Falmouth’s proposed municipal budget for fiscal 2021 was ready for Town Council review when the COVID-19 pandemic hit in March and everything shut down.

Like in towns throughout Maine, many people were staying home and not buying new cars, taking out building permits or signing up for recreational programs.

Suddenly, Falmouth Town Manager Nathan Poore found himself back on his heels, trying to predict how much revenue the town would lose in the coming year and how to maintain municipal services without it.

Poore and the council eliminated four open positions, including his executive assistant and a police detective; put off replacing computers and fire department equipment; and deferred $821,00 in capital spending, including the purchase of a new fire truck.

“I had to cut $1.4 million from the budget overnight,” Poore said. “To bring that back is going to take years. Fingers crossed that it’s not any worse.”

Poore and other leaders of Maine’s nearly 500 municipalities are hoping the next round of federal COVID relief will help undo mounting financial damage to city and town governments that have been largely ignored despite the decline in tax revenue caused by the pandemic.


Municipalities have scaled back budgets, furloughed workers and postponed many purchases and construction projects, the economic impact of which threatens to ripple across communities in the coming months as the pandemic continues.

Portland, Maine’s largest city, has furloughed hundreds of its 1,400 municipal workers in a series of temporary layoffs, including top administrators, and frozen all pay increases for non-union employees. And in rural Monmouth, Town Manager Linda Cohen and the Select Board reduced the fiscal 2021 budget by nearly $240,000, including funding for a new police cruiser and a new snow plow truck.

Faced with such deep cuts, many cities and towns are desperate for federal relief that hasn’t been available so far, except for direct coronavirus-related costs such as public health education and enforcement of state mandates.

Without significant federal assistance to cities and towns, revenue lost now will have long-term impacts on municipal finances and future economic recovery, said Kate Dufour, director of state and federal relations at the Maine Municipal Association.

“A fourth federal stimulus package that not only provides direct relief to Maine towns and cities, but also allows those funds to replace lost revenues would be extremely helpful,” Dufour said. “(It would) allow communities to continue to provide much needed services to Maine residents, businesses and guests.”

In Cape Elizabeth, Town Manager Matt Sturgis and the Town Council eliminated or deferred $1.2 million in the fiscal 2021 spending plan in anticipation of COVID-related revenue shortfalls. That includes $300,000 in lost excise taxes and $100,000 in lost parking fees at Fort Williams Park and Portland Head Light, which usually draws about 1 million visitors annually from around the globe.


Sturgis also calculated a 15 percent or $129,000 reduction in anticipated revenue sharing from the state. “We’re hopeful to get ($731,000), but we understand there may be continuing challenges,” he said.

The deferred items include a property revaluation ($139,000), Shore Road paving project ($160,000), Kettle Cove Road drainage project ($370,000), LED street light conversion ($200,000) and firefighter breathing equipment ($200,000).

Sturgis said the firefighting equipment is expected to be safe for another year and the other projects can be delayed, but the impact of trimming that spending will be felt throughout the region, especially as other municipalities make similar decisions.

“That means we’re not using local contractors to do that work, and they’re not buying materials, or hiring as many workers, and it cascades out through the wider community,” said Sturgis, who is also chairman of the Portland Area Comprehensive Transportation System.

In South Portland, City Manager Scott Morelli and the City Council adjusted the fiscal 2021 budget to anticipate a $3.1 million shortfall as a result of everything from fewer business licenses being issued to property owners seeking tax abatements.

They covered the projected losses by pulling $1.7 million from available surplus funds, reducing expenses, postponing projects and furloughing or laying off 100 city workers during the last four months.

But the city can’t tap surplus funds again without jeopardizing its high credit rating, Morelli said, and projects can’t be delayed indefinitely.

“We’re going to be in a pretty big jam if we don’t get some federal relief,” Morelli said. “We really need help from the feds. We realize a lot of people are saying that, but hopefully it’s just this one time.”

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