Frequently Asked Questions

Like many Massachusetts communities, Marblehead faces a structural budget gap driven by rising costs and state-mandated limits on property tax growth under Proposition 2½.

To balance the FY27 budget, the town has identified approximately $7.7 million in cuts across both school and municipal services. If enacted, these cuts would lead to at least 35–40 job losses, reduced services, and deferred investment in critical infrastructure.

This challenge has been building for years, with the town relying on service cuts and one-time funds to close the gap in recent years. Marblehead has now reached a point where further reductions would meaningfully impact core services.

Under state law, increasing property tax revenue beyond 2.5% requires voter approval of a general override at Town Meeting and in a town-wide election. 

For Marblehead believes a general override is now necessary to prevent further cuts and ensure a more sustainable financial footing going forward.

On March 25th, the Select Board voted to develop a comprehensive, multi-year, tiered general override proposal. If adopted and sent to Town Meeting, this would allow voters to choose the level of funding - and corresponding services - they wish to support.

The proposed structure includes three tiers:

• 1a: Restore

• 1b: Stabilize and Build

• 1c: Invest and Improve

Each tier is intended to support both school and municipal services for at least three years.

The Select Board is continuing to work with town departments and relevant boards and committees to define the specific costs and service levels associated with each tier.

Passing a general override requires a two-step process:

1. Town Meeting vote (May 4 & 5):
   Residents vote on a warrant article to place a general override question on the June ballot. This requires a simple majority.

2. Town-wide election (June 9):
   If approved at Town Meeting, voters will have the opportunity to vote on a multi-tier, general override as part of the town-wide election.

Town Meeting works through a long list of items called the “warrant.” This year there are 40 separate articles to vote on. Each article can involve presentations, questions, debate, and amendments before a vote.

Because of that, it’s possible Town Meeting may take more than one night to complete. While it starts on May 4th, a second session (May 5th) is often required in case all items aren’t finished.

In addition, articles are usually taken in order, but Town Meeting can vote to take items out of order. That means we expect the override to be addressed on the first night, but it’s not guaranteed.

Plan to attend on May 4th, but be prepared for a second night on May 5th if needed.

Proposition 2½ is a Massachusetts state law that limits how much cities and towns can raise in property taxes each year.

Under this law:

• A town’s total property tax revenue can only increase by up to 2.5% annually, regardless of how much costs rise

• Communities can receive some additional revenue from new construction and development, but in built-out towns like Marblehead, this growth is limited

• To raise more than 2.5%, a town must seek voter approval through a general override

Because property taxes are Marblehead’s primary source of revenue, Proposition 2½ creates a structural constraint: increasing costs for services including public safety, healthcare, infrastructure and public education outpace the town's ability to generate revenue.

A general override is the only way for residents to approve additional funding to maintain or improve services beyond what the 2.5% limit allows

Yes and no.

There are three different types of overrides:

• General overrides permanently increase the tax levy more than the 2.5% allowed under Proposition 2½  to support ongoing town and school services.

• Debt exclusion overrides allow municipalities to raise debt to fund specific capital projects like buildings and equipment. The override temporarily raises the tax level the above the Proposition 2 1/2 limits to pay down the debt; once the debt is paid off, the increased levy is removed.

• Capital expenditure overrides are one-year tax overrides to pay for one-time purchases, etc. The one-time increase in the tax levy applies for one fiscal year.

Marblehead has consistently supported debt exclusion overrides for projects like the Brown School construction, Mary Alley building renovation, High School roof replacement, and major equipment purchases.

However, Marblehead has not passed a general override since 2005 to support day-to-day municipal and school operations.
For more than 20 years, the town has managed rising costs within the limits of Proposition 2½, largely through cuts and deferrals. That approach is no longer sustainable, and the current budget gap reflects that reality.

A general override would provide the ongoing funding needed to maintain services and restore financial stability. 

It is not uncommon to have your taxes increase more than 2.5% or, in some cases, even decrease. 

Two things are potentially at play:

• Changes in assessed values: Proposition 2 ½ limits the increase in the town’s overall tax levy, which is the total amount they can collect from property tax. Individual tax bills are based on the relative value of your property. If assessments increase in your neighborhood, you could see increases greater than 2.5%, but to ensure that the overall tax levy doesn’t increase more than 2.5%, taxes for other property owners in town may have increased less than 2.5% or even decreased. 

• Debt Exclusions Overrides: Overrides to support capital projects are incremental to the base tax levy. While the base tax levy may not increase more than 2.5% under Proposition 2 ½, the addition of successful debt exclusion overrides result in an increase greater than 2.5%. Those debt exclusion overrides are removed from your tax bill when they are paid off. 

Either one of these scenarios can lead to changes in your tax bill that are greater than 2.5%.