Gloucester's $179 million budget, line by line

What a city budget is

A city budget is a one-year spending plan. Gloucester's fiscal year runs from July 1 to June 30, so "fiscal 2027" started this summer and ends next June.

The budget is split into separate pots of money called funds. The biggest is the general fund, at $155.3 million. It pays for schools, police, fire, public works, the library, city offices, debt payments, pensions and employee health insurance. Four smaller funds, called enterprise funds, run the water system, the sewer system, Talbot Rink and the harbor. They are supposed to pay for themselves through the rates and fees their users pay. A fifth, the Community Preservation Act fund, can only be spent on open space, historic preservation, affordable housing and recreation.

Under the city charter, the mayor writes the budget and the City Council approves it. The council can cut any line, but it cannot add money to a line unless the mayor recommends it. The council had 45 days to act once it received the budget, and any item it did not act on would have been approved automatically. Mayor Paul Lundberg presented this budget May 5. The council adopted it June 16, three days before the deadline.

Schools work differently. Massachusetts law gives the schools one bottom-line amount. The council votes on the total, and the School Committee, not the council, decides how it is spent.

The 267-page budget book is the city's own explanation of all this. This year it adds goals and performance measures for every department: 94 goals and 149 measures in all. This story draws on that book, the city's Financial Policies, minutes of all seven public meetings where the budget was reviewed and voted and the council and committee meetings held since.

Where the money comes from

About three of every four dollars in the general fund come from property taxes: $113.2 million this year, up 3.7%. State law, known as Proposition 2½, limits how much the total tax bill for the whole city can grow. It can rise 2.5% a year plus the value of new construction, which the city estimated at $950,000. Voters can approve more through an override or a debt exclusion. Gloucester has not asked voters for an override this year. About $6.9 million of this year's tax total is for debt that sits outside the limit, including the East Veterans Elementary School and sewer and water projects whose costs were shifted onto the tax bill.

State aid brings in $18.2 million, mostly $12.6 million in Chapter 70 school aid. Local receipts add about $20 million: motor vehicle excise ($4.3 million), hotel and meals taxes, beach parking ($2.9 million), trash fees ($2.77 million), ambulance charges ($1.85 million) and building permits ($1.25 million).

The rest, about $3.6 million, is money moved in from other places. That includes two pieces of one-time money the budget book says will not repeat: $1 million from the city's capital stabilization fund to buy the new trash carts and $747,571 in free cash. It also includes $856,400 that the water, sewer, rink and harbor funds now pay the general fund for office work done on their behalf, under a revised policy that charges each 3.9% of its direct costs.

Where the money goes

The single biggest item is the schools: $55.8 million, or 36% of the general fund. Next come fixed costs the city has little short-term control over. Pensions ($14.3 million), employee health insurance ($12.1 million) and debt payments ($15.4 million) together take about $42 million. The budget book says fixed and centrally budgeted costs make up about 32% of the general fund.

Public safety, mostly police and fire, costs $22.7 million. The Department of Public Works costs $17.2 million, including the upkeep of every city and school building, trash collection and snow removal. City offices such as the clerk, assessors, treasurer and information technology cost $6.7 million combined. The Sawyer Free Library gets $1.4 million.

The chart below shows every area. Tap any bar to open that area's departments in the line-item search further down.

What went up and what went down

Up: trash

The largest single increase is trash. The city's contract for curbside trash and recycling collection rises from $2.5 million to $4.77 million, according to the budget, and the trash and recycling budget as a whole rises 69%, to $4.9 million. The council voted 9 to 0 on June 9 to allow a five-year contract, which went to Casella Waste Systems. It replaces the purple bag program with automated carts. In past contracts, recycling pickup was negotiated at no cost, DPW Director Michael Hale told the council Aug. 25. Under the new one, the city pays for it.

Collection under the new system started Oct. 1. Each unit in homes and buildings of up to four units now pays a fee on the utility bill: $300 a year for standard 65-gallon carts, or $200 for a smaller 35-gallon trash cart. Residents 65 and older get 50% off at their primary home. The council approved the fees Sept. 8, 9 to 0. Hale told the Budget and Finance Committee Sept. 3 that a typical household spent about $208 a year under the old system. Even with the new fee, the general fund will still pay roughly half the cost this year, Chief Administrative Officer Kelly Dolan told the Budget and Finance Committee Sept. 3.

Up: schools

The schools get $55,778,897, up $1.55 million, or 2.9%. That is $300,000 more than the mayor first proposed. The budget book says the superintendent put the School Committee's level-service request about $1.2 million above the mayor's recommendation. Superintendent Ben Lummis told councilors June 2 that about 88% of the school budget is salaries and benefits, so reductions mostly mean fewer positions, and that the extra $300,000 would keep three teaching positions. School Committee Vice Chair Bill Melvin told the council June 9 that if the planned staff cuts went through, the district would have lost 38.2 positions since June 2024.

