PORTLAND – The City Council will be asked to take a calculated gamble on Monday when it considers sending a $96.4 million school budget to voters on May 14.

The council’s Finance Committee voted 3-1 Thursday to trim $1.6 million from the school board’s budget request, recommending that the full council back a school budget that ignores a state proposal to shift some of the cost of teacher pensions to municipalities, and reduces the projected impact of a charter school expected to open in Portland this fall.

Finance Committee members described their proposal as a best-case-scenario budget. The worst case would occur if the proposed pension changes survive state budget deliberations in the Legislature, creating a need for additional school budget referendums or deeper spending cuts.

The council sets the bottom line for school spending, but does not have line-item control. The Board of Public Education made cuts of its own before endorsing a budget of $98 million.

The budget before councilors Monday would increase the schools’ share of the property tax rate by 3 percent, from $9.57 to $9.86, adding about $60 a year to the tax bill of a home with an assessed value of $200,000. That’s down from the previously proposed increase of 3.7 percent.

The city budget, which includes county taxes, is also factored into the property tax rate and is still being deliberated.

City Councilor John Anton, who chairs the Finance Committee, voted against the school budget.

Even though it ignores potential state cuts, the budget would still increase taxes by 3 percent, he said, while still eliminating roughly 49 full-time positions.

Teachers, meanwhile, are slated to receive $1.7 million in raises next year – the last year of a three-year contract.

“I can’t reconcile that,” Anton said after the meeting. “I think management and labor need to come up with a better outcome.”

School officials have been meeting with three unions in an effort to find savings. So far, the largest union, the Portland Education Association, which represents more than 600 teachers, has not been willing to re-open its contract.

PEA President Kathleen Casasa said in an interview Wednesday that she has provided the school district a list potential savings that would not affect the teachers’ contract, but no agreements have been reached.

The school budget endorsed by the Finance Committee assumes a proposed $1.3 million shift in pension costs to the school district will not be approved by the Legislature. That’s a strategy similar to City Manager Mark Rees’ city budget, which ignores roughly $10 million in potential state cuts.

The school budget also assumes a minimal impact from the opening of the Baxter Academy for Technology and Science, a charter school that could siphon students and state funding from public schools.

The school board budgeted a $300,000 revenue loss for charter schools, but the budget recommended by the Finance Committee predicts losses of $110,000 — roughly the cost of seven students.

The budget also shifts $85,000 in costs for three new school buses from the school budget to the city’s capital budget.

Ignoring potential state cuts carries a risk of having to have another budget referendum once the state budget is finalized, or making deeper cuts once the fiscal year has started.

If the state budget increases local school costs, the school board and council will have to present a new budget to voters in another city-wide referendum, according to city attorney Danielle West-Chuhta.

It costs roughly $18,000 to hold a school budget referendum, city officials have said.

“I don’t think I am averse to going back to referendum,” said City Councilor Jill Duson, who serves on the Finance Committee.

Mayor Michael Brennan, however, believes the city could figure out a way to pay for any increased costs passed down from the state without going back out to referendum — a position that has put him at odds with a city and a school attorney.

If voters reject additional increases or the council chooses not to go back out to referendum, schools would be forced to make deeper budget cuts.

According to an analysis by Mike Wilson, the school’s chief finance officer, the district would have to cut an additional 24.6 positions if the state budget passes with the pension changes.

The school board’s chairman, Jaimey Caron, said after the meeting that the $98 million budget would have given the district more flexibility and would not have required subsequent referendums.

However, Caron acknowledged the city’s concerns over how the schools planned to pay for some additional costs — particularly the school’s use of $1.3 million in surplus funds, which could increase the city’s borrowing costs.

“We’re all trying to figure out what the state is going to do,” Caron said. “There are no easy options.”

 

Randy Billings can be contacted at 791-6346 or at:

rbillings@mainetoday.com

Twitter: @randybillings