Danvers officials are grappling with significant budget pressures as they prepare for the FY 2026 budget, highlighted by a 10.91% increase in health insurance renewal rates and rising retirement contributions. During a recent Finance Committee meeting, it was revealed that the town's budgetary challenges are exacerbated by costs that outpace the limits set by Proposition 2.5, which restricts property tax increases.

The town's health insurance costs alone are projected to add $1.45 million to the budget, a burden felt across both public and private sectors. Additionally, Danvers Public Schools are seeking a 3.8% budget increase, translating to nearly $2 million more than the previous year. These increases, combined with a slight decrease in enrollment at Essex Tech, are expected to exceed the town's projected new tax revenue of approximately $3 million.

To address these financial hurdles, town officials have proposed cuts to various departments and have optimized local receipts to align closer to actual revenue. Notably, Danvers has reported a historic free cash figure of $13.87 million, which will be utilized for one-time expenses and to bolster reserves. This figure is significantly above the recommended 3-5% of net general fund revenue, allowing for strategic investments in infrastructure and public services.

The budget also prioritizes public safety, with plans to fully fund the police department, including the addition of a new officer—the first since 2008. The fire department's funding has also been adjusted to absorb costs from a recently concluded SAFER grant.

Despite these challenges, Danvers remains committed to maintaining quality services while navigating the financial landscape. The town's leadership is optimistic about balancing the budget without compromising essential services, as they prepare for further discussions in the coming weeks.