The FY27 Budget Is Here. Here Is What It Actually Means.
Mayor Beauregard’s proposed budget is balanced, honest, and painful. This is what residents need to know.
Written by: Dan Shibilia
Check out the fiscal breakdown here: https: FY27 Budget
The transmittal letter, the budget document, and the articles shared to the Council can be see here: Here
Mayor Beauregard submitted the city’s FY27 budget to the City Council early yesterday evening. His cover letter did not sugarcoat it. “The FY27 budget before you is balanced. It is also painful. I do not like it. Nobody should” he writes to the Council as he opens on a bleek but honest disclaimer for what was to come in the budget.
That framing is accurate. The total General Fund budget proposed is $225.8 million, up from $220.8 million approved in FY26. That top-line increase is real but misleading. The growth is almost entirely driven by costs the city cannot control: health insurance up nearly $2 million, pension contributions up $829,171, charter school tuition, solid waste disposal. Inside that total are cuts, eliminations, and deferrals that will be felt by residents in ways that a single summary number does not capture.
The Salary Reductions Are Furloughs
Throughout this budget, salary lines across nearly every department are reduced in the range of 4 to 5 percent. These are not pay cuts and they are not reclassifications. They are furloughs: mandatory unpaid days off that reduce what employees take home without eliminating their jobs.
A city employee earning $80,000 does not see their salary renegotiated. They are required to take a number of unpaid days across FY27. The budget reflects what the city will actually pay out. The employee keeps their position, their benefits, and their contractual standing.
Furloughs cannot be imposed unilaterally. City employees are represented by unions, and under Massachusetts labor law, the city is required to engage in impact bargaining before furloughs can take effect. That means formally notifying each union, sitting down to negotiate over how the furloughs are structured and what effects they have on wages and working conditions, and reaching an agreement. This is not a formality. The unions have real leverage, be assured… they will use it.
What the city brings to that bargaining table is a fiscal argument that is hard to dispute. The alternative to furloughs is layoffs. Furloughs spread the pain across the workforce and everyone keeps their job. Layoffs concentrate the pain and some people lose their jobs entirely. For a city facing a structural fiscal crisis that the Massachusetts Municipal Association has documented is affecting every gateway community in the state, that argument carries genuine weight. The unions know the numbers. Their members live in Methuen. The conversation in bargaining is not about whether there is a problem. It is about how the sacrifice gets distributed and whether the city’s proposed distribution is fair.
What the Council needs to watch closely is whether the furlough savings materialize as budgeted. If bargaining with any of the unions results in furlough terms that differ from the administration’s projection, the numbers in this budget change. The Mayor’s proposed budget assumes a certain level of savings from furloughs across the workforce. If those savings come in lower, something else has to give. The Council should ask the administration directly: what is the contingency plan if the furlough math does not land as projected?
One more thing worth calling out. Furloughs ask real people to earn less so that the city can stay solvent. City employees in Methuen are not abstractions in a budget document. They are neighbors, parents, and residents who are being asked to absorb sacrifice to keep services running. That deserves to be said out loud, not buried in percentage reductions. I don’t think is lost on the Mayor and his team at all.
With that context, here is what the Mayor proposed department by department.
The Schools
This is the central issue in the budget.
The School Committee requested $129.9 million. The Mayor proposed $113.98 million. The gap is $9.2 million. Chapter 70 school aid from the state is increasing 2.3 percent. The actual cost of maintaining current school services is rising roughly 11 percent. The city cannot close that gap on its own.
The problem is not just the number. It is what does not exist yet. The school department has not produced an accounting of what the Mayor’s figure actually means for the district. What positions go. What programs end. What class sizes become. The Council will be asked to vote on a budget with a $9.2 million school funding gap and no line-by-line picture of the impact. That accounting needs to exist before the vote happens as the budget that was approved is a few million over what the Mayor authorized and presented.
There is also a meaningful distinction between what furloughs do for city employees and what this budget likely means for school staff. A furloughed DPW worker keeps their job and takes a temporary pay reduction. School cuts of this magnitude almost certainly mean layoffs, not furloughs. Those are permanent losses, not temporary ones. The Council and the public deserve to know exactly which is which before this budget is adopted.
This plan of waiting for the State to save us is hopeful but dangerous.
Health Insurance and Pension
Two costs in this budget are mandatory, actuarially driven, and not negotiable in any meaningful short-term sense.
Employee health insurance rises to $19.45 million, up nearly $2 million from last year. The Mayor is actively exploring whether Methuen can join the Group Insurance Commission, the state’s employee health insurance program, which could produce significant long-term savings. That process requires union bargaining and takes time. It is the right conversation to be having. It does not help FY27. It’s also worth noting that this line has routinely been overrun and is likely to happen again. It’s uncapped and uncontrolled.
