Duxbury Faces Tough Budget Choices as Costs Outpace Revenue

Officials discuss need for two budget scenarios, warn of potential service cuts

DUXBURY, MA - August 26 - Duxbury officials are grappling with tough financial choices as they prepare for the fiscal year 2026 budget, with costs outpacing revenue growth in the predominantly residential community.

At a recent Selectboard meeting, Finance Director Mary MacKinnon presented findings from the Sustainable Budget Task Force, which has met 16 times since April to analyze town finances.

"We are here, and we have reached that intersection where our sustainable revenues no longer support our operating costs," MacKinnon told the board.

The task force is recommending that department heads prepare two budget scenarios for FY26: a level-funded budget plus 2.5% increase, and a department-requested budget reflecting actual needs.

MacKinnon explained that the level-funded option "will result in reductions across our organization," while the department-requested budgets may include staffing or operational expense increases to maintain service levels.

Duxbury's financial challenges stem largely from its 97% residential tax base, which limits revenue growth. The town has long prioritized maintaining a small, rural character with limited commercial development.

Population growth is increasing demand for services across departments. Meanwhile, inflationary pressures are driving up wages and vendor costs.

School costs are also rising, with the town's minimum required contribution growing 8.8% since 2019 despite a 9% enrollment decline.

The town's median income increased 14% to $148,505 in fiscal 2022, potentially limiting state aid increases. Fixed costs like health insurance and pensions are growing at 3.55% annually, outpacing revenue growth under the state's Proposition 2 1/2 tax levy increases.

Some departments are chronically underfunded, particularly facilities. "The funding level that we have appropriated for that department is negligible compared to the minimum required amounts that they have to spend on our maintenance contracts year over year," MacKinnon said.

New regulations and unfunded mandates are also straining department budgets. Police face reform requirements, while public works must comply with new environmental and safety regulations.

Debt service capacity within the tax levy is declining, limiting the town's ability to fund capital investments and infrastructure maintenance.

Selectboard members debated the merits of preparing two budget scenarios versus just one level-funded option. Some argued a single scenario would provide more clarity on potential cuts.

"I think the townspeople need to know the cost of their choices," said board member Amy MacNab.

Ultimately, the board voted to endorse the two-scenario approach recommended by the task force. Department heads will prepare budgets by early October, with the Selectboard receiving a high-level update shortly after.

The budgets will then go through review by the Finance Committee and other bodies before being presented at Town Meeting next year.

Officials emphasized that even the level-funded plus 2.5% scenario will likely require service reductions. The process aims to clearly illustrate for voters the financial challenges facing the town and the potential impacts of budget constraints.

"If we want to continue being us, we got to pay for it," said Finance Committee Chair Betsy Sullivan. "We have to now find out what that's going to cost."