Well, friends and neighbors, here we are again in late March. With too much snow still on the ground and a mean chill still in the air. And with April Fool’s Day close at hand.
We begin with our oft-promised, extremely unofficial Ten-Year Projection of Scarborough’s Facilities Plan. Apparently town and school officials are in the final stages of preparing the “official plan,” but we wanted LookOutScarborough readers to be suitably prepared before that plan is released. Especially those readers who are at risk for cardiac events.
The summary that follows was prepared by reviewing various town and school reports. In addition, we consulted a Magic 8 Ball, a Ouija Board and Madame Alakazam, the noted Old Orchard Beach psychic. Which is to say that our projection is a blend of verifiable data and unabashed guesswork. All of the projects are “real” in that they have been proposed in town and school reports. The estimated costs are likewise grounded in data from reliable sources. The timing of the projects is, on the other hand, made up based on our gut feeling. It will be interesting to see just how much capital spending (and related borrowing) town officials are willing to propose in the official plan.
Here’s our take on capital projects for the next ten years:
Perhaps two or three of these projects will get pushed out beyond the ten-year timeframe. Or will be substantially reduced in scope and cost. But even if we knock a third of the cost out, we’re still looking at $100 million of facilities investments over the next ten years. That’s a sobering thought…especially in view of the Town Council’s obvious willingness to increase the tax rate by 3% a year – or perhaps just a teenie bit more – year after year after year.
Paying for it all
The obvious question is, how do we taxpayers pay for all these capital projects? The equally obvious answer is, by taking on more debt. Unfortunately, we already have nearly $100 million of debt outstanding, an amount that ranks us right up there – if not at the top – in debt per capita of neighboring communities.
Here’s a summary of our current debt situation:
By comparison, each resident’s share of town debt in Cape Elizabeth is $1,700. In Yarmouth it’s $1,809 of debt per person.
And we’re considering adding another $100 – 150 million in debt? Yikes! Seems like a lot.
But no worries… our debt advisor says we can issue lots more debt without any problem. So bring it on!
Budget Update and a Proposal
We still haven’t learned enough about the Fiscal 2018 budget to share a meaningful analysis. Dribs and drabs of information come out here and there… the addition of a few part-time positions, the $900,000 increase in teachers’ salaries associated with the new contract, significant increases in health insurance premiums, etc.
One thing we keep our ears open for is some hint of cost-saving efficiencies or perhaps the consolidation or elimination of a position or two. But, alas, no such news seems to be forthcoming.
So in the absence of new information, here’s LookOutScarborough’s Budget Masterplan for Fiscal 2018.
Expenses will be prudently managed:
- Municipal and school expense growth will be limited to 3% or less. This seems like a reasonable increase in view of low inflation and essentially flat school enrollment.
- State school aid reduction of $1.4 million will occur. (While the amount is not certain, a significant reduction is highly likely…there’s nothing we can do about it.)
Partially offsetting the costs of the above two increases will be:
- Tax revenue will grow automatically as new properties come on the tax rolls and some existing properties get reassessed at higher values. (Every time a new $300,000 house/unit comes online at, say, Eastern Village, the Town gets about $4,800 of new taxes. So if 100 new homes get added in a year, that’s $480,000 of new tax revenue… without raising the tax rate.)
- Revenue will also grow automatically as excise tax revenue increases. As residents buy new cars, the Town benefits from increased collection of excise taxes.
To the extent that additional revenues (#3 & 4) are not enough to cover additional expenses (#1 & 2):
- Surpluses generated in Fiscal 2015 and 2016 will be used to cover any shortfall of new revenues not covering new expenses. The Town socked away surpluses of about $4.5 million in those two years. Remember, those surpluses are essentially your extra tax dollars that were collected over and above what was really needed.
The net result: no tax increase in Fiscal 2018!
This chart summarizes the arithmetic of a no-tax-increase budget for Fiscal 2018:
Too simple? Too reasonable? Perhaps both… but still a realistic possibility if town leaders were serious about financial discipline and minimizing tax increases. Never mind a 3% tax rate increase… let’s make Fiscal 2018 the year of no increase!
Coming very soon… The Scarborough Downs Saga
All the details next time.
In the meantime, we like PLAUSIBLE DENIABILITY in the third race on Sunday.