Auburn leaders set 'baseline' FY26 budget guidance, cite risks from state aid and rising costs

Auburn city and school leaders on Monday said they will build a baseline fiscal 2026 budget that avoids new services while preparing for a year of uncertain state and federal revenue and rising costs.

City Manager Phil Crowell and Superintendent Sue Doris told a joint workshop of the City Council and School Committee that their shared management goal is a “current services” budget—no expanded programs—because of uncertainty in state revenue sharing, grant reporting requirements and inflation-driven costs.

The managers described three risk tiers. High risks include possible cuts or shortfalls in state revenue sharing (the city and schools are pushing to preserve a 55% state share for education), pressure on municipal reimbursements such as homestead and general assistance, and audit- and grant-related reporting that has increased staff time. Crowell said the city is watching American Rescue Plan Act (ARPA) deadlines tied to projects that must be spent by the end of 2026.

Medium risks include labor contracts. Crowell said the city will negotiate a fire contract and a police command contract; the school side is negotiating a teacher contract and has just settled its support-staff agreement. Crowell confirmed all three municipal contracts expire June 30, 2026; the teacher contract takes effect Aug. 1.

Officials also flagged implementation risks from internal changes: the Auburn School Department has a new finance team and the city and schools are moving to Munis, a shared financial platform the city expects will deliver fuller benefits in FY26 but introduces near-term complexity during implementation.

“We know this is going to be a difficult year,” Crowell said, noting uncertainty at the national and state levels. “Our shared management goal … is to just provide a baseline budget for you, no expanded services, and hold the line the best we can.”

Superintendent Sue Doris said enrollment rose about 65 students at the Oct. 1 count, which could raise state funding, and that the district’s student population includes more multilingual learners, students qualifying for free and reduced lunch and students experiencing homelessness—factors that affect special-education and support-service budgets. Doris said special-education costs are “always…volatile” and typically increase about 6% or more annually.

On benefits and insurance, Crowell said the city received preliminary Maine Health Trust guidance showing health-insurance increases “right around 10 or 11%,” but that the city is budgeting at about 15% until final rates arrive in April. The state’s new Paid Family Medical Leave assessment will require a 0.5% employer contribution once all contracts move to the new terms; Crowell estimated that change will add about $85,000 in FY26 city costs when full participation begins.

Other drivers: inflation and utility cost increases, supply-chain and contractor shortages that delay capital projects and increase costs, and two pending RFPs the manager said will likely raise costs—solid-waste recycling and transit services provided under LATC (city transit). Crowell said federal transit funds that minimized rate increases in prior years are no longer available, so transit costs will rise.

Councilors pressed for detail. Councilor Adam Platt asked about health-insurance trends; Crowell and Doris pointed to the Maine Health Trust numbers and the April finalization. Councilor Tim Cowan asked about student-population effects; Doris said higher counts and higher-need students could increase state aid but also drive costs. Councilor Leroy Walker urged a tight budget to limit mill-rate growth. Several councilors said they will come prepared with specific service cuts if they want lower tax impacts.

The workshop was framed as an early-stage discussion: school committee members had already begun budget work, while city budget work will kick off in March. Crowell and Doris asked councilors and school-committee members for guidance as departments finalize numbers.

Ending: Officials said they will return with more detailed budget drivers and assumptions as final health-insurance and state-revenue projections arrive and as collective-bargaining outcomes become clearer.