Every fight over City Hall, trash fees, or teaching jobs sits on top of the same problem. The clearest way to see it is to picture the whole city as one household, so that's the thread running through this page, in a short box at each step. Real Beverly numbers, plain language, no finance background needed.
Meet the cast once, and the rest of the page reads easily.
Most of the city's income comes from property taxes, and the cap lets that income grow only about 2.5% a year, plus a little from new construction. The city's costs don't stop at 2.5%. Salaries, health insurance, retirement, and special education climb faster, roughly 4% to 9% a year. So the bills pull ahead of the income, a little more every year.
Your boss can give you a 2.5% raise. But rent, groceries, and insurance went up 6%. You're not overspending. The math just stops adding up, and it slips a little further each year.
Picture two lines. The top one is what the city has to spend. The bottom one is what it's allowed to collect. They start together and pull apart, like a pair of scissors opening. The space between them is the shortfall, and it grows on its own before anyone makes a single decision.
The exact dollar figures matter less than the shape: the spending line pulls away from the income line, and the gap widens every year. Both lines start equal in 2025 because the city is required by law to pass a balanced budget.
Source: City of Beverly, Financial Forecast 2025–29 (December 2024).
The cap (Proposition 2½) lets the property-tax take grow about 2.5% a year, plus revenue from new construction. On the cost side, the city's forecasts show the fastest-growing items are health insurance, pension contributions, salaries set by union contracts, special education, and the assessment Beverly pays to the regional vocational high school. Several of those routinely rise faster than the 2.5% cap, which is what opens the gap.
The chart combines the city side and the school side of the budget. By 2029, spending is projected near $198.6M against about $188.4M coming in, a gap of roughly $10M.
This was not sprung on anyone. The city's forecasters flagged this year's shortfall back in 2022, and again in 2024. Both times they were close. And it isn't a one-time dip: left alone, the yearly gap grows from about $3.9 million to more than $10 million within four years.
You ran the numbers two years ago and saw this tight year coming. You were right. And next year looks tighter, and the one after that tighter still, unless something changes.
How big the yearly shortfall would get if the city did nothing. It can't actually do nothing, since it has to balance the budget by law, so read this as a warning light, not a prediction. Each year it has to close that year's gap somehow.
Source: City of Beverly, Financial Forecast 2025–29 (December 2024).
The city's Financial Forecast Committee projected the 2026 shortfall at about $3.1 million in its December 2022 report, and about $3.9 million in its December 2024 report. The 2024 report also projected the gap widening in the years after, to roughly $6.3M, $7.6M, and $10.2M, if nothing changed. The most recent report describes this stretch as more severe than anything the city has faced in decades, because the one-time fixes it used before are now gone (see the next section).
Beverly has run shortfalls on paper for a long time, and it kept closing them with one-time money. A big slug of federal pandemic aid. Road repairs shifted out of the day-to-day budget. Unused tax room. Equipment it chose not to buy. Each worked exactly once. Now they're spent, and what's left are the hard tools: raise fees, or cut services.
One year you sold the old car; another you skipped vacation and raided the holiday jar. Those got you through, but you can't sell the same car twice. Eventually you're down to the hard choices: a side job, or cutting things you'd rather keep.
The problem was never any single one of these moves. It's that none of them come back the next year. In budget language, these are "one-time" sources, as opposed to steady, recurring money.
The shortfall is mostly outside the city's control. But how it copes is a set of standing choices, and each one helps in one way and costs in another. None is free. Here are the four big ones in plain terms, with the upside and the downside of each. Reasonable neighbors land in different places on all of them.
Every money decision a household makes is a trade-off: pay down the debt or take the trip, save more or spend now. There's rarely a free option, only different costs landing on different people. The city's choices work the same way.
Plan high, or plan low?
Guesses low on purpose. Money that comes in above the guess becomes savings.
Guess the income honestly, leaving more room to fund services now.
UpsideBuilds savings and keeps the city's borrowing cheap. It also guards against guessing too high and running out of money partway through the year, which would force cuts mid-year, in the middle of a school year.
