AUGUSTA — More state money for local schools than first expected and other changes could lessen the hit of the proposed city and school budget on taxpayers while not making any additional cuts to programs or services.

Potential changes discussed by city councilors and school board members in a budget workshop late Thursday could reduce the impact of the budget on property taxpayers, from the initially projected 6.1 percent tax increase to an increase of around 4 percent.

“We’re beginning to get closer, getting out of the realm of scary numbers and into the realm of… arguable numbers,” City Manager William Bridgeo said.

The prime change is an increase in projected state aid for education since the school board approved its share of the budget March 19. The $409,000 increase bumps state funding for the city’s schools from an initial estimate of $12.9 million to $13.4 million. The most recent state figure is based on the supplemental budget, which was approved by the state Legislature but vetoed by Gov. Paul LePage. However, LePage’s veto was overturned by legislators Thursday.

James Anastasio, interim superintendent, said he plans to recommend the school board use $200,000, about half the additional state funding, to reduce the amount to come from local taxpayers.

He said he also plans to recommend using about $60,000 from the additional state money to add a guidance counselor position and nurse position at Hussey Elementary School. The school board would have to approve that recommendation. He said the city’s other three elementary schools each already have those positions in their schools, but Hussey does not. He said adding the positions at Hussey is a matter of equity for the approximately 280 students who go there.

The remaining approximately $140,000 will be used to fund the budget by reducing the use of the fund balance account, an account made up of money not spent in prior budgets and generally used for emergencies, from $1 million to $860,000.

Added to the potential spending reductions on the school side of the budget is an additional $42,000 in projected savings from the planned conversion of four schools to natural gas heat.

“With what the city is doing, the total tax request for this budget would be significantly lower, which would make everyone happy,” Anastasio said.

The potential changes to the city budget Anastasio referenced would increase the amount to be taken from the city’s fund balance in each of the next two years, from $350,000 each year to $600,000, according to Bridgeo and Ralph St. Pierre, finance director and assistant city manager.

The increase in money taken from the fund balance would reduce the amount needed from taxes. However, it would mean the fund balance will be that much lower in future years, leaving less money in the account to help offset the impact of future spending on taxpayers.

Together, the changes would reduce the $1.6 million tax increase in Bridgeo’s first proposed city and school budget for the year to about $1.1 million.

Extensive debate at the budget workshop focused on whether or not Augusta is meeting the local funding expectations of the state’s Essential Programs and Services funding model.

The convoluted formula sets minimum amounts the state determines should be paid from local taxes in school budgets.

Last year, Augusta fell about 6 percent short of the EPS-determined minimum local funding figure.

For the upcoming school year, the EPS formula indicates Augusta should spend at least $12.2 million in local taxes on the school budget.

Whether Augusta will meet that level is unclear. The school budget approved by the school board in March proposed to use $12.3 million in local tax dollars, which would seemingly put Augusta above the EPS amount. However, with Anastasio’s proposal to use $200,000 from the additional state funding to reduce the amount coming from taxes, Augusta would appear to be back below the EPS amount.

Further complicating the issue, Anastasio said the state EPS formula doesn’t include some debt service payments toward the local contribution so it is not a simple calculation to even figure out if Augusta is reaching the EPS-set amount.

That question is relatively moot at least until the 2016-2017 school year, when school systems could be penalized if the local contribution to their school budgets doesn’t meet or exceed the EPS determined minimum funding amounts.

Anastasio said Augusta is probably one of only five or six districts of any substantial size in the state not currently meeting or exceeding their local EPS funding contribution amounts. He said the formula was meant to set minimum expected funding amounts, but has since come to be seen, by some, as a recommended funding amount.

“EPS was not intended to say that’s what people need to have the best possible education, it was intended to ensure kind of a minimal level of education,” he said. “It was established as the floor. It has since become the ceiling.”

Mayor William Stokes, a former school board member, expressed his ongoing frustration with the EPS formula. But he expressed optimism the process of setting the school budget, which must ultimately be approved by city councilors before going to voters citywide in a June referendum, is making progress.

“One of the challenges the city council has is how do we get a budget we can coalesce around and feel comfortable with the level of taxation that our constituents find acceptable,” Stokes said. “My sense is we’re working our way to that. I feel encouraged we’ll get to a budget that will provide the school department with its needs, at least for this year, and will fund city services at a level people have come to expect, with a reasonable tax increase.”

A public hearing on the budget, before the workshop started, drew no comments from the public.

Keith Edwards – 621-5647 | kedwards@centralmaine.com | Twitter: @kedwardskj