Jamie Caouette is the executive director of the Lewiston school district’s The Store Next Door, which provides services to homeless students. Prom dresses hang from the shower stalls in the girls’ bathroom. Districts across the state face hard choices as COVID-19 relief funding dwindles. Derek Davis/Staff Photographer

Lately, sleep has been hard to come by for Jamie Caouette, who runs a Lewiston public schools program that supports some of the district’s 250 homeless students.

Instead of getting some rest after long days working at the community center where students can take showers and do laundry, connect with support services or just stay safe and warm, Caouette has been staying up late into the night researching grants her program might be eligible to apply for. The Store Next Door, which has served thousands of students over 17 years, may lose funding in the face of an extremely challenging budget year.

Public schools across Maine and the country received a windfall of federal money to support students during the pandemic but are now struggling to fund integral programs and positions in the face of soon-to-expire COVID-19 aid, inflation pressures, increased needs of students and, for some, declining state funding.

Leaders of Maine’s K-12 school districts are drawing up budgets for the 2023-24 school year. The combination of growing expenses and the impending loss of federal funds means they are bracing for lean times by asking for significant budget increases and proposing cuts to positions and programs for the 2023-24 school year.

Over the past few years, the federal government handed down almost $190 billion to states to support education during the pandemic, more than three times the annual federal spending on K-12 education. The Maine Department of Education received more than $1 billion in federal COVID-19 funding to help schools reopen, stay open and support students during the pandemic.

Districts have wide latitude to spend the money as they see fit and have used it to give educators bonuses, raise salaries, pay for tutors and mental health specialists, buy technology, run extracurricular programming and more. But soon that money will be gone. Schools districts have a little more than $300 million left to spend, and they must allocate all federal COVID-19 money by fall 2024 and spend those funds by early 2025.

At the same time, districts are facing rising prices for energy and other basic expenses, staff shortages, increased student needs and, in some cases, reduced state funding resulting from shifting enrollments and property valuations.

Georgetown University education finance expert Marguerite Roza called the situation facing K-12 school districts in Maine and around the nation a “perfect storm of financial pressures.”

The boys bathroom has showers and laundry machines at Lewiston school district’s The Store Next Door, which provides services to homeless students. The district is considering cutting two of four staff positions. Derek Davis/Staff Photographer

School district leaders said they hope that by starting to cut services and increase budgets this year, they will have to take less-drastic measures next year, cushioning the fall off the COVID-19 funding cliff and the blow to taxpayers. But even with these moves, school district leaders are anticipating a hard road ahead.

“I think the next two years are going to be tremendously challenging,” said Sarah Lentz, Portland’s school board chair. “We have decreased funding and increased need. Everyone is worried.”

The Portland school district’s budget for the 2023-24 school year calls for an $8.2 million, or 6%, increase over this year’s $133.1 million budget, which would require a 7% increase in the school portion of the city’s tax rate. At the same time, it is proposing a 5% reduction in all non-salary budget items and cuts to staffing and summer programs.

School district budgets around the state look similar, with propositions of steep tax increases and cuts to programs, services and staff positions.

Towns and cities are expected to see the effects of similar financial pressures in municipal budgets that support non-education services including police and fire departments and public works. Local officials will roll out these proposals in the coming weeks and could add to the sticker shock facing taxpayers.

The Auburn school district is considering a 7.2% tax increase and may cut almost 25 positions and four high school sports teams. The Brunswick school district has proposed a 6.6% property tax increase and cuts to funding for teachers, education technicians and multilingual support staff. The Lewiston school district is considering slashing more than 50 positions.

“We’re trying to find a way to be fiscally responsible to our community and our tax base and provide the very best we can to the kids in our schools,” Lewiston Superintendent Jake Langlais said. “But I am concerned about being able to provide everything we want to and should provide to Lewiston students. If we cut further, we start to compromise our ability to provide necessary services.”

But deeper cuts are likely in the years to come for school districts as they grapple with compounding financial pressures.

To balance budgets over the next few years, districts across the country likely will have to implement layoffs and hiring freezes, forgo pay raises, cut programs and maybe even close schools, said Roza, who runs Georgetown University’s education finance and policy research center, the Edunomics Lab.

“It’s really going to be quite destabilizing for school districts,” she said.

The best way for districts to prepare, Roza said, is for them to communicate clearly and early on about the financial pressures coming down the pike.

“It’s the last year before stuff hits the fan,” Roza said. “Districts could spend all year looking away from the problem and covering their ears, but that will make things worse next year.”

As soon as the Portland school district wraps up this budget season, it plans to immediately begin preparing for the next one, board chair Lentz said.

“We’re going to start talking deeply about major structural shifts,” she said. Increasing class sizes; consolidating schools; reconfiguring the district’s transportation programs; and cutting athletics, co-curriculars and staff positions likely will all be on the table, she said.

