Early Forecast Shows Tight Budget For Chatham

CHATHAM – It’s taking more and more money to maintain the town’s current level of services, according to a forecast of next year’s budget.

 At a budget summit held Oct. 21, officials estimated that the fiscal 2027 budget, which begins next July 1, will increase by just over 5 percent. While lower than the average 8.5 percent budget increase seen between 2023 and 2026, much of the increase in the town operating budget is in fixed, nondiscretionary expenses, according to a budget overview presented by Town Manager Jill Goldsmith and Finance Director Carrie Mazerolle.

 “Even with a moderate overall increase, a larger share of resources is directed toward maintaining current service levels, which can influence flexibility for other priorities, capital needs or potential service enhancements,” according to the budget memo.

 The early forecast estimates the town’s fiscal 2027 operating budget at $47.3 million, a 4.86 percent increase. Combined with a projected $12.5 million education budget, the overall total for next year’s budget comes in at $59.8 million, or just over 5 percent. The current year’s operating budget is $45 million.

 Last week’s session was the 14th annual budget summit, bringing together the select board, finance committee and Monomoy Regional School District administrators to review the budget process, priorities and fiscal drivers before development of budgets begins, said Goldsmith. This year’s goals are to protect core town services and values, maintain fiscal responsibility and fund community priorities.

 Those priorities include promoting year-round housing opportunities, maintaining educational excellence, fostering a vibrant and sustainable local economy, environmental conservation, coastal resilience, water management and “responding effectively to a diverse, welcoming and livable Chatham,” Goldsmith said.

 Mazerolle said local receipts — which include room and meals taxes, beach fees and other local revenue — will be projected at 88 percent of last year’s receipts, rather than 85 percent as been used in the past, to help minimize the budget impact on the tax rate. 

 “We’ve had a lot of increases over the past few years,” she said of local receipts. But first quarter receipts this year compared to last show a decrease of $114,000. That is likely to even out as additional receipts are reported.

 “This is another reason why we estimate conservatively, because local receipts are subject to fluctuations based on the timing of collections, economic activity and one-time actors that can vary from year to year,” Mazerolle said. Both room tax and short-term rental taxes, for instance, were down slightly in 2025 compared to 2024, while meals tax revenue appears to be leveling off, she said.

 New growth — additional taxes from construction of new homes — is projected at $375,000, less than the $463,000 average seen in recent years. 

 Slightly more than $3 million in capital expenditures were approved this year, with some $19 million in requests for next year. The requests will be reviewed and winnowed down as part of the budget process.

 Factors likely to influence the fiscal 2027 budget include health insurance premiums, salary increases, the slowing real estate market and impacts to local receipts. Uncertainty around inflation, shifts in consumer spending regarding vacations, and the dwindling availability of grants all put pressure on the budget, Mazerolle said. Utility costs have also risen substantially; because of higher energy prices, the town had to tap into the inflation protection capital article passed at May’s annual town meeting to subsidize utility expenses to the tune of $100,000.

 “These are all items we have to keep in mind when we work on the 2027 budget,” she said.

 The timeline for budget review calls for the select board to finalize its goals and objectives for the coming fiscal year by Nov. 18. Department heads have a Nov. 21 deadline to submit operating and capital budget requests to the town manager. Financial articles for the May annual town meeting are due Dec. 12. The Monomoy District budget must be filed with the town manager by Jan. 13. Goldsmith will make her budget recommendations to the select board and finance committee on Jan. 20, with the finance committee’s recommendations to the select board due Feb. 17. The select board will send its approved budget to the finance committee by Feb. 24, with the finance panel filing its recommendations by March 11. A date has not yet been set for the annual town meeting.