The Scarborough Town Council unanimously approved a combined $73.5 million school and municipal budget on Wednesday, citing more than $3 million in unexpected windfalls as instrumental.

The budget was initially proposed at $77.1 million, but officials cut $3.4 million to meet the council’s tax rate increase cap of 3%. The budget approved May 26 represents a 2.78% increase in the tax rate. For the owner of a $300,000 home, according to town documents, the tax bill will go up by $123. Residents will have a chance to vote on the school department’s portion of the budget, totaling $55.7 million, at a referendum vote June 15.

Town Councilor John Cloutier, who also serves as the council’s finance committee chairperson, said this week that unexpected revenue sources are making up for $3.4 million that was cut. He said based on current increases in excise tax revenue, the town expects to collect as much as $550,000 more in excise tax next year.

Another expected increase is in revenue sharing, or the portion of sales and income taxes collected by the state and allocated to the town. This year, Cloutier said, those funds are up 10% and projected to climb even higher next year. The town expects to receive nearly $1.1 million more from the state and will also use that extra money to help cover the cuts.

Thanks to the funding, Cloutier said, several capital improvement items will go forward, such as studies the town wants to conduct to plan out future projects. Examples include a $120,000 study to map out improvements to Mitchell Hill Road and a $300,000 study to examine the consolidation of school department facilities, which could one day include combining elementary schools, he said.

Other sources of additional funding the town is expecting that aren’t part of the 2022 budget, Cloutier said, include $945,000 in school subsidies over and above what the state is already allocating to the district. In addition, the federal government is expected to allocate as much as $2 million to the town in pandemic relief funding.

“Every time we turn around, there’s another revenue source that’s opened up,” Cloutier said at Wednesday’s meeting.

Only one resident, Susan Hamill, of Bay Street, spoke during public comment at Wednesday’s council meeting. She thanked the council for its work and noted the extra funding coming in was welcome, but worried that officials would get too complacent.

“I am very worried about what happens when all the free money goes away, and we taxpayers will be called on to make up the difference,” she said.

Cloutier acknowledged this week that the council is well aware that extra revenues won’t last forever.

“You want to be careful how you use it, because it can go the other way pretty easy, and probably will,” he said.

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