$12M SAD 29 budget will require tax hike

By Joseph Cyr
Staff Writer
    HOULTON — The location for Wednesday’s district budget hearing for the proposed 2011-12 SAD 29 school budget has been changed. Originally scheduled at Houlton Southside School, the meeting will now take place at Houlton High School cafeteria at 6 p.m.
    Copies of the district budget will be available at the hearing and can also be found online at www.sad29.k12.me.us/
    According to Interim Superintendent Ray Freve, who turns over his administrative duties to Mike Hammer on June 21, there will be a short presentation on the budget, followed by an open question-and-answer session with the public.
    At $12,081,048, the gross budget is up about 2 percent from last year’s figure of $11,854,185. However, the impact to local municipalities of Houlton, Littleton, Monticello and Hammond Plantation will be far greater than 2 percent.
    According to Freve, SAD 29 will receive $8,471,791 in state funds for the 2011-12 school year. That figure is up $139,701 from the $8,332,090 it received this past year. However, in order to get that full amount of state funding, the district needs to come up with $2,806,479, which is an increase of $372,849 over last year’s figure.
    To determine each town’s share of the $2,806,479, a formula based on each town’s valuation — as determined by the state — was used. Valuations for all four communities were increased over last year’s figures.
    As presented, residents of Houlton will be required to come up with the lion’s share of the budget at $2,075,953. That figure represents an increase of 16 percent from the previous year. Littleton’s share is $386,172 (14.3 percent increase), while Monticello’s share is $297,206 (11.01 percent increase); and Hammond’s share is $47,149 (18.84 percent increase).
    The average increase in local tax dollars is 15.32 percent. The district has made numerous cuts while putting its budget together, however, total spending is up.
    Freve said he was uncertain what type of turnout there would be for the budget hearing.
    “I don’t try to guess turnouts because 95 percent of the time I am wrong,” he said. “I think history, in the past few years, [attendance at] the budget meeting has not been as great as the referendum.”
    Last year, only a handful of residents turned out for the budget hearing and only two individuals asked questions. That budget, however, featured no increase in tax dollars.
    At Monday night’s Town Council meeting, several councilors urged Houlton residents to vote “No” on the SAD 29 budget during their councilor’s comments portion of the meeting. Several councilors claimed the school budget would result in a 1 mil increase to Houlton’s taxes. If that were to happen, a home assessed at $100,000 would see a $100 increase in their tax bill.
    “An increase of that size is something virtually impossible for us [as a town] to compensate for by reducing our own budget,” Houlton Town Manager Doug Hazlett said. “It’s a sizeable enough increase that it will have an impact on the mil rate. That is impossible to avoid. It’s important for all of the voters to go to the public hearing and educate themselves as much as they can and vote from an educated, knowledgeable standpoint.”
    Several councilors had much stronger words for the public.
    “The school budget is the single largest line item in the Houlton town budget,” said councilor Sue Tortello. “Last year, school costs represented 37.1 percent of our tax bills. Houlton’s required share is 16 percent more than last year. These are challenging times for our town. Houlton is getting squeezed from both sides.”
    Councilor Mike Jenkins took a much stronger approach in addressing the public.
    “I think it’s wrong to sit on $2.4 million in surplus of taxpayers dollars and passing it on to the town at a time when everyone is trying to hold the mil rate down,” Jenkins said. “At the election, I would urge everyone to vote ‘No.’”
    Jenkins added he appreciated the work done by the school board, but felt more could have been done.
    “They cut positions, but then added in programs,” he said. “The school board has worked long and hard on the budget, putting in an awful lot of hours. Just because I may not agree with their final proposal, doesn’t mean we should not thank them for all the hard work they put in. I encourage people to be educated, but I will not vote for a mil rate increase for the town of Houlton.”
    According to Freve, the district had $2.4 million in its undesignated fund balance as of June 2010.
    “Taking money from that surplus is being used to sustain what we have and maybe add a little bit more,” Freve said. “If the board were to use all of that $2.4 million, it still wouldn’t defray the budget. The entire tax burden lays in what the state says we have to raise. If we were to decrease the budget, it would have no impact on the local [tax] cost, because in order for us to get the $8.4 million from the state, we have to raise $2.8 million.”
    Last year, the district had to raise $2.4 million in local tax dollars in order to receive $8.3 million from the state.
    Freve said the district could choose to not raise the full amount of the required local share, but cautioned against such a measure. By a special act of Legislation last year, school districts in the state could choose to raise only 82.2 percent of their required local share this year and still get a full 100 percent in funds from the state. However, according to Freve, that simply puts off an increase for one year as that extra percent would then need to be made up the following year.
    “The question is, if you do that, what is going to happen next year?” Freve asked. “It’s going to catch up to you eventually. You are only postponing it. If the state, next year says you have to go back to the 100 percent level, you have to make up the percentage you postponed. I think that would be an extremely dangerous thing for Houlton to do.”
    SAD 29 board member Fred Grant sent an e-mail to members of the town council and the town manager on Tuesday morning. He also sent a copy to the Houlton Pioneer Times. In that e-mail, Grant explained some of the misconceptions he felt were being circulated about the school budget.
    “The state will only give the district the funds it promises, if the towns pay the full amount of the ‘Required Local Funds,’” Grant wrote. “If you decrease your ‘Required Local’ dollars, the state will reduce the amount of state funding the district receives by the same amount — dollar for dollar.”
    Grant also touched on the 82 percent option.
    “The only time it makes sense to do this [option] is if you know you will have no increase or a small increase to the Required Local Share for the upcoming year,” he said. “In this one instance, this option allows you to share this year’s increase over two years. Unfortunately, the Required Local assessment for the [2012-13] school year looks like it will feature another big increase.”