Sun, May 19, 2013

SAD 17 projects $1M budget gap with, $2M without tax hike

By Matt Hongoltz-Hetling
Feb 17, 2011 12:01 am

Why local school taxes must rise

State law essentially forces SAD 17 to raise local taxes, even if it doesn't want to.

That's because there is a provision in the laws governing state funding of education that links state funding with local funding.

For FY11, the district is raising $1.8 million less from local taxpayers than the state wants it to.

The $1.8 million, said Colpitts, represents "the amount of money that we would need to raise our tax burden by ... in order to be eligible to get the $18.6 million from the state."

The collision between reduced local taxes and state funding has not happened yet, because there is an exception written into the law, which allows the local taxpayers some leeway when the state doesn't come through with all of its funding.

"If the state failed to raise its full 100 percent share of EPS [Essential Programs and Services], then ... we can agree not to raise that much as well," said Colpitts. "That's what saved us."

However, this exception has a sunset clause. In two years, it will expire, which would leave the district with two tough choices: increase local taxes by an outlandish $3.4 million, or lose an additional $3 million from the state.

"We would lose about $3 million in state funding," said Colpitts. "So you would have to reduce our current budget by almost six and a half million dollars if that law remains as it is."

Colpitts asked the community to lobby legislators to extend the sunset clause.

"I would ask you to advocate among the legislators to see that we keep the proportional funding formula for a while longer," said Colpitts, "at least until the economy changes significantly."

Still, said Colpitts, leaving a large gap between local funding levels and state-required local funding levels opens the door to a possible disaster.

"We need to be cautious about underfunding the local share," he said. "We need to watch that gap, of how much we raise locally to how much the state expects us to raise locally to get that share.  ... It could hurt us significantly."

Colpitts and school representatives sat down with several local legislators to make the case for extending the sunset clause, and various other legislative issues.

Colpitts said that he found the legislators  to be responsive, but that the solution will take time.

"The legislators were sympathetic to the issues we raised and appeared to be willing to address the local share issues," said Colpitts. "However, the issue is unlikely to be addressed in this session and will most likely be raised as a bill in the next session."

Reps. Terry Hayes and Jim Hamper attended, as did Senator David Hastings, and representatives from Senators Snow and Collins. Colpitts also had a separate conversation with Rep. Tom Winsor.

Catch-22 for SAD 17 Photo:

BUDGET WOES — A projection of SAD17 funding, should tax rates remain flat. The bottom portion of each bar represents levels of state funding. The middle number on each bar is the amount of money raised through local taxation. The top amount is the difference between the actual amount raised locally, and what the state expects the district to raise locally. Under current laws, if the district does not raise local taxes to make up the difference, it will loose a significant chunk of state funding as well.


OXFORD HILLS — One year after laying off 36 staff and trimming $2.6 million from its budget, SAD 17 is looking at yet another huge budget deficit.

Options are limited, and scenarios are grim for both the school and taxpayers.

"You can see the conundrum we're in," Superintendent Rick Colpitts said during the February 7 board meeting. "'Taxpayers, please pay more money, and by the way, you'll get less service for it.' It seems like a very difficult pie to eat, and yet that is what we are facing."

The most recent budget projections show that even a significant tax increase to local taxpayers wouldn't make up for significant losses in state and federal funding.

Keeping local taxes flat will create a $2 million deficit, while increasing local taxes by five percent will reduce the deficit to $1.2 million.

"Even with a local increase, we're still going to need to reduce our budget by a million plus," said Colpitts. "That's just a fact. And I hate to be the first one to report it, but that's a fact."

The budget gap is created largely by a decline in state revenues of approximately $600,000, the end of $1.25 million in federal stimulus grant monies, and increases in fixed costs.

"We know that costs in fuel goes up, we know that the cost to heat our buildings goes up, we know that staff costs go up," said Colpitts.

Over the past four years, the state share of funding has gone down significantly, from 53 percent of the district's budget, to 48 percent of a smaller budget. The local share has increased from 42 percent to 48 percent over the same time period.

President Obama's jobs bill will help dull the pain by providing nearly $800,000 in funding to the school, but there is no scenario in which school services can be maintained.

"No matter what we ask our taxpayers for, it appears as though we are still going to have to cut significant monies from our budget," said Colpitts.

One bit of good news is that the gap between local property values and the statewide average is shrinking, which means that SAD 17 will capture a larger percentage of the state's education funding.

Right now, the impact on the district is unknown.

"How do you cut another million, as a district that cut $2.6 million the year before and lost 36 staffpersons in the process?" said Colpitts. "It was devastating. ... We don't know. We're doing the best we can."

One response in the district has been to consider a single, combined bus run for students of all ages, a move that Colpitts said could save an estimated $400,000.

Assuming that the budget can't be balanced, administrators within the district say that staffing at the high school would be reviewed, as last year's staff cuts were primarily focused on elementary schools.

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