~5 min read
Proposition 2½ caps how fast Marblehead's tax revenue can grow. It does not cap how fast anything else grows. Not health insurance, not teacher salaries, not the price of fuel. Three views of what that gap looks like.
Each bar is one cost, with its annual growth rate. The dashed vertical line marks the rate Marblehead's revenue actually grew at (the 2.5% cap plus new growth from new construction). Bars past that line grew faster than the levy could keep up with.
Compound annual growth rate (CAGR) over each line's data window. Cap is the statutory ceiling on levy growth. Levy is FY15–FY27 from DOR Tax Recap. Teacher salary is FY15–FY24 from DESE School and District Profiles, Marblehead district 01680000. Family health premium is FY15–FY24 actual plus FY25–FY27 extrapolated at the FY15–FY24 trend (4.3%/yr), from KFF Employer Health Benefits Survey national family premium.
Why teacher salary as the wage line: Marblehead's payroll has two halves with separate contracts. School employees (teachers, paraprofessionals, school administration) are negotiated by the School Committee. Town employees (police, fire, DPW, library, town hall) are negotiated by the Town Administrator and Select Board, each with their own union. Teacher salary is shown because DESE publishes it annually with multi-year transparency for every district; the other municipal contracts are public but not aggregated into a single time series. Aggregate state-and-local government employee compensation nationally tracked similar rates over the same window per the BLS Employment Cost Index.
Indexed growth rates are abstract. Same data, in dollars, FY15 vs the most recent audited year:
| Cost | FY15 | FY24 actual | If 2½% cap had been the only growth |
|---|---|---|---|
| Avg teacher salary (DESE) | $67,142 | $90,696 (+35%) | $83,824 (+25%) |
| Family health plan (KFF national) | $17,545 | $25,572 (+46%) | $21,898 (+25%) |
| Marblehead total levy (DOR) | $54.10M | $71.42M (+32%) | $67.55M (+25%) |
| The rightmost column shows what each value would have been if it grew exactly 2.5% per year for nine years. The gap between that number and the FY24 actual is what the town and households actually paid above the cap. Marblehead's avg single-family tax bill rose faster than the total levy (from $7,669 to $10,778, +41%) because residential property values appreciated faster than commercial during this window, shifting more of the levy onto homeowners. | |||
The bar chart compresses each line to a single number. The full picture, indexed to FY15 = 100:
Each line indexed so FY15 = 100; an indexed value of 143 means "43% above FY15." Solid lines are audited or directly published values; dotted segments past FY24 are trend extrapolations at each line's FY15–FY24 compound annual growth rate (cap at 2.5%/yr and levy at the cap plus expected new growth; teacher salary at 3.4%/yr; family health premium at 4.3%/yr).
The cap is fixed at 2.5% by state law. The costs are not. When costs grow faster than the cap allows, the difference has to come from somewhere. The family health premium has grown faster than the cap every year of this window.
For nine years, Marblehead made up the difference with state aid, fees, and free cash. The 2026 Finance Committee Annual Report reported the FY26 budget was balanced only through one-time adjustments and that the three-year forecast had identified projected deficits for FY26, FY27, and FY28. The FY27 budget shows an $8.47M structural deficit at current service levels.
The override question on the June 2026 ballot is whether to raise the cap. The data does not say which way to vote. It says what the cap has and has not been able to keep up with.
FY15 was chosen as the index baseline because it is the earliest year with audited or directly published data for all four series (the statutory cap, the DOR levy limit, the DESE teacher salary, and the KFF national family premium). FY24 is the last year with audited data for all four. An indexed value of 143 means "43% above FY15."
Each line is extrapolated past FY24 at its own FY15–FY24 compound annual growth rate (CAGR), shown as dotted line segments past the audited/estimated boundary. This is "trend continues" extrapolation, not a forecast tied to any specific budget cycle:
Each FY15 value compounded forward at exactly 2.5% per year for nine years, ignoring new construction. Per Massachusetts General Laws c. 59 § 21C, the levy itself is allowed to grow 2.5% plus the value of new construction. The counterfactual column shows the pure 2.5% rule alone, so the gap to the FY24 actual is the cumulative effect of new growth (for the levy line) or of cost growth above the cap (for teacher salary, health premium, and the avg single-family tax bill).
Teacher salary is the largest single wage component but not the only one. School employees (teachers, paraprofessionals, school administration) are negotiated by the School Committee. Town employees (police, fire, DPW, library, town hall) are negotiated by the Town Administrator and Select Board, each with their own union. DESE publishes teacher salary annually with multi-year transparency for every district; the other municipal contracts are public but not aggregated into a single time series. Aggregate state-and-local government employee compensation nationally has tracked similar rates over the same window per the BLS Employment Cost Index.
The KFF Employer Health Benefits Annual Survey national family premium is used as a conservative reference. Marblehead's specific Group Insurance Commission (GIC) family premium has run above the national KFF average over the FY19–FY26 window for which both are available, so the national line is conservative for Marblehead specifically. GIC-specific FY06–FY27 data is on the site's healthcare costs page.
The avg single-family tax bill ($7,669 in FY15, $10,778 in FY24, +41%) grew faster than the total levy (+32%) because residential property values appreciated faster than commercial during the window, shifting more of the levy onto homeowners. That is a separate phenomenon from cost growth versus the cap and is included in the table only to give voters a recognizable dollar figure.
More: What is the override? · How did we get here? · Why health insurance is outpacing the tax levy · Where has the money gone?