Oak Bluffs is in the throes of another tight budget season, as education costs continue to outpace tax resources.

This week, the town selectmen gave their blessing to a budget for fiscal year 2016, estimated at $26.5 million, up about three per cent over last year.

The budget will come before voters at the annual town meeting in April.

But unlike last year, when the town turned to voters for an additional $600,000 to close a funding shortfall, this year’s financial plan is balanced and will not require an override.

That’s largely because the town is funding part of the budget with excess revenue raised in last year’s override.

But if education costs continue to exceed the annual levy limit set by Proposition 2 1/2, the state tax cap law, the town will not have that luxury, and more overrides may be necessary, the town administrator warned at Tuesday’s meeting.

“There is not going to be a lot of room for big growth next year,” Robert Whritenour said.

School spending makes up the largest area of increase in this year’s budget.

The regional high school budget, which was certified in December, presents an estimated 10 per cent increase for Oak Bluffs, about $450,000 in additional costs.

Add that to a proposed five per cent increase in the Oak Bluffs school budget, and the total comes to $853,056 in additional education costs for next school year.

These costs were originally assessed at even higher levels, but the town expects the assessment to go down once final numbers for the state governor’s budget are in place.

”We are trying to pull out all the stops to meet the needs in the education budget, and I think we are just about there,” Mr. Whritenour said.

He called for continued teamwork with school leaders to address rising costs and limited tax revenues.

At both schools, increases are attributable in part to staffing costs. At the high school, additional funding was requested to cover a drop in state aid and a series of building maintenance projects.

Excluding schools, spending is up 1.7 per cent across the other town departments.

The modest increases include pay raises for some department heads and some staffing increases.

In the building and health departments, the town administrator has eliminated shared half-time positions in favor of full-time positions.

Similarly, a part-time assistant shared by the assessor and treasurer will become full time.

The budget also includes a two per cent cost of living raise which the town workers’ union negotiated with the town.

Changes are also coming to the council on aging, which has been functioning without a director since Roger Wey was let go in June amid allegations that he had mismanaged a fund for fuel assistance.

Instead of replacing Mr. Wey, the town plans to increase the duties of the outreach coordinator to a full-time position.

“That is where a lot of the need is in the community, to outreach seniors in their home and connect them to the services that are available,” Mr. Whritenour said in his presentation.

Property taxes make up 80 per cent of the town’s revenues. Other sources of revenues include harbor receipts, meals and hotel taxes, ambulance and building permit fees.

Selectman Walter Vail suggested an examination of the fee schedule.

“We have not raised fees to my knowledge in several years,” he said. “Is that something we ought to be looking at this point?”

Another source of revenue for other towns is state aid, but this year Oak Bluffs owes the state an estimated $150,000 in part to pay for students who opt out of the local school system.

Despite the moderate incomes of year round residents, the community is considered affluent as a result of high property valuation and is therefore overlooked when it comes to state aid, Mr. Whritenour said.

Selectmen have arranged a meeting with state Rep. Timothy Madden to brainstorm ways to change the funding formula.