Marshfield faces multimillion-dollar budget gap

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Marshfield officials warned residents last week that the town is heading toward a significant financial shortfall in fiscal year 2027, as rising costs continue to outpace sustainable revenue growth.

During a Select Board meeting last week, Interim Town Administrator Charlie Sumner outlined a five-year financial forecast showing a widening gap between projected revenues and expenditures, driven in part by rising education costs, healthcare costs, and pension growth, and by the exhaustion of one-time funding sources.

“We do not feel that what you are doing in the current fiscal year is sustainable next year,” Sumner said. “You really were using too many one-time revenues to subsidize your budget over the last few years.”

Property taxes remain the town’s largest revenue source, generating nearly $78 million annually. Under Proposition 2½, that revenue can grow by only 2.5 percent per year, yielding roughly $2 million in new funds. While Marshfield has benefited from higher-than-average new growth tied to recent development, Sumner said that growth alone cannot keep pace with mounting obligations.

Currently state aid is level-funded for planning purposes at about $19.8 million, though modest increases may follow. Sumner said the forecast numbers will be updated once the state budget is released.

Officials also reduced projected local receipts after finding prior estimates were overly optimistic.

“We’re concerned with collections in the current fiscal year,” Sumner said, noting the town cut its local revenue assumptions by five percent to avoid midyear budget shortfalls.

On the expense side, one of the largest drivers is Marshfield’s participation in South Shore Regional Vocational Technical High School. Enrollment growth alone is projected to add $643,000 in FY2027.

“When you voted to join the voc tech, you didn’t get any more spending capacity,” Sumner said. “You have to pay for that within your existing levy limit.”

In 2022, Marshfield voters approved joining the South Shore Regional Vocational Technical High School district, expanding local access to vocational education. Since then, town officials have said membership has created ongoing financial challenges as enrollment has grown and associated costs have increased.

Voters later rejected a proposed debt-exclusion override to fund construction of the new vocational high school, though the project proceeded after receiving approval from other member communities. The town also faced added budget pressure in FY2026 after vocational tuition costs were not fully incorporated into earlier budget calculations.

Healthcare and pension costs are also expected to rise sharply. LaMay said the forecast assumes 10 percent annual increases for both.

“All indications are, from every purchasing group that is looking at this [right now] is that healthcare costs are out of control,” Sumner said.

The result is a projected gap of roughly $2.46 million for FY2027 before any new labor agreements are settled. With modest departmental growth factored in, the deficit could exceed $4.5 million.

Select Board Chair Eric Kelley called the numbers sobering.

“Throw everything up there and see what we can do,” Kelley said, signaling that difficult discussions lie ahead.

Town officials said the forecast will be updated regularly as new information becomes available, with the goal of giving residents and boards time to understand the challenges and weigh potential solutions.

The budget outlook was presented during a turbulent period for town leadership. Marshfield remains without a permanent town administrator, roughly eight months after the position became vacant, and is now on its second interim appointment. Earlier this year, the Select Board chair also faced a recall effort that was ultimately unsuccessful.