DownsideIt makes the shortfall look bigger on paper every year, and that bigger number is what gets used to justify cuts.
A big rainy-day jar, or a small one?
Keeps a large cushion, near 19% of its budget, roughly two and a half months of spending.
Hold a smaller cushion, closer to what comparable towns keep, and spend the difference on services.
UpsideA big cushion rides out a bad year and keeps borrowing cheap.
DownsideMoney in the jar isn't paying for services today. And drain it to cover everyday bills, and it's gone, with the same gap waiting next year. (How Beverly's cushion compares to other towns is in the appendix.)
Borrow, pay cash, or wait?
Borrows for big projects like the City Hall renovation,↗ repaid slowly over many years.
Pay cash (which drains the savings jar), or delay the project, though a building left to decay only costs more to fix later.
UpsideSpreads the cost over the decades people use the building, instead of draining today's savings.
DownsideThe city owes the loan payments for years. And the key point: that borrowed money legally can't be turned into salaries. It's a separate pot, like a mortgage you can't spend on groceries.
Fees, a tax vote, or cuts?
Raises flat fees like the trash bill and cuts services,↗ to avoid asking voters for higher taxes.
Ask voters to approve a permanent tax increase (an override), or pursue payments from large tax-exempt institutions.
UpsideA fee is easier than a town-wide vote and avoids raising everyone's taxes.
DownsideA flat fee costs a struggling household the same as a wealthy one, and it doesn't keep up with rising costs, so the gap returns next year. An override could fix it lastingly, but it raises everyone's taxes and the vote can fail.
Think the money's just sitting there? Try finding it yourself.
The pressure is real, it's getting worse, and the easy money is gone.
That's why the loudest fight, "they're renovating City Hall while cutting teachers," misses the mark. Those are two separate pots. The building money is borrowed and repaid over decades; by law it can't become next year's salaries, and spending borrowed money on everyday bills would only blow a bigger hole later.
The disagreements worth having are these:
Those are real, fair disagreements about risk, fairness, and priorities, and they're worth arguing loudly. Blaming each other over two unrelated bills just runs out the clock while the gap keeps widening.
Beverly is a town worth caring about, and this is a real problem. We're already feeling it: a trash bill leaping from $100 toward $300 or more, jobs cut across city departments, even police and fire posts left unfilled. Those costs land on real households right now.
But most of the public energy goes to the symptoms, the size of the trash fee and the look of the City Hall project, and to deciding who to blame. The slow squeeze underneath, the one from the first few sections, barely comes up. Some people are digging into the real causes, on the City Council and in letters from residents, but it's scattered, and a few arrive already certain of one fix before the rest of us have the full picture. This page is here to hand everyone the same map.
Where it's playing out, if you want to follow it or speak up:
A common charge is that Beverly hoards money while pleading poverty. So let's check it.
The question is just: is this family's rainy-day jar bigger than the neighbors'? The fair way to compare is to measure each household's savings against its own spending, not in raw dollars.
Here's Beverly's savings cushion next to nearby and similar-sized towns, measured as a share of each town's yearly budget.
Middle of the pack ≈ 17%. Beverly: 19.2%.
Savings as a share of the yearly budget, 2025. Beverly is on the higher side, but it lands squarely in the middle of the pack, 6th of 11. Not lean, not a hoarder. One catch: most of Beverly's savings sits in a fund that takes a two-thirds council vote to spend, rather than money it can reach easily.
Source: Massachusetts Division of Local Services, Municipal Finance Trend Dashboard, 2025 figures.
Savings combines the city's leftover money at year-end (free cash) and its formal rainy-day fund (the stabilization fund), divided by its general-fund operating budget. All eleven towns are measured the same way, using the state's certified 2025 figures, so it's a fair comparison.
There's no single official "correct" level to keep. Rating agencies and the Government Finance Officers Association generally suggest holding at least about two months of spending, which is roughly 17%. Statewide, reserves have run unusually high since the pandemic.