Town of Scarborough Presents Fiscal Year 2027 Budget

The municipal budget was formally presented by the Town Manager and Superintendent of Schools to the Town Council on Wednesday, April 1. The total combined budget came in at a 7.83% net budget increase, consistent with the average net budget increase of 7.26% for the last five years at the starting point. This equates to a 5.97% increase in the tax rate. The main areas of focus in this year’s budget continue to be the high priority on delivering quality essential services and education, while limiting new investments as the fiscal impacts of past investments are absorbed.

As a starting point, major considerations during the budget development were the Town’s current financial position, the future budget impact of the voter-approved school solution, and monitoring volatile essential goods like fuel and utilities. The FY2027 budget largely maintains level services and accounts for the overall increases in personnel costs and health insurance. Personnel expenses represent 65% of the municipal budget. The FY2026 budget (last year) included the addition of 16 new full-time employees, predominantly in public safety, and while they have brought measurable returns, this budget serves to recognize the fiscal impact from last year.

Other notable costs are influenced by external factors and a capital budget that proposes some significant investments. Scarborough’s portion of the Cumberland County budget is increasing by 9.83% largely due to the decrease in county revenue related to federal contracts with the county jail and Scarborough’s increasing valuation. Additionally, fuel increases of 15-20% at the pump, if persistent, will apply a strain on operating budgets for the School, Police, Fire, and Public Works. Larger investments proposed in the Capital Improvement Plan (CIP) include Scottow Hill Road repair (in the event grant funding is not secured), the reconstruction and improvements to East Grand Avenue, and a significant upgrade to the Town’s radio communications system, which if approved by the Town Council will additionally require voter approval. While the CIP includes these large projects, 78% of that budget’s focus is on maintaining level services, while 22% is for service improvements.

Fiscal stability and responsibility is vital to the Town, as the interest on long-term general obligation bonds that fund our capital investments can be reduced with favorable bond ratings. The Town has steadily increased its Unassigned Fund Balance, resulting in a 2025 bond rating upgrade from Moody’s Ratings to Aa2 and recently affirmed in January 2026. The Town also uses Tax Increment Finance district revenues (the property taxes paid on the sheltered value within the district) to offset operational expenses, pay existing debt services, and cover capital expenses that would either need to be bonded (financed) or appropriated. As growth in the TIF districts continues, the TIF revenues created will serve as an important way to manage the tax rate and reduce the impact on all taxpayers.

The budget review process is a critical period each year, as the budget is largely a representation of our town’s priorities for residents. Over the next several weeks, the Finance Committee will review department budgets and collect feedback from the public, Town Council, and the School Board to determine funding priorities. The Town Council aims to adopt a final municipal budget on May 20, and the school budget referendum is Tuesday, June 9 (Election Day). Follow along the process by accessing budget materials from the Town of Scarborough website homepage. To share your thoughts, questions, or concerns, please do not hesitate to email the Town Council at towncouncil@scarboroughmaine.org.

FY2027 BUDGET