Swampscott has about $576,000 in deficits that must be funded in fiscal 2027. If the town does not use free cash at Town Meeting this fall, the money will be added by law to fiscal 2027 property tax bills.
Finance Director Patrick Luddy told the Select Board on Aug. 27 that the town closed fiscal 2026 with revenue about $589,000 over estimate and spending about $461,000 under budget, a year he called “modestly favorable.” But two deficits remained on the town’s June 30 balance sheet: roughly $371,000 in the overlay account and roughly $204,000 in COVID-era spending that the federal government later ruled the town could not keep.
Neither deficit can be cleared by shifting money at year-end. The town can appropriate free cash, money already certified as available, at its next Town Meeting, expected this fall. If it does not, the money goes on the fiscal 2027 tax levy.
The board took no vote. Luddy said the town sends its balance sheet to the Department of Revenue in September, expects free cash certified back around the end of October, and files its Schedule A in November. That makes fall Town Meeting the key point for a decision.
Overlay deficit would hit the tax levy
Overlay is money the town adds to its tax levy each year to cover abatements, the refunds owed when a property turns out to be over-valued, and statutory exemptions for veterans, seniors and others. The town builds in a cushion “so we don’t have a hole in our revenue,” Luddy told the board.
When that cushion runs short, the shortfall reduces the town’s certified free cash by the same amount. Here, that amount is $371,000. The balance then has to be raised on the next levy unless the town funds it another way.
Under Massachusetts General Laws Chapter 59, Section 23, assessors must annually raise “all abatements granted … in excess of the overlay and not otherwise provided for.” An unfunded overlay deficit is added to next year’s tax bills.
Wayne Spritz asked why the town could not handle the deficit in the year-end “shuffle,” the routine reshuffling of appropriations. Luddy said the answer is that overlay is a balance-sheet item, not a budget item. Clearing it takes a Town Meeting vote, not a transfer.
Two bad bills drove $210,000 of the overlay gap
About $210,000 of the overlay deficit came from two parcels that had already been redeveloped and should have been inactive on the tax roll. During a migration or upgrade of the software the assessing office uses to maintain its records, the two properties came back onto the roll and were billed for fiscal 2026 before anyone caught the error.
The error surfaced around March, after tax bills had gone out. The office corrected it “in conjunction with Patriot Properties,” the town’s assessing-data vendor. Asked whether the fault lay with the vendor or in-house, Luddy said only that he believed it happened during the software upgrade.
Zeroing out the erroneous assessments pushed the roughly $210,000 into overlay. It did not change the total the town collects. The levy “pie,” as Luddy put it, stayed the same size, but the reversal had to be absorbed through overlay.
Vice Chair Danielle Leonard summed it up: “So it’s a clerical error pretty much.”
The rest of the overlay deficit came from growth in exemptions the town cannot cap after the fact. Veterans exemptions rose by about $80,000, Luddy’s figure, in the first full year of the 2025 Heroes Act, which raised both who qualifies and how much they receive. Elderly exemptions rose from $5,000 to $30,000. Blind exemptions rose from $5,000 to $9,000. The senior tax-work-off program rose from $82,000 to $91,000. Over-valuation abatements climbed from $167,000 to $239,000, with roughly $60,000 from a single large abatement on Elm Place.
The town had already budgeted $300,000 for overlay in fiscal 2027, up $50,000 in anticipation of the Heroes Act. The actual costs exceeded it.
A member asked whether the town should cap that exposure. Connors pushed back: a senior work-off exemption reduces what the town collects but is not spending competing in the budget, and the program buys real labor. The board leaned against a cap but decided nothing.
CARES Act deficit has been on the books since 2023
The second deficit, roughly $204,000, is disallowed pandemic spending, chiefly the town’s COVID testing clinics in fiscal 2021 and 2022. Luddy said the spending fell out of compliance as the rules governing CARES Act and FEMA reimbursement shifted and the town could no longer claim it from both.
About 140 Massachusetts communities carry similar deficits. The Department of Revenue let towns carry them through fiscal 2026 without hitting free cash. Fiscal 2027 is when they come due. A caption-based record of the meeting put this figure at about $24,000; the professional transcript is clear it is roughly $204,000.
Board members focused on why the deficit had not come before them sooner. The deficit has sat on the balance sheet since 2023.
“So someone in your position knew about this since 2023 and this is the first time that we’re hearing about it,” a member said. “Is that safe to say?”
Luddy, who became Finance Director only in January 2026 and inherited the item rather than created it, did not fully concede the point.
“I can’t say for certain that it wasn’t spoken about previously,” he said, over “the past four years.” But he said “it was important for me to bring it to you … it needs to be addressed.”
Another member noted it had never surfaced in the town’s finance committee either. A third defended the earlier finance staff, saying the town had worked closely with the state and that its spending had been within the rules at the time.
The board’s rough sense was to pay it, not spend legal money chasing federal rule changes that Swampscott did not write. That was discussion, not a decision.
Assessing office remains thin
The overlay problem also put new attention on the assessing office. The town’s assessor is part-time. A full-time posting is out but has drawn few qualified applicants amid a North Shore-wide shortage. Connors told the board he has talked with other towns about sharing an assessor, citing the chief assessor that Reading, Wakefield and Lynnfield share.
The Director of Assessment, Jean Paul Plouffe, hired in September 2024, works a five-year cycle through town, revaluing neighborhood by neighborhood from field cards. Connors called the overlay error “a mistake that shouldn’t be happening.”
It is the office’s second problem this summer. In coverage last month, this paper described how a new Ingalls Terrace homeowner lost every deadline to challenge a project next door because his hearing notice went out under the prior owner’s name, a failure that ran through the assessor’s ownership roll. No official confirmed on the record that a mapping-data failure caused that notice gap, and the state’s January 1 assessment-date rule independently explains it. The two episodes are not one proven defect, but both involve a small assessing office trying to keep records current.
Board left main questions open
The board did not choose free cash or the levy. It did not cap the exemptions or the senior work-off program. It did not settle whether to fill the assessor job full-time or regionalize it. It took no accountability step on the COVID deficit beyond hearing it named. It also tabled the Kleinfelder stormwater report.
Sources: Select Board meeting, Aug. 27, 2026, Senior Center (video hc-uJwpF9_s; professional transcript and analysis data/analysis_markdown_prof/hc-uJwpF9_s.md; full-meeting upload 8t_c8N5wCDA). Agenda: data/committees/select-board/agenda-2026-08-27.md. Statute: G.L. c. 59 §23 (data/legal/source/mgl-c59-s23-2026-08-29.txt). Roles and history: data/people/patrick-luddy.md, data/people/nick-connors.md, data/people/danielle-leonard.md, data/people/mary-ellen-fletcher.md; Board of Assessors roster (data/committees/board-of-assessors/_committee.md) for the Director of Assessment’s name and hire date. External press: Swampscott Tides, “Swampscott Select Board Discusses $576K Deficit, Need for Full-Time Assessor” (Aug. 28, 2026). Prior coverage this piece sits inside: data/news/2026-08-19_notice-gap-gis-assessor.md, data/news/2026-08-26_sb-meeting-back-on-aug-27.md, data/news/2026-08-20_network-disruption.md. Attribution note: the meeting’s diarization rotates speaker tags; the “since 2023 … first time we’re hearing about it” question and the defense of prior finance staff are attributed here to unnamed members rather than to a specific board member. The $575,716 total and the exact split between the two accounts are the reported figures; Luddy’s spoken numbers were the round ~$371,000 and ~$204,000.