FY27 Budget Balancing Act

FY27 Budget Balancing Act

By Jon Anderson, Town Council

On April 1, the Town Manager and School Superintendent submitted their FY2027 budget request to the Town Council. Earlier this year, the Council set a goal of working toward a 0% mil rate increase to show restraint ahead of the upcoming school bond in FY2028. The initial request proposes a 5.97% mil rate increase, which would raise the rate from $11.33 to $12.01 per $1,000 of assessed home value.

Overall, both the Town and School budgets include relatively modest new investments. Because they are service‑based organizations, most costs are tied to people—about 81% of the school budget and 65% of the Town budget are personnel‑related. The primary drivers of the increase are contractual salary adjustments with union based employees, rising healthcare costs, and last year’s public safety staffing investments to keep you safer. We’re also facing lower‑than‑expected state school funding, slower growth in new tax revenue, and higher county taxes. Together, these pressures result in a budget request provided that largely maintains current service levels.

Considering these realities, I believe it’s realistic to move closer to a 2% mil rate increase by the end of the process. The Finance Committee has set this as a new target, which would require about $3.65 million in adjustments, while still investing heavily in Town and School services. This may mean small reductions in services or deferrals in investments, but the goal is to keep Scarborough affordable and prepare for the larger tax impact expected when the school construction project goes to bond and we lose state aid due to changes in the school funding formula in the coming years. Much like planning ahead for a major expense at home, this is about being thoughtful now to reduce future strain.

I’m optimistic that we can reach this target without major service reductions, though some careful choices may be necessary. Our town‑wide survey shows that Scarborough delivers an exceptional level of service compared to peer communities across New England. That’s something I’m incredibly proud of and a big reason I love living here. At the same time, that strength gives us some flexibility—there may be opportunities to do a bit less in certain areas while still providing a high‑quality experience for our residents.

As the Finance Committee digs in, here are some strategies I’d like us to explore that can keep service quality high, while also keeping affordability top of mind:

• Holding budgets flat for areas that are coming in under forecast this year
• Filling new positions within existing headcount by delaying or prioritizing hires
• Optimizing TIF revenues where eligible in the operating budget
• Deferring equipment replacement or maintenance where feasible to reduce debt service costs
• Using a greater portion of the School’s fund balance (while protecting our credit strength)
• Reviewing class sizes and staffing through normal attrition where enrollment is flat or declining
• Taking a closer look at estimates—both expenses and revenues—to improve accuracy
• Encouraging new, creative ways to deliver the same outcomes at lower cost

This budget reflects our community’s values, and it also requires us to plan ahead. I’m grateful for the community’s support of the school referendum, and honoring that support means making fiscally responsible choices today to prepare for the known impacts ahead.

This won’t be easy—and we need your input. Please join us at the Public Hearing on April 15, attend Conversations with Councilors in May, or share your thoughts by email at towncouncil@scarboroughmaine.org or boe@scarboroughschools.org. This is your budget, and your voice matters as we work to keep Scarborough strong and affordable.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Scarborough Town Council.