“We’re trying to be very clear that any cut or reduction is not because we don’t value those people or programs – it’s because we have to make those cuts in order to maintain our budget,” Lentz said. “This year is really tough. It’s going to be even tougher next year.”

School districts around the state are struggling, but some, including Portland and Lewiston, say they are in a particularly difficult position because of a decrease in their share of state funding.

Both districts saw a drop in their state subsidies this year and anticipate the same next year. They say those decreases in state funding are difficult to withstand amid other financial pressures and high student need.

The state decides how much money to give a school district by first calculating the cost of providing education to a certain population and then calculating the ability of a community to contribute to that cost, a number that is based largely off property values. Because property values in Lewiston and Portland have gone up, state money for education has gone down.

The Portland school district is expecting a $2.4 million decline in state funding; Lewiston expects a decline of $1.3 million for the 2023-24 school year.

Leaders of the state’s two largest school districts said that while they understand why there is a tie between property values and local contribution, pushing the bill to local taxpayers is difficult in districts like theirs that service significant numbers of economically disadvantaged and multilingual students who require increased services.

Jamie Caouette and Joel Morse of the Lewiston school district’s The Store Next Door, which provides services to homeless students. Budget cuts may target the program. Derek Davis/Staff Photographer

Caouette has been working in The Store Next Door in Lewiston for 15 years. She’s always been concerned about funding but said her program has never been on the chopping block before.

The Store Next Door is on a list of teacher and education technician positions, maintenance projects, special education funding, student and staff support programs and administrative positions that could be cut in the next school year. It’s not clear what exactly those cuts would entail for The Store Next Door, but Caouette said the program is already struggling to serve all of its students with its current resources.

Regardless of any cuts, Caouette said she’s willing to do whatever it takes to keep the center open.

“We’re just going to keep on pushing because we know how important this is for our kids and our community,” she said.

The name of the program, The Store Next Door, falls short of explaining all it does. Housed in the basement of the district’s adult education building, one room is filled with neatly organized racks of clothes, shoes and bags – everything from winter coats to summer dresses. In cabinets on the wall are shelves lined with toothbrushes, tampons, deodorant, nail polish and makeup.

Supplies at the Lewiston school district’s The Store Next Door. Derek Davis/Staff Photographer

Down the hall there is a community space with modern-looking blue and green furniture where students can do their homework and hang out. Farther inside are two bathrooms – one for boys and one for girls – each with eight showers, two washers, two dryers and a table where students can fold their clothes.

Students also go to the center to get help with homework or to meet with caseworkers and mental health professionals.

Caouette is in the process of getting lockers so the students, many of whom don’t have a space of their own outside of school, can store their belongings. Often, she said, students show up to school with a bag of everything they own and store it in her office for the day.

Langlais, Lewiston’s superintendent, like other school officials, said he recognizes that almost all the items being proposed for cuts are valuable to the school district, but that it’s clear something has to give.

Cutting from school budgets is particularly challenging because districts are labor-intensive institutions, so trimming budgets often means getting rid of staff. Most school districts in Maine spend around 80% of their budgets on salaries and benefits, with the rest going toward debt service, facilities and maintenance and transportation.

Despite the concerning financial outlook and challenges ahead, Maine School Management Association Executive Director Steven Bailey said he’s confident districts will be able to make things work.

“Maine’s superintendents are excellent managers of funds and have all sorts of strategies to provide the best opportunities possible for their school districts,” Bailey said. “They are very innovative and opportunistic.”

Creating budgets for the next few years will be all about prioritizing, Bailey said: Figuring out what needs can be deferred, what programs should take precedence over another, and how to be responsible to the taxpayer and meet the needs of students.

“I’ve been in the business a long time,” Bailey said. “There’s always a need for resources. Right now there is greater concern than usual, but we will figure it out.”

While district leaders are concerned about providing appropriate services to their students, others are worried about the impact of rising school budgets on taxpayers and community members.

At a recent Portland school board meeting, resident Ann Roderick urged the district to do everything it can to keep taxes low.

“I’m in finance and accounting – been there for 40 years. So I know what it’s like when you have choices to make in terms of making a budget,” she said. “My concern is as a taxpayer. We can’t have a tax increase. People can’t afford it.”

Nick Murray, director of policy with the Maine Policy Institute, said he’s worried homeowners and other community members around the state are not expecting to see the sort of tax increases that may be coming and will struggle to pay higher taxes amid inflation, high oil costs and other financial pressures.

“It’s not just homeowners either,” Murray said. “Renters will ultimately have to pay the property taxes reflected. When taxes go up, it hits everybody.”

While individual school districts often must respond to big changes in their revenues, this is the first time that most, if not all, districts across the country are experiencing a simultaneous drop in funding, Roza said. Revenue sources are usually pretty steady, she said, but with the pandemic aid and its abrupt end, districts are now in more of a boom-bust cycle.

“A whole bunch of money went to districts, but now that’s ending and they’re also recovering from other financial shocks,” Roza said. “It’s going to be a financial moment like we’ve never seen before.”