Proposed municipal and school budgets for Yarmouth will increase slightly to keep up with the times, according to officials.

The proposed school budget will increase 7.56% and the municipal budget will increase either 4.6% or 6.3%. Both town and school staff said the proposed budgets are not adding services or projects, but rather increasing to cover rising costs of living and providing services.

The town budget increase largely hinges on whether the town uses approximately $300,000 in Tax Increment Financing funds for capital improvement expenses for the upcoming fiscal year. If the TIF funds are applied, the municipal budget would increase next year by 4.6% to $18.8 million. If they are not used, the municipal budget would increase by $300,000, an increase of 6.3%.

“Broadly speaking, we anticipate that roughly one-third of property owners will see an increase in their tax bill, one-third will see a decrease, and one-third will see little or no change,” wrote Town Manager Scott LaFlamme in an email.

Home revaluations are still underway in Yarmouth and will conclude in early summer. This makes estimating the municipal tax rate inexact, as base property values on homes are still unconfirmed, though town staff estimate a 75% increase in value. Under the budget option that uses TIF funds, LaFlamme gave the conservative estimate of a fiscal year 2026 tax rate of $15.92, a 38% decrease from this year. However, whether individual property taxes increase or decrease overall will depend on the evaluated change in each home’s value.

Growing municipal expenses include an increase in wages in accordance with cost of living, benefits and health insurance premiums for town employees. Other increases include the cost of municipal services such as trash collection and fire hydrant rentals.

“We’re looking at a pretty flat budget here from an operations perspective,” said LaFlamme.

“The cost of everything continues to go up, so we are looking creatively for revenue levers outside of property taxes to address some of those increased costs,” he said.

Some town positions will change in the upcoming fiscal year. An assistant town manager job and part-time counter clerk role will be eliminated, and four positions that are currently part-time will become full-time to make some vacant positions easier to fill.

The school budget was proposed at $42.2 million. Increases in the budget were driven by rising staff salaries and health insurance premiums, and the rising costs of utilities and supplies.

For budget savings, the school will see a slight reduction in overall staff, as two fifth-grade teachers are retiring and only one will be replaced. The cost of adding more support services for students, a need that has risen in Yarmouth schools over the past decade, will be deferred to another year.

“This is truly a maintenance budget this year. We are not adding but maintaining our current services,” said chair of the Yarmouth School Finance Committee Anne Fleming.

For both the school and town budgets, additional savings may be included down the road, as town and school staff are working together to explore a privatized alternative to Maine’s new Paid Family Medical Leave program that will begin in 2026. If this replacement option is approved, it would result in significant cost savings for both budgets, as this would allow forgoing 13 months of paying into the state plan before funds become available to employees. However, it is unlikely that this approval will be known before the budgets are decided in June.

The Town Council will review a second draft of the proposed budgets on May 1. On June 3, the budgets will be presented at the Town Meeting and residents will vote.