After a decade of rapid population and sales tax growth, Erie’s revenues are leveling out, putting some pressure on the town to tighten its belt as officials build the 2027 budget.

Erie was listed last year among the fastest-growing communities in the country, nearly doubling in population from about 22,400 to 42,000 from 2016 to 2025.

Town spending grew with it. New residents brought demand for additional programs, services and employees, and expenditures increased by an average of 14.3% over that period.

For years, growing sales tax collections helped support those needs, with revenues increasing by an average of 11.6% in that same period. Expenditures growing faster than revenues was noteworthy but not “immediately problematic,” town staff said in a recent budget meeting, because of the “town’s strong reserves and economic environment.”

But that picture started to change in 2025, as inflation and economic uncertainty slowed revenue growth. Erie’s year-over-year sales tax revenue growth is now below 2%, and recent revenue trends indicate revenues “will continue to stagnate or even decline,” a town memo says.

Sara Sands, Erie’s finance director, said the shift reflects both broader economic conditions and the natural maturation of a community that spent years growing at a breakneck pace.

“It’s not necessarily cause for alarm. It’s pretty normal,” Sands said over the phone. “But what that does mean is that what we’ve done in the past, where we’ve spent a little bit more because there was available funding, we have to temper that slightly.”

Looking at 2027, the town’s departments were asked to reduce their proposed General Fund operating budgets by about 8% overall, as staff works to preserve core services and existing service levels.

Erie’s personnel growth, one of the primary drivers of increased spending in recent years, is also expected to slow. Sands said staff had already become more deliberate about adding positions, vehicles, equipment and other expenses that can stack up over time.

“I think that we did know that Erie would at some point … level off and normalize around sales and use tax,” Sands said. “What we didn’t expect were some of the external geopolitical … gas price increases, continued inflation, consumer confidence going down.”

For now, the town has balanced its projected 2027 operating and personnel expenses, as well as its capital improvement fund. (Among other things, “capital” assets include land, infrastructure such as roads and bridges, and buildings.)

Current forecasting shows the capital improvement fund beginning to dip into the red in 2028, but Sands said that does not mean Erie is running out of money for current projects.

“That is totally new funding availability,” Sands said. “That doesn’t mean we’re running out of money for current projects or projects that are already slated in 2027.”

Money budgeted for capital improvement projects each year frequently goes unspent and rolls forward, she added.

The numbers for 2027 are still being worked out, and staff expects to provide a clearer picture of those carryover funds when it returns to the Town Council in October, also with departmental budgets and updated projections for the remainder of this year.

Town staff’s recommended budget is scheduled to be released later in October, followed by council consideration later that month. The council is expected to hold its final public hearing and potentially adopt the 2027 budget sometime in November.

“We’re feeling really good about the budget right now,” Sands said.