Up: health insurance, pensions and debt

Health insurance for city employees rises $1 million, or 9%, to $12.1 million. The city's payment to its retirement system rises $938,054, or 7%, to $14.3 million. Debt payments rise $330,997 to $15.4 million. These three lines alone account for about $2.3 million of the increase.

Up: water and sewer operations

The costs of running the water and sewer treatment plants rise by about $850,000 for water and $975,000 for sewer. The budget book explains why. For the past two years, federal pandemic relief money (ARPA) paid part of the plant operating contracts. That money is gone, so the cost is back in the water and sewer funds, and the rates rose to cover it.

Up: fire overtime

The fire department's overtime budget rises from $100,000 to $500,000. Fire Chief Eric Smith told the committee May 20 the department was filling eight firefighter vacancies, that mandatory overtime was hurting morale and that past administrations had left jobs open on purpose to pay for overtime, which he said was not good practice.

Down: positions and services

The budget lists 1,132.26 full-time-equivalent positions, 5.85 fewer than last year. Several department heads described cuts at the review meetings:

• Health Department: down 8.2%. The public health nurse, funded at $89,000 last year, was cut to $17,000 in the first proposal, Health Director Dominique Hurley said. The council later moved $30,000 from its own budget to add hours back. Wastewater testing for disease and drugs, first paid for with ARPA money, is not funded.
• Community Development: down 5.1%. The department loses an administrative assistant and its grant manager, Director Alex Koppleman said.
• Police: Acting Chief Michael Williams said the department eliminated one position, put off buying new cruisers and cut matrons in the cell block. In May the force had 40 officers serving in 45 budgeted patrol positions, with five recruits in the academy.
• Inspectional Services: an administrative job was cut, and a request for another building inspector was not funded. Building Commissioner Rob Vicari said some state-required safety inspections are not being done for lack of staff.
• City Council: down 20.6%, after councilors removed $30,000 for an outside management audit.

Flat: snow

The snow and ice budget stays at $766,600, the same as last year. Last winter cost far more. City Auditor Kenny Costa told the Budget and Finance Committee July 23 that the snow and ice deficit was $6.3 million, with $233,000 in state aid so far. State rules let a city spread a snow deficit over future years. Council President Tony Gross said June 16 it would be spread over three years, which he said would mean about $2 million taken out of each of the next three budgets.

Search every line item

The budget book lists 674 spending lines across 51 departments and funds, many with notes explaining what the money is for. All of them are below. Search for a word such as "overtime," "electricity" or "fireworks," or open a department to see each line.

What it means for your household

Property taxes. This year's tax rate has not been set. Each fall the assessors finish property values and the council holds a tax classification hearing to decide how the bill is split between homes and businesses. Then the state approves the rate. The assessors briefed councilors on their options Aug. 27, and the assessor's memo on classification went to the Budget and Finance Committee Sept. 22. Until then, the most recent figures are last year's: a residential rate of $9.31 for every $1,000 of value, and an average single-family tax bill of $9,502, according to the state Division of Local Services.

Water and sewer. The council raised the water rate from $11.90 to $13.00 for every 1,000 gallons, an increase of 9.2%, and the sewer rate from $19.89 to $22.01, an increase of 10.7%. Both took effect July 1 and apply to water used since April 1, because the July meter reading covers the months before it.

Trash. $300 a year for standard service, $200 for the smaller cart, with half off for residents 65 and older, billed quarterly on the utility bill.

Use the calculator to see your own numbers. It uses last year's tax rate and shows how your tax payment lines up with the way the general fund is divided.

How it was decided

Before the mayor's budget was finished, city departments and the schools asked for about $160.8 million, according to the city's five-year forecast. That was $7.5 million more than expected revenue. The mayor's office cut about $3 million from city department requests, the budget book says, and closed the rest with one-time money and a smaller increase for schools than the School Committee wanted.

The council's three-member Budget and Finance Committee, chaired by Ward 1 Councilor Scott Memhard with Council President Tony Gross and at-large Councilor Patti-Ann Page, reviewed every department in four meetings in May and June. Other councilors joined as a "committee of the whole." Department heads presented their budgets and answered questions, line by line.

Two changes came out of those meetings, in a revised budget dated June 1:

• $300,000 more for schools, paid for by raising the expected trash fee revenue by $300,000. At-large Councilor Jason Grow first proposed treating trash like a self-supporting fund, with fees covering the cost of the new contract. Then-Chief Financial Officer Conor MacCorkle told the committee May 20 that raising an extra $1.3 million would take a fee of roughly $425 a year. The version adopted raised $300,000, which Grow said moved the expected cost from $5 a week to $5.76 a week.
• $30,000 moved from the City Council's own budget to the Health Department, to add hours for the public health nurse.

Not everyone agreed with the trash approach. Page said June 3 the fee increases would fall hardest on younger residents and Ward 2, that the public had no chance to weigh in on the new contract and that the contract should be paid for within the budget. Grow said that would mean the general fund paying the whole contract and cutting other services. Ward 3 Councilor Marjorie Grace said June 2 that the city needs revenue sources other than property taxes, and raising fees is one option.

The public hearing was June 9. It lasted two hours. Of the 41 people who spoke, two spoke in favor, including the mayor, and 39 spoke in opposition. Most asked the council to fully fund the schools. Speakers included students, teachers and School Committee members. Several raised the cost of the new trash program, and others suggested an override, taxes on seasonal homes, higher fines or higher beach sticker prices. Dozens more sent written comments.

The council voted June 16. Nearly every vote was unanimous. The exceptions:

Before the school vote, at-large Councilor Hannah Kimberley, a teacher, said she would vote yes but objected to cuts the School Committee had chosen, including a family engagement coordinator for multilingual learners, the cabinetry design and DECA programs and several teachers. She said she had received more than 100 emails about school cuts.

Voting for the budget gives us what we have at the level that we can afford.Councilor Hannah Kimberley, June 16 City Council meeting

Ward 2 Councilor Dylan Benson voted no on the schools, saying there should have been more funding. Gross noted that the council has no authority over how the School Committee spends its money.

Benson also asked whether the city's revenue estimates were too low, a point a resident raised at the hearing. MacCorkle said the city compared five years of budgeted and actual revenue and that the estimates were as aggressive as they should be. He said a shortfall could produce negative free cash and hurt the city's bond rating just as it prepares to borrow for the sewer treatment plant. S&P Global Ratings rates Gloucester AA with a stable outlook, according to a September 2025 letter in the budget book.

The years ahead

The budget book describes what comes next. It calls this budget "a responsible but constrained financial plan" and says the city's costs are growing faster than the revenue Proposition 2½ allows. The city's five-year forecast shows a gap of about $2.8 million in fiscal 2028, growing every year after.

Several pressures are not in that forecast:

• The sewer treatment plant. Under a 2023 consent decree with federal and state environmental regulators, the city must upgrade its wastewater plant on Essex Avenue to secondary treatment, with construction expected to finish in March 2028. The council authorized borrowing of about $206 million in July 2024, the largest project in city history. The budget book projects the debt payments starting in fiscal 2028 and peaking around $10.1 million a year in 2031. Unless the mayor and council choose to shift some of that debt onto property taxes, sewer users pay it. The tool below shows the three options the city laid out.
• The snow deficit, about $2 million a year for three years, according to Gross.
• Ending relief money. Memhard listed one-time sources the city has relied on that are ending: about $6.8 million in federal school relief, $23 million in ARPA money and this year's free cash and stabilization transfers. The budget also includes the final $220,000 wind turbine credit; after this year, the city expects that money to stop.
• Buildings and equipment. Departments asked for $58.5 million in capital projects, led by a new fire headquarters estimated at $40 million. The budget funds $993,298, mostly routine equipment. The rest stays on the city's list of needs.
• Reserves. The city's four stabilization funds hold about $17.8 million. The general stabilization fund, about $4.6 million, equals roughly 3% of general fund revenue. The city's Financial Policies set a target of about 5%. The water and sewer funds are projected to end the year with reserves below the policy's target of 2% to 7% of their budgets.

Councilors closed the June 16 meeting talking about these pressures. Grow said costs were outpacing revenue and that an override of Proposition 2½ may need to be considered. Gross said the treatment plant will put a large burden on residents, many of whom are already struggling with housing and food costs, and that the mayor's office planned to start work on next year's budget right away, in partnership with the schools.

How Gloucester compares

Budgets are hard to compare town to town, because each counts schools, water, sewer and trash differently. Tax bills are easier. Last year Gloucester's average single-family tax bill, $9,502, was above the state average of $8,113 but below several neighbors, including Essex, Manchester-by-the-Sea, Newburyport, Ipswich and Marblehead.

Gloucester's 5.3% general fund increase is higher than several neighbors reported. Some North Shore communities asked voters for more. Essex voters approved two overrides totaling about $454,000 on May 11. Marblehead voters approved a $15 million override and a separate $2.3 million override for trash on June 9. Manchester voters approved five debt exclusions May 19. Gloucester, Rockport, Beverly, Newburyport and Ipswich had no override for fiscal 2027, according to the state.

Trash shows how differently towns handle the same cost. Beverly raised its yearly fee from $100 to $300. Rockport, Essex and Manchester use pay-as-you-throw bags or stickers. Newburyport pays for a standard cart through taxes. Marblehead now covers trash through its new override.

How to take part

The budget is adopted, but the money keeps moving all year. The council votes on transfers, grants and extra spending at almost every meeting, and the next budget is already being planned. Here is how to follow it and be heard.

Update, Oct. 5: Added a box explaining why the school budget works differently under state law, with Gloucester's state required minimum school spending.