Tough budget decisions looming

By Joseph Cyr
Staff Writer
    HOULTON — The SAD 29 school board got its first look at potential budget figures Monday evening, and while the picture painted was not exactly rosy, it could have been far worse, according to the district’s superintendent.
    Since the state budget has yet to be finalized, SAD 29 Superintendent Stephen Fitzpatrick informed board members that the figures he had will be subject to change, but one thing is for certain, the district will receive less money from the state for its 2010-11 school budget come July 1.
    Fitzpatrick presented the initial financial figures at a special budget workshop with the school board that also featured about 15 members of the public. The final state aid figures will not be released until late March.
    Neighboring school systems to the north could be facing massive reductions in state aid for education, but the cuts for SAD 29 may not be as deep.
    The preliminary state figures, which were revised on Feb. 1, reveal SAD 29 would receive $192,490.75 less in state aid for its next school budget. In comparison, SAD 70 is facing a cut of $312,866, while RSU 39 (Caribou) is looking at a reduction of $638,435. SAD 1 (Presque Isle) could be facing a reduction of $701,157.
    “We are in a lot better shape than I anticipated,” Fitzpatrick said. “I originally told our staff that I expected a $500,000 reduction.”
    Adding to the reductions, each school district may be required to raise additional local money in order to receive its amount of state aid.
    Fitzpatrick said that while the district may be able to absorb the reduction with minimal impact this year, the same may not hold true for the 2011-12 fiscal year. The impact is also predicated on the school board passing a flat-funded budget at the same level as the current fiscal budget.
    “I’m more worried about the FY 2011-12,” he said. “I think we can mediate this budget. We have reduced our expenditures significantly in the current year, so that our balance [forward] is higher than in year’s past.”
    By using money from its undesignated fund balance to bridge the gap in the coming budget, the impact could be greatly reduced, Fitzpatrick said. Each year, the district has been able to carry forward unspent money from one budget to the next by limiting the amount it spends in some areas. Last year, SAD 29 took $94,463 from its undesignated fund to help balance its budget. This year, the district could be looking at using as much as $194,000, but even then some cuts may have to be made.
    The undesignated fund balance, which can be as much as 3 percent of the overall budget, is intended to be used for unexpected expenses, such as a replacing a furnace or roof repairs. The money can also be used to balance a budget. For SAD 29, that 3 percent figure amounts to about $337,000.
    However, by using taking so much from its “reserve” account, the district could also be setting itself up for major reductions in its 2011-12 school budget.
    “Any time you offset a budget with carryover, or take money from an undesignated fund balance, you are reducing your flexibility,” Fitzpatrick said.
    School districts have been scrambling since late 2009 when the state announced it would be cutting back its funding for education in an effort to bridge a massive deficit in the state budget. In November, Governor John Baldacci issued a curtailment order that sought a $38 million reduction in educational funding. In December, a supplemental budget for 2010 and 2011 that also seeks an additional $35 million reduction in 2011.
     The SAD 29 board could also look at reductions in staffing or programs, if it so chooses, to help bridge the anticipated deficit when it formally begins its budget process. That process will begin in earnest around the end of February, first of March, Fitzpatrick said.
    The SAD 29 board meets in full on Monday, March 1 at 6 p.m. in the Superintendent’s Conference Room.