In a May 26 special Town Council meeting, the Fiscal Year 2022 budget was voted on and approved unanimously by the Town Council. The municipal budget process for the Fiscal Year 2022 budget began with an initial presentation on April 7. Per the Town Charter, the Council must adopt the budget no later than 60 days from submission. Over the last seven weeks, the Town Council’s Finance Committee reviewed and recommended adjustments to the proposed budget to align with community needs. Central to discussions has been the goal set out by the Town Council in the beginning of the year to keep the mill rate to no more than a 3 percent increase. This, coupled with the imperative for restoration bringing the proposed budget in at a higher-than-expected amount, required several rounds of adjustments to configure a reasonable final budget for this year and coming years.

Budget adjustments were made over the course of five Finance Committee meetings, occurring nearly weekly in conjunction with the School Board meetings, which were reviewing the school portion of the municipal budget. As they reviewed budgets department by department, they found areas for cost reductions, which resulted from scaling back restoration proposed expenses of Town items by $55,771. In addition, the School Department was able to reduce their request by $536,132 using federal funding to support the addition of five teaching positions and lower than expected health and worker’s compensation insurance rates.

In addition to reduction and streamlining, new information regarding revenues in the current year came forward. Revenue generated from excise taxes in 2021 was higher than anticipated, a trend the Town expects to continue. As a result, excise revenue projections were increased by $550,000. The Town also received updated municipal revenue sharing projections which increased the projection by $697,088 from the first reading. Additional revenues from an increase in planning permit fees ($135,000), expected child care revenues ($111,000), and revenues through interlocal agreements with other municipalities ($70,500) as well as federal contracts ($30,000), had a substantial impact on the net budget.

The Capital Improvement Plan saw a number of adjustments through the budget review process including a reduction of approximately $286,250 in appropriated expenses to fund capital projects. This reduction is attributable to perhaps the largest change to the Capital program in the establishment of a Capital Reserve Account. The Capital Reserve Account, which will be funded with additional excise revenues expected in the current year, will serve to reduce the amount necessary to fund the capital program by appropriation in the future.

Between budget adjustments to reduce costs and the additional revenue, the budget was lowered by $3,553,533 from the initial proposal, resulting in an expected increase to the tax rate of 2.76 percent prior to any further potential adjustments. We have a high degree of confidence that Scarborough will receive additional general purpose aid for Schools. In the event this additional revenue is received, the Town Council did express the intention of allocating any additional school funding to reduce the tax (50 percent) and fund a School Capital Reserve Account (50 percent).  Based on this action, in all likelihood the expected tax rate will increase slightly more than 2 percent (2.09 percent based on projections).

Finally, the Town did not include the use of American Recovery Plan Act (ARPA) funds in the budget (an allocation in excess of $2 million to be received over the next two years). Rather, the intention is to take the time necessary to be thorough and deliberate to ensure these one-time monies are not used to support operational expenses but are used to provide maximum benefit to Scarborough residents and taxpayers.

The Town will continue to provide budget updates throughout the year as additional information becomes available.

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