AUGUSTA — School board members are concerned the mayor’s proposal to spend more reserve funds to soften the impact of the school budget on taxpayers this year could result in an even bigger hit next year.

Mayor William Stokes, at an often heated budget workshop last week, proposed a series of budget changes that would decrease the impact of the budget on local property taxpayers from 6 percent to 3.4 percent.

At a special school board meeting called to discuss the proposed changes Monday, board members expressed concern about a part of Stokes’ proposal that suggested the school department spend $414,000 more from its fund balance, or rainy day fund, which includes unspent money generally reserved for emergencies or to help offset future years’ expenses. The school budget approved by the board in March already uses about $800,000 from the fund balance.

City officials have no authority to tell school officials how to spend or fund their budget. Councilors’ only role in the school budget is approving the total budget itself, as part of the city budget, and they cannot order changes to school department line items, nor require it to take money from its fund balance.

“The question is: Do you as a school board want to reduce fund balance by another $414,000 or find that money some other way?” said Interim Superintendent James Anastasio. “My recommendation is, to get to a place where we are not going to rely on fund balance, you need to have your budget funded at a higher level than it is now. I don’t know what that number is.”

Board members expressed concern about relying so much on fund balance to pay for ongoing operations. And they fear that tapping into the fund so heavily this year would mean there will be less in it next year to offset expenses, potentially leading to an even bigger tax increase next year.

“I’m not comfortable pulling that amount of money out of fund balance when that could be the only money we’d have to fall back on the next three years,” said board member Larry Ringrose. “If we’re not going to cut fund balance, and we’re going to settle those contracts, then we have to talk about where we’re going to get that money.”

The board is currently in contract negotiations with teachers and two other employee unions, and both board members and city councilors have expressed concern that school workers have gone without meaningful raises in recent years, hurting morale.

Under Stokes’ proposal, the tax rate, which in earlier budget scenarios was projected to go from $17.55 to $18.62 per $1,000 of valuation, would instead increase to $18.15.

For the owner of a $125,000 home in Augusta, that rate would result in a tax increase of $72 for the year.

Taking an additional $414,000 from the approximately $1.6 million fund balance, on top of the roughly $800,000 school officials had already planned to take from it, would deplete it to around $400,000.

Anastasio said the schools typically return about $600,000 to the fund balance every year.

Stokes’ proposal also would use savings from two areas where school officials said Augusta may be able to save about $150,000.

Part of Gov. Paul LePage’s state budget would shift some of the responsibility for paying teacher retirement costs from the state to local school systems. Anastasio included $452,000 in the budget to pay those costs should the governor’s proposal pass as part of the state budget. However, state officials have said that estimate is high, and have suggested Augusta’s share of teacher retirement costs would be closer to $360,000.

Also, the cost of insurance came in lower than budgeted, with costs increasing 3 percent, instead of the 10 percent increase in the budget.

Together, about $150,000 in savings could result in those adjustments.

When school officials first presented the budget to city councilors, they stressed that local taxpayers, if the budget were approved as proposed, would be contributing $242,000 less than the state’s Essential Programs and Services funding formula indicates should be raised from local taxes.

City councilors are scheduled to vote on the total city and school budget Thursday.

The school portion of the budget is then scheduled to go before residents citywide in a budget validation referendum June 11. Residents do not vote on the city’s portion of the budget, which is set by a vote of councilors.

Keith Edwards — 621-5647
kedwards@centralmaine.com