kezer said projected cuts without an override would include cuts to all town services except "the most critical public safety and operational services."

He said additional layoffs will be needed to, essentially, pay for the unemployment premiums on the initial layoffs.

He said a rule of thumb is that for every two positions eliminated, a third layoff has to happen to pay for that.

Kezer said reductions will not be "done to be fair ... it's done to make decisions as to the priorities of the town."

Kezer compared the deficits to the worst he has seen in town government since he worked in Amesbury during the last Great Recession in 2007, 2008 and 2009.

"The magnitude of the numbers this year, as compared to the past," he said, "in the past, we've always been able to figure it out and make it work. We've made some serious cuts. We've stopped certain programs and deferred certain functions. ...

"The challenge this year is that those (financial projections) may change by tens of thousands, and we are facing a deficit in the millions."

Kezer said the outline was designed to present scenarios to government boards ahead of budget season. Those boards, including the Select Board, will ultimately determine whether to pursue a tax override at the annual town meeting in 13 weeks and at the annual town election on June 9.

An override would then need to pass a two-thirds vote of town meeting members and a majority vote in a townwide referendum.

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