SCARBOROUGH — Town councilors unanimously passed a $65 million town and school budget Wednesday that could increase taxes for homeowners as much as 4.6 percent.
But according to information presented by town officials, the tax rate will still be lower than most nearby communities.
The budget calls for a tax increase of at least 2.83 percent under an “optimistic scenario,” and as much as 4.6 percent under a “cautious” estimate. The mid-range scenario is a 3.49 percent increase.
Owners of homes valued at a median $300,000 would be levied $4,911 in annual taxes under the optimistic tax-rate scenario, or $16.37 per $1,000 of valuation, which would be an annual increase of $135.
Under the mid-range increase of $16.48 per $1,000, the same homeowner would pay $4,944, an increase of $168.
If the cautious scenario of $16.58 per $1,000 in valuation is adopted, the homeowner would pay $4,974, or a $198 increase.
The final numbers will be driven by the town’s valuation, which won’t be set until August.
The tax rate has decreased since the preliminary budget was unveiled and passed in a first reading April 5. Since the initial budget numbers were released the town has trimmed $1.8 million.
During the first reading, the estimated tax rate increases homeowners could have seen ranged from 5.77 percent, equal to $16.84 per $1,000 of assessed value, to 7.14 percent, or $17.06 per $1,000 of valuation.
Taxes for a median home valued at $300,000 could have increased from $276 to $342.
On the school side, taxes are set to increase 7.39 percent. The revenues for schools are down by 17.42 percent, mostly due to an expected $1.4 million loss in state subsidy under preliminary figures released by the state. Expenditures are up 3.38 percent, driven by contractual obligations, including a new, three-year teacher contract.
School Board member and finance committee Chairwoman Jodi Shea said, “We are still looking at a large loss of revenue, which is driving the costs.”
Councilor Peter Hayes, who is also the council finance chairman, said Scarborough still has the third-lowest tax rate in the area.
Hayes presented a chart of a dozen nearby municipalities and their estimated tax rates for the 2018 fiscal year. Only Old Orchard Beach at $15.94 per $1,000 and Falmouth at $15.98 per $1,000 had lower rates, according to Hayes. Portland topped the chart with an estimated tax rate of $21.66 per $1,000.
Councilor Katy Foley said she supports the budget “in the hope that the state will come up with more money so we can keep it under 3 percent.”
Council Chairman Shawn Babine, who has been involved in 10 budgets, said building the budget is never easy, and councilors will never make everyone happy.
Babine criticized the Legislature, saying the problem is not local, it is at the state level. Babine said not only is the State taxing away education funding, but it keeps taking other funding away; he urged residents to call their representatives.
The school budget must still be approved by voters in a validation referendum on June 13.