The pension contribution rises to $17.26 million, up $829,171. This is set by an independent actuary based on the city’s pension liability. It is legally mandated. It cannot be reduced.
Together those two lines account for over $38 million in the budget and grew by nearly $2.9 million from last year alone. That growth happens regardless of anything else the city does.
Public Safety
Frontline patrol staffing is preserved. All 77 patrolmen, 15 sergeants, 6 lieutenants, 2 captains, and the Chief remain in place. The same is true for fire: 81 firefighters, 21 lieutenants, 4 deputies, 3 captains, assistant chief, and chief, all intact.
What changes is the operational structure around them. Police overtime is cut from $311,420 to $150,000, a 51 percent reduction. The cadet program is eliminated entirely. On the fire side, overtime drops $300,000 (about 50%) from what the department requested. Both departments lose positions at the administrative level.
The overtime cuts are the numbers to watch. If either department exceeds its budget mid-year, and it has happened before, the city is back before the Council with a supplemental appropriation request. The Council should pressure-test both figures with the department heads before voting.
Public Works
The Department of Public Works goes from 76.5 to 64 employees, an 18 percent reduction in headcount. Overtime is cut in half. Road repair materials are cut. Building maintenance is cut. This department runs the roads, the parks, the buildings, and the infrastructure that residents interact with every day. A reduction of this scale will be visible. I understand why the mayor did this but the Council should be honest with residents about that rather than absorbing it quietly into a budget document.
Elder Services and Veterans
Both departments are already at the bare bones. Elder Services takes a $6,111 reduction. Veterans takes $16,882. Veterans benefits payments of $275,000 are preserved. There is nothing left to cut in either department without directly harming the people they exist to serve.
Library
Level-funded at $1,929,340, the same as last year. The department requested $67,000 more and was denied. The Library runs heavily on its own Trust. The city’s contribution is a baseline, not a full operating budget.
Economic and Community Development
Worth flagging separately from the administrative cuts. The Assistant Director of ECD takes a 52 percent reduction, from $73,036 to $46,444. The Economic Development Coordinator drops similarly. These are not furloughs. Furloughs do not produce 52 percent reductions. Overtime is eliminated. Professional services cut in half. The Mayor’s own transmittal letter identifies growing Methuen’s commercial tax base as a central long-term strategy. Cutting the people responsible for that work by half is a tension the Council should name directly.
Legal
Retains full staff with furlough reductions across salary lines. One line warrants a question: the general Expenses line doubles from $8,000 to $16,000 with no explanation. That running rate has been consistent for years. The Council should ask what changed before accepting it.
Human Resources
Five FTE retained. The line that needs attention is the HR Administrator, Diversity, and ADA position, which goes from $96,804 to $15,000 while remaining listed as 1 FTE. That is not a furlough. Upon investigation, those duties are being divided and compenstated by stipend. Methuen has not historically been strong on ADA compliance. Gutting the role responsible for it would create legal exposure. The Council should ask what the plan is to verify.
Health, Human Services and Inspections
One of the few departments that actually grows, adding a second Community Outreach Coordinator. Grants cover $368,829 in salary costs in this department. One line needs an explanation before the vote: Professional Services jumps from $2,500 to $26,500. That is a tenfold increase that demands explanation.
City Clerk
Staffing unchanged with furlough reductions. The budget increases overall because Election Services doubles from $60,000 to $120,000. I am sure the City Clerk will make her case but it’s worth noting that this is to cover a primary and a general election this year. In addition, we need to cover printing costs for state ballots… another lovely unfunded mandate gifted down from the State.
What the Council Needs Before It Votes
A few things are missing that should exist before this budget is adopted.
A school impact statement. The school administration should be required to present a specific accounting of what the $9.2 million gap means in practice before the Council votes.
A furlough contingency. If union bargaining on any of the furlough agreements produces different terms than projected, the budget math changes. The Council should ask the administration what the plan is if the furlough savings do not land as written.
A debt schedule. The debt service line carries $2.15 million in general interest. The Council should have a full accounting of what bonds remain outstanding, at what rates, and when they mature. This is standard practice and should be presented as a matter of course.
This budget was not written to make anyone happy. It was written to keep the city functional in circumstances that would break a less careful approach. The Mayor chose not to ask residents for a tax override. He chose not to drain free cash reserves. He chose to absorb the pain inside city government first. Despite my disagreement and belief that an override should have been at least presented to the residents for a vote, his instincts are right even when the results are hard to look at.
The Council’s job now is to fill in the gaps, ask the questions that are not yet answered, and make sure that when it votes, it knows what it is voting for.
Sources: FY27 Budget, Expenses General Fund Proposed (City of Methuen); FY27 City Council Transmittal Letter, Mayor David P. Beauregard Jr., May 15, 2026; “A Perfect Storm: Cities and Towns Face Historic Fiscal Pressures,” Massachusetts Municipal Association, October 2025.