GORHAM – With the first payment coming due on a new school and stimulus money dried up, the Gorham School Department budget likely will be rising by nearly $1 million.

The budget proposed by Superintendent Ted Sharp indicates spending $31.3 million, up $917,807 from the $30.4 million for the present fiscal year ending June 30. The local Gorham share to support the proposed budget is nearly $500,000 more than the one passed last year.

The latest state subsidy figures for Gorham’s proposed budget are projected to rise about $1 million. At the same time, the first payment of more than $1.7 million is coming due on Great Falls Elementary School, now under construction. Also, the School Department won’t have $755,079 in federal stimulus funds to bolster revenue.

Proposed reductions in the budget include cutting 3.3 full-time equivalent positions equaling $198,000 and hacking $308,000 in discretionary spending.

The Gorham School Committee will review the budget with Sharp on Saturday, March 5, in a day-long budget workshop in a conference room at Gorham Municipal Center, 75 South St. The budget requires approval from the School Committee, Town Council and Gorham voters in a referendum likely to be held on Tuesday, June 7.

Released early, a letter dated March 5 from Sharp to School Committee members said his proposed budget includes principal and interest payments of $1,710,399 on the Great Falls Elementary School.

In a workshop meeting last week with the School Committee, staff and school administrators, Sharp said that until the state enacts a budget, state subsidy figures could change. But, Sharp was optimistic about his budget.

“We don’t think it’s a bad picture,” Sharp said.

In the latest figures that Sharp received from the Maine Department of Education on Feb. 16, the state’s general purpose aid subsidy for Gorham increases from $16.3 million to $17.3 million, up $1 million.

David Connerty-Marin, a spokesman for the Maine Department of Education, said last week that Gorham would be one of the few school districts that is receiving an increase under current figures in state subsidy this year. As reasons, he cited the increase in debt service for the elementary school, no enrollment decline and a 3 percent decrease in value of Gorham property.

Sharp’s proposed budget would up the tax burden on Gorham taxpayers by 13 cents per $1,000 of valuation based on an expectation that Gorham’s property tax base would increase by $1 million.

The 13-cent rise would hike property taxes $26 on a home valued at $200,000. The amount needed from local taxpayers increases $486,972, from $12.8 million a year ago to $13.3 million.

Gorham voters were asked in a referendum on Sept. 16, 2008, whether to approve up to $25.8 million to construct, equip and buy land for the new school. The measure also asked Gorham taxpayers to be responsible for paying $2.5 million of the school costs not covered by the state.

Both the Town Council and School Committee recommended voters approve the new school.

Those voting favored the new school 1,059-179, according to the town’s website. The 1,238 ballots cast represented 10.8 percent of registered Gorham voters.

With debt still remaining for the Gorham High School rebuild in the mid-1990s and construction of Gorham Middle School that opened in 2003, the new elementary school increases the debt service, rising from $3 million in the current budget to nearly $4 million, up 29.2 percent, in the proposed budget.

“We have an increase in debt service payments of approximately $890,000 due to the increased obligation from the principal payments on the new elementary school,” Dennis Libby, chairman of the School Committee, told the Town Council earlier this month.

While Sharp’s proposed budget would cut the equivalent of 3.3 full-time positions, Hollis Cobb, School Department finance officer, said officials “won’t really know how many people will actually lose a job until we receive notice of retirements and/or resignations. This information likely will not be known until much later in the spring (May/June).”

Plans call for the $21 million Great Falls Elementary School under construction at 73 Justice Way off Sebago Lake Road to open in September with grades kindergarten through 5. The new building replaces the antiquated and overcrowded White Rock School and restructures classes at Narragansett and Village elementary schools to also house kindergarten through Grade 5.

Norm Justice, Gorham facilities director and owner’s representative for the school construction, said Tuesday he’s satisfied with construction progress. He said drywall has been installed and painted in classrooms. Justice said major pieces of the mechanical systems have been installed and permanent electrical power would likely be installed next week. “That’s a big milestone,” Justice said.

Overall, Justice said, construction is on schedule with the building opening when school commences next fall. “We’re counting on it,” Justice said.

Opening a new school presents budgeting problems.

“Development of the FY12 budget has been especially challenging as we prepare to open school in the fall with our new K-5 configuration. The implications of this new configuration affect debt service, utilities and per pupil expenditures due to enrollment changes at each of the K-5 schools,” Sharp said in his March 5 letter.

Gorham school officials will grapple March 5 with a proposed $31.3 million budget that includes $1.7 million in debt payments due this year on Great Falls Elementary School, which is now under construction. Staff photo by Robert Lowell