PORTLAND – An $89,587,035 school budget that would cut spending for the second straight year raised few eyebrows among city councilors Monday night, except for about $280,000 that would come from the department’s undesignated fund balance.

The fund balance is usually left relatively untouched so the city can use it for unexpected expenses — rising fuel prices or an unanticipated, expensive repair, for example.

But School Committee Chairwoman Kate Snyder said this would be a “conservative, one-time use” to “help us smooth the edges” of the budget.

The 2011-12 budget would cut more than $350,000 in spending from the current year’s plan, yet would require a property tax increase of about 2.8 percent because of federal and state aid reductions.

Total spending would actually be $91.6 million, but Snyder said the additional $2 million is from a federal jobs program and the committee is keeping that account separate because that funding expires after this year.

Mayor Nicholas Mavodones said the fund-balance spending will likely raise questions from the council’s Finance Committee members, who will review the school budget this week. The full council will hold a public hearing and vote on the school budget on April 25. It will go to voters in a referendum on May 10.

Mavodones said bond rating firms like to see cities maintain a healthy fund balance so they can handle unexpected expenses without jeopardizing payments on bond issues. Better bond ratings allow cities to borrow at lower interest rates, saving money in the long run.

Snyder told the council that the budget was difficult this year because of cuts in federal and state aid. The committee also sought to renew some programs, such as foreign language classes for third-, fourth- and fifth-graders, that had been cut in recent years to minimize tax increases.

But the task was made a little easier because the new teachers’ contract calls for no cost-of-living or step-salary increases in the next budget year, saving about $800,000. The teachers’ union also agreed to extend the minimum time between step increases from three years to four, saving an additional $110,000 for the year beginning July 1.

The school district has also offered early-retirement incentives that are being accepted predominantly by teachers this year, Snyder said. Last year, more support staff took advantage of the incentives.

The incentives are expected to result in retirements in 43.1 locally funded positions and 35.6 grant-funded positions. The net savings, she said, would be $1.2 million.

Despite the spending cut — not counting the federal jobs money — passing the budget isn’t a given, Councilor Cheryl Leeman said.

Leeman noted that home foreclosures weren’t as prevalent in previous recessions but unemployment remains high. For example, she said she got a call from a couple this week who both lost their jobs recently, so the pressure to keep tax increases down remains strong.

“Any tax increase is going to have to be justified,” she said.

 Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

[email protected]

 


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