The Madison school district is planning to use about $1.1 million in reserve money — about three-quarters of the district’s reserves — to finance the 2016-2017 budget.

The proposed $9.6 million budget is up less than 1 percent from the current budget and would not cost taxpayers any more money, according to School Administrative District 59 Superintendent Todd LeRoy, who said it is important to the district that residents are presented with a flat budget following a half-million-dollar loss in state funding and the Madison Paper Industries mill closing.

“With everything going on in the community, we felt it was important for the school to try and come up with a budget that wouldn’t cause any increase in taxes,” LeRoy said. “That’s why we pulled that money this year, enabling us to go to our community without having to ask for anything additional. We have a lot of people who are very angry and afraid of what the future holds, and we didn’t want them to have to worry about their schools as well.”

Residents are scheduled to vote on the budget at a meeting at 7 p.m. Monday in the Madison Junior High School cafeteria. A referendum will be held May 24.

The Madison district is losing $486,614 in state funding next year, and officials in the district originally were faced with trying to raise the additional money from taxpayers, LeRoy said, but it decided instead to draw on reserves. The use of about $1.1 million will leave the district with $250,000 to $300,000 in reserves.

“Anytime you draw that far down, it’s a risk,” LeRoy said. “What people don’t realize when you talk about your reserves is that it isn’t just money sitting in the bank collecting interest. That’s money that you use to pay your monthly bills until you get your aid from the state or from the local community. By pulling it down that far, we are putting ourselves in a position where, yes, we could have to short-term borrow to pay our bills.”

Last year the district reduced its budget by 4 percent following a major loss in valuation at Madison Paper Industries, the town’s largest taxpayer. The year before that, voters approved a $10.08 million budget that included the elimination of four teaching positions and the use of $300,000 form reserves to reduce costs.

“We’ve been cutting and trying to be fiscally responsible for our community all along, and we really have very little that we can cut from without cutting programs,” LeRoy said in 2015.

Like neighboring School Administrative District 74, SAD 59 has sustained a small increase in health insurance costs also associated with the closure of Madison Paper Industries. The mill’s closure is costing the Anson-based district an additional $52,000 in 2016-2017. LeRoy said he did not have a figure for how much the mill’s closure is contributing in increased health insurance costs in SAD 59, but “we did put some extra money into the budget as far as insurance goes.”

“We’re gambling a little bit to make sure our community isn’t going to see an increase in taxes, and we’re doing everything we can to keep our district as strong as we can,” LeRoy said. “We’re pleased with where we’re going with our kids’ achievement, and we’re going to try and hold on to that. We don’t want to lose it.”

Rachel Ohm — 612-2368

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Twitter: @rachel_ohm