The city of Peabody still fares pretty well when the state of its finances is compared to other communities.

The average single-family tax bill is $3,156, according to the latest figures compiled by the Massachusetts Taxpayers Foundation. That's one of the lowest on the North Shore and well below the statewide average of $4,232.

Many communities are taxing residents right up to the maximum amount allowed under Proposition 21/2. Yet Peabody remains comfortably below that limit. Its "excess capacity" - the amount of additional money it could raise under Proposition 21/2 as a percentage of total property taxes - was 6.64 percent this year as compared to a statewide average of 1.9 percent. (Beverly's excess capacity, on the other hand, was 0.05 percent; and Salem's, a measly 0.01 percent.)

But lest anyone in the Tanner City feel too relaxed, in fiscal 2001 Peabody's excess capacity stood at 21.5 percent. The following year, it was 15.3 percent. Last year, it was 7.5 percent. Do you detect a trend there?

While other communities have been working hard to get labor costs under control, those who work for the city of Peabody have no greater champions than the City Council and School Committee. While recent contract settlements in Beverly and Salem have required city employees to pay a greater share of their health insurance, those in Peabody - including city councilors - can still buy the Cadillac of plans and have the city pick up 90 percent of the cost.

As a result, it appears only a matter of time before that cushion of cash in Peabody is completely deflated and officials there will face the same stark choices as their colleagues in other communities.