Marblehead Select Board Votes On Single Tax Override Intention

MARBLEHEAD, MA — A bit of a late Proposition 2 1/2 tax override swerve Wednesday night saw the Marblehead High Select Board vote unanimously on a statement of intent to pursue a tax override to plug the structural deficit gap in the Fiscal Year 2024 budget while deferring the pursuit of a stabilization fund to buffer against future emergency expenses.

The Select Board had been pursuing the dual option — the one-year stop gap as well as the creation of the stabilization fund — but changed course on the stabilization fund after Select Board member Erin Noonan expressed concerns at last Thursday's meeting that the double ask might be too much on voters in a year when the stop-gap override is needed to maintain current services.

"The town's current intent is to propose a single override for the Fiscal Year '24 budget that prioritizes addressing the Fiscal Year '24 structural deficit and significantly reduces the town's reliance on free cash as a revenue source," Select Board Chair Moses Grader said. "Our intent is to defer on proposing a second override to accelerate funding of a stabilization fund so that we don't overburden our taxpayers this year by addressing the stabilization fund this year, which could add more complexity to the override in consideration of future challenges."

Grader said putting off the stabilization funding would allow the newly installed financial team, using the town's modernized information systems, time to identify a longer-term strategy to address the structural financial challenges.

The proposed override is intended to level-fund all departments — with Select Board member Alexa Singer noting the specific inclusion of the School Department — at 2023 levels with the addition of contractual obligations, utility costs and other non-negotiable inflationary price increases.

The exact amount of the override proposal, and its cost to the average single-family homeowner, has not been determined.

(Also on Patch: 'Gut-Wrenching': Marblehead Superintendent Reveals Non-Override Budget)

The town will present an Article 30 budget to the annual town meeting on May 1 that meets only the money available — and will include significant reductions to many departments, including schools — for approval, as well as the override proposal in Article 31.

"The town will present a balanced budget that assumes no override funding," Grader said. "To present a balanced budget, the town will propose cuts to operational line items that eliminate the Fiscal Year 2024 structural deficit.

"The town will determine a final structural deficit amount as part of the Fiscal Year '24 budget process and will identify the specific cost savings used to eliminate the Fiscal Year '24 structural deficit — endeavoring to cut services with the least impact on the town's operating performance and service delivery."

If approved by a two-thirds vote of town meeting members, the override proposal will go to a townwide vote at the June 20 annual town election where a majority will be needed for it to pass.

A $3.1 million supplemental school budget general override failed by a two-to-one vote last June.

The last successful operating budget override in Marblehead was in 2005.

"The town has also been aware over the last four years that its overreliance on free cash to balance its annual operating budget would be unsustainable," Grader said. "And that ultimately an operating override would be needed to address an underlying long-term structural deficit."

The statement of intent said that the town and schools had been careful to deploy pandemic funding — such as that from the American Recovery Plan Act — to one-time, fixed costs so as to not carry those commitments after the pandemic funding ended.

Town Administrator Thatcher Kezer has acknowledged that the town will not be able to completely ween itself off what he called the "free cash wagon" in one year without a punishing override, but that while using what he called a "safe" estimate of the projected free cash this year, this process will begin to progressively lessen the reliance on what are intended to be one-time uses of funds only in case of a budget surplus.

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