The Portland School District has a roughly $1.2 million surplus this year, despite pending layoffs of 49 people and deep cuts in next year’s budget.
Teachers, principals and department heads got the go-ahead late last month to spend the projected surplus on supplies and non-staff expenses, pre-buying for next year wherever possible.
Any unspent money cannot be carried over to next year’s budget and will go instead to the city’s unassigned general fund balance.
“If you walk into the (school) buildings, it’s like Christmas,” said Kathleen Casasa, president of the teachers union. “There are boxes everywhere. We haven’t seen this kind of flurry in a long time.” Casasa said the spike in available funds at the end of the year indicates poor budgeting, but the district’s chief financial officer said it’s standard operating procedure.
The union and district officials have been battling over next year’s budget cuts for months, with tensions running high as the district asks for financial concessions, such as teacher furlough days, that the union has so far rejected.
Casasa says the surplus shows the union is right to object. “There are options,” she said.
Last year the projected surplus was $1.6 million, and the district spent more than $1 million in the last months of the year. The remaining amount, $466,000, was sent to the city’s unassigned general fund balance.
“What I make sure of is that we don’t spend into the red,” said Chief Financial Officer Mike Wilson. “Some surplus is good because you want to build up the fund balance. It helps with credit.”
That reserve account is a major factor in determining the interest rate the city pays to borrow money.
Wilson said the district has had an annual surplus each year for several years, dating back to the calamitous $2.5 million deficit discovered in the 2007 school budget, which led to district resignations and an overhaul of district finances.
Generally speaking, he said, the pattern has been the same every year: Every July 1, at the beginning of the fiscal year, the superintendent freezes 40 percent of supply purchasing lines, to hold money back for unanticipated costs. The freeze is lifted in May after the district assesses the year’s spending.
Wilson said an email went out to department heads and principals in May, lifting the freeze and encouraging them to prepay for school supplies and even go slightly over their budgeted amount. Casasa said she got a call from a startled middle school librarian who’d “been told to spend $3,000 by tomorrow.” A glut of money at the end of the year is frustrating because teachers often spend their own money on supplies during the year when money is tight, she said.
She also said the extra money just proves the union was right to refuse in January when the district asked teachers to take furlough days this year to help offset $870,000 in unexpected cuts that Gov. Paul LePage announced in December. The across-the-board curtailment cuts are intended to address a $35.5 million state budget shortfall, including $12.6 million in cuts for Maine schools. Wilson said the curtailment was a good example of an unplanned expense, and the reason the budget should include some extra money as a cushion. There is no set goal for how big the surplus should be, he said.
Last year’s surplus of $1.6 million represented 1.8 percent of the total $89.5 million budget; this year’s surplus is about 1.3 percent of the $94.2 million budget.
“I think having over a million or so surplus is helpful,” Wilson said. “You should have some cushion in there.”
Noel K. Gallagher can be contacted at 791-6387 or at: [email protected] .