The municipal budget was formally presented by the town manager and superintendent of schools to the Town Council on Wednesday, March 27. The total combined budget came in at a 6.46% net budget increase, considerably lower than the three-year average of 8.2%. While the budget review is starting far closer to the stated Town Council goal of 5%, work and further reductions are envisioned.
The budget review process is a critical period each year as the budget is largely a representation of our town’s priorities for residents. We pride ourselves in being a town where people enjoy living, a perception the community validated in the 2023 community survey in which 77% of residents indicated they were satisfied with their quality of life in Scarborough. When we look at the major services and budget drivers, they largely overlap with the reasons that make Scarborough a desirable place to live and work. Our schools and special services are some of the best in the state, our natural resources – parks, preserves, beaches – attract users from around the area, and many of the essential services we provide are second to none. Our municipal employees have earned a reputation for high customer service. and it is essential that our budget reflects these standards that the community expects.
The proposed FY2025 budget is intended to fund level services for our residents, that is, to maintain our existing facilities, services, programs and retain our valuable staff while balancing the increased costs of doing so. This approach is in contrast to prior years when we readily sought to advance council objectives, respond to community needs, or offer additional services and programs.
While the budget is thoughtfully limited to mainly level services, there are a few fiscal challenges outside municipal control that will make even that prudent approach more difficult. The Town of Scarborough anticipates a decrease in its total revenue from previous years due to significant reductions in both municipal revenue and the reimbursement for the homestead exemption, a combined figure of nearly $790,000.
We also anticipate increased expenses in FY25. Like some revenue decreases, some of the more notable expense increases are also outside of local authority. Increases to county tax and state-mandated programs such as general assistance and the implementation of the state’s paid family leave law in the form of a payroll tax are some of the governmental cost drivers. The cost for solid waste and recycling will be increasing as well.
In addition to these costs, the town has four collective bargaining agreements open that cover over 50% of our municipal staff. As anyone in the labor market can attest, the competition for qualified applicants is extremely high. Many of our municipal neighbors, who are seeking to attract and retain the same police officers, firefighters, dispatchers and plow truck drivers, have increased their salaries at unprecedented rates. Staff retention is both a main budget driver and key objective for the upcoming year.
Each budget year also includes some measure of facility and infrastructure maintenance, and this year is no exception. The budget includes Town Hall maintenance, paving, and vehicle/equipment replacement. We are including funding for sidewalk rehabilitation and accessibility improvements as the community has expressed a strong desire for sidewalk improvement. Additionally, the community has consistently expressed concern with the level of traffic and commute times. To that end, the FY25 budget includes a Transportation Study Project Design – Phase 1, Mussey Road intersection improvements, and a North Scarborough Running Hill Master Plan, which will serve as the foundation for intersection and traffic improvements.
As we formulated the proposed budget, we made strategic funding decisions based not only on meeting the service needs of the community, but also on maintaining a relatively consistent tax rate for taxpayers. Our approach to developing the FY2025 budget was influenced by a unique set of separate factors that are expected to have an impact on tax bills. The town-wide revaluation will impact tax bills, irrespective of any increase to the budget, due to an anticipated shift of the tax burden from commercial to residential properties. More specifically, residential home values are expected to appreciate in value at a higher rate than commercial properties. Tax bills for just over 1,800 households will also be impacted due to the elimination of the State’s Senior Property Tax Stabilization program. With the elimination of this state program, these households will effectively see tax bills reflect last year’s budget increase as well as any increase that may result from budget decisions this year.
What’s next? The Finance Committee will go through several drafts, collecting feedback from the public, Town Council, and the School Board to determine funding priorities and what is affordable in the year ahead. A final budget should be adopted in June. Follow along the process by accessing budget materials from the Town of Scarborough website homepage, and save the date for Budget Roundtable discussions with councilors on April 20, 22 and 24 (details available online). To share your thoughts, questions, or concerns, please do not hesitate to email the Town Council at towncouncil@scarboroughmaine.org.
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