PEABODY — Mayor Edward A. Bettencourt Jr. recommended an increase of nearly $12.8 million to the city’s budget for fiscal year 2024.
City councilors reviewed part of the $187,216,576 budget proposal in a meeting of the Finance Committee, sitting as the committee of the whole, on June 15.
The budget would result in a $309 increase in average residential taxes from a proposed 5.1% tax-levy increase.
Bettencourt pointed out that Peabody’s residential taxes would remain among the lowest in Essex County, and highlighted that nondiscretionary costs would equal around $164 of the average tax increase.
“There is no negotiating and no wiggle room,” Bettencourt said. “These nondiscretionary bills keep going up each and every year.”
Among the $4.1 million increase in nondiscretionary costs pointed out by Bettencourt were increases of around $1.8 million in health-insurance costs, more than $860,000 in retirement funding, and $475,000 in debt service.
“Right off the bat, before we even sit down to go through department needs… This is what we have to work with,” Bettencourt said.
The mayor emphasized the city’s efforts to support municipal workers with a cost-of-living adjustment, which will be reflected in collective bargaining agreements. A 3% cost-of-living increase for city workers translated to around an average of $72 in increased taxes.
“I have always felt strongly that our hard-working municipal employees, who deliver the services that our residents and business owners expect, deserve a cost-of-living increase, particularly during these high-inflationary times,” Bettencourt said.
Bettencourt noted that the tax burden would also increase when a cost-of-living bump for school employees was factored in.
Overall, almost half of the proposed $187 million would be spent on education, which saw the largest budget bump, with a $7.2 million proposed increase bringing education funding to $96 million, including $5.2 million for the Vocational School Assessment.
$4.2 million of the increased funding would be via Massachusetts Chapter 70 education aid, part of a $5.1 million increase in state funding.
Around $46.4 million in total state aid was proposed to be used to fund the city’s budget, along with $1.5 million in federal relief provided by the American Rescue Plan Act, with ARPA funds expected to be drawn for the final time in fiscal year 2025.
Councilor-at-Large Anne Manning-Martin asked if the city has prepared for when ARPA funding eventually runs out. Bettencourt said the city is ready to face that scenario.
“I believe certainly that there’s going to be challenges when there’s no longer ARPA money,” Bettencourt said. “But I think we’ve been preparing for that.”
He noted the city has been adding to its reserves and would use increased local revenues to allow it to withstand the loss of funds.
Tax levies of more than $121.1 million were the largest portion of projected revenue, an approximately $5.9 million increase from fiscal year 2023. Nearly $20.7 million would also come from local revenues. Total revenues were projected to be nearly $192.9 million.
The committee approved the city side of the budget, water-and-sewer budget, and recreation enterprise budget on June 15. It will reconvene June 20, again sitting as the committee of the whole, to review the proposed fiscal year 2024 operating budget for education.
