PORTLAND — The city Finance Committee is scheduled to vote Thursday on an $89.6 million school budget proposed for next year.

Finance Committee Chairman John Anton said this week he does not expect any major problems with the budget, although he questioned the School Board’s request to use city reserves to fund $480,000 of its spending request.

“They’ve put together a responsible budget,” Anton said.

He said the School Board has already been told by the council that the use of fund balance reserves is ultimately a decision for the council to make, because it belongs to the city. There is no school fund balance.

The city’s fund balance is more than $20 million, roughly 10.2 percent of the city’s overall spending. The undesignated fund balance is considered by bond rating firms and can affect interest rates for city borrowing. The city is trying to get its balance up to 12.5 percent.

The proposed school budget for fiscal year 2012 is smaller than the current budget, but because the schools expects to lose millions of dollars