SCARBOROUGH — Residents rejected a school budget Tuesday for the second time this year.

If it fails to pass on a third attempt, officials said the town could face a cash-flow problem and operational challenges.

Voters will get the opportunity to vote on a third budget in a referendum to take place either Aug. 22 or 29, according to Town Manager Tom Hall.

On Tuesday, voters rejected the proposed $47.1 million school budget by 1,930 to 1,847, a margin of 83 votes.

On June 13, 57 percent of voters opposed a $47.4 million budget

Town Council Chairman Shawn Babine said the council will meet Wednesday, Aug. 2, for a workshop at 6 p.m., followed by a first reading of a new budget proposal at 7 p.m. Babine said the School Board will be invited. 

Councilors will meet for a public hearing on the budget Aug. 9. A second reading could take place that night.

This is the seventh time in the last six years a school budget has failed at the polls in Scarborough. In 2015, residents defeated it twice; it took two attempts in 2012, and three referendums in 2013. 

Both Hall and Babine said if the budget doesn’t pass on the third try this year, which historically has not happened, it could create cash-flow problems for the town.

“Any further delays would represent operational challenges,” Hall said. 

Without a school budget in place, the town can’t set the tax rate and can’t send out tax bills. Hall said by law, taxpayers have to have at least 30 days to pay their bills. 

Without money coming in, the town could be forced to take out short-term loans to meet operational expenses. The loans would include the added expense of interest payments.

 “I don’t think people understand the criticality of where we are from an operational standpoint,” Babine said. “It is pretty significant.” 

The due date for tax bills is Oct. 15; if the budget passes in August, the bills would be out in time for residents to meet the payment deadline. 

The School Board cut $236,000 in spending after the first proposed budget failed in June. That resulted in a proposed 6.8 percent increase in school spending, down from 7.4 percent in the first budget. The town also trimmed an additional $71,000 from the municipal budget to keep the overall tax increase to just under 3 percent.

Under the most recent failed budget, property owners would have seen a 48-cent increase in the tax rate, to $16.40 per $1,000 of valuation. For owners of a $300,000 home, the annual projected tax increase would have been $144, for a combined tax bill of $4,920. The increase could be as much as 3.66 percent or as low as 2.33 percent, depending on valuations to be completed later this summer.

Scarborough’s proposed tax rate of $16.40 was lower than many neighboring communities, according to municipal online records. South Portland’s 2018 rate is $18, Portland’s $21.65, and Westbrook’s $18.88. Other nearby communities that haven’t officially committed their tax rates or still have the previous fiscal 2017 rates online include Cape Elizabeth at $18.22, Gorham at $17, Saco at $19.42 and Biddeford at $19.86, Old Orchard Beach at $15.46, and Falmouth at $15.09.

Some residents this week said the increase proposed by the town was still too much. 

Ryan Woodward, 25, a graduate of Scarborough High School, who said he was satisfied with the education he received, said, “It feels like the money doesn’t get used wisely. It is never going to be enough. They ask for more every time. I think it is a burden on the taxpayers.”

Donna Cleaves, who voted against both budget proposals, called the Scarborough schools “fantastic” and a “wonderful school system,” but still said taxes “cannot continue to increase at that rate” and the taxes are “forcing people out of this town.”

“They need to go back to the drawing board, they (taxes) are just way too high.” Cleaves said. “There has to be a solution other than these high taxes.”

She said taxes should not go up more than 2 percent a year. 

Steve Hanly, of SMARTaxes, a grassroots opposition group to the school budget, said in a news release that the vote “highlights the concern many residents have with the assumption that taxes should automatically be increased by 3 percent every year.”

Pradeep Sathyanarayana, who voted for the budget, disagreed.

“It is important to support our schools, teachers, extracurricular activities and sports,” Sathyanarayana said. “A good education is important to strengthen (students’) skill sets and to enable them take on challenges so they can compete at the state and national level.” 

He made a point of saying that even if he didn’t have children he would still be supporting the schools. 

Kris Eimickle, who voted in favor both times, said, “I thought it was a reasonable compromise in not having large increases and still have our schools properly funded.”

Hall said he was disappointed by Tuesday’s vote.

“It wasn’t for lack of effort, for everyone involved in the budget process,” the town manager said. “Clearly the effort didn’t resonate with the majority of the voters. We find ourselves in the position of feeling our way through the dark, not sure what the perfect reduction is to gain support … more work needs to be done.”

Melanie Sochan can be reached at 781-3661 ext.106 or [email protected]. Follow her on Twitter @melaniesochan.