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03/31/09
State school subsidy estimate for 2009-10 comes in $504,339 less than expected
The Cape Elizabeth School Department learned late last week that its state education subsidy is slated to drop more than 16 percent from this year's, instead of holding steady as school officials had hoped.
The annual spreadsheet of preliminary General Puprose Aid to Local Schools issued March 26 listed Cape Elizabeth's share as $2.6 million, $504,339 less than the $3 million allocated this year, and which had been budgeted by the School Department as revenue for 2009-2010.
The Town Council's Finance committee reviewed the school budget in a workshop meeting March 30. Following the workshop, the council set for public hearing a school budget of $20 million, up 1.1 percent over this year's school budget. This is a $163,500 drop from the 2009-10 budget adopted by the School Board earlier this month.
The hearing is scheduled for Monday, April 13, 2009, 7:30 p.m. in the Town Hall chamber.
The difference in overall school spending represents the amount of contingency in the proposed school budget exceeding last year’s $70,000.
In addition, it was the consensus of the Finance Committee, a committee of the whole council, to use $200,000 from the town's undesignated fund balance to help reduce the amount of the school budget that would come from taxation.
"These two actions reduced what could have been a 47-cent tax increase for schools down to 20 cents," said Town Manager Michael McGovern. "The overall potential tax increase was lowered from 38 cents to 11 cents. This is a reduction from a 2.2 percent potential with the new lower state school funding cut, to .6 percent."
The School Board will meet as its finance committee at 7:30 a.m. Monday, April 6, to formally discuss the funding shortfall and vote on a revised budget.
This is the third major change in the 2009-10 school budget proposal that has been presented to the board. The first budget, presented by Superintendent Alan Hawkins in February, called for a 2-percent spending increase, with an anticipated tax-rate increase of 50 cents, or 4.3 percent, for education. The first budget anticpated a $421,000 reduction in state aid to education.
At that time, Cape Elizabeth was facing an additional $421,000 curtailment in state aid for the current fiscal year. Also at that time, the Town Council had voted to use $200,000 from undesignated funds to help the School Department bridge the gap for this fiscal year (Click here for news article).
Later in the month, however, officials at the state Department of Education announced that funding from the federal stimulus package would be available for education. The 2008-09 curtailment was canceled, and Cape Elizabeth schools were advised to expect the same $3 million in general purpose aid to education as was allocated in the current fiscal year. A new budget, adopted by the School Board March 10, would have increased spending 1.93 percent over this year's, and increased taxes by 10 cents, or .77 percent over this year's rate for schools.
However, on Friday morning, March 27, Hawkins opened his e-mail to learn that Cape Elizabeth's estimated state allocation, as reported in the state's annual spreadsheet, would instead be $504,339 lower than this year. "They surprised us," Hawkins said in a telephone interview March 31.
He said the reason for the drop was that the town's state property valuation had shown an increase between July 1, 2007 and June 30, 2008; and, Cape Elizabeth's student population had dropped during 2008. "Probably up to two-thirds of the districts in the state took a loss," Hawkins said.
He added that the spreadsheet figures are only an estimate.
The Town Council vote to set the budget to public hearing was 4-2, with councilors Sara Lennon and David Sherman opposed. Their opposition was based on the language included in the motion, "The net to taxation amount shall not exceed the below amount and may be lowered following the public hearing." Councilor Penny Jordan was absent. After the public hearing, the Town Council is slated to approve the school, municipal, county and Community Services budget on April 30. A school budget validation election is scheduled for May 12, 2009.
More information, including copies of previously submitted school budgets, is available on this Web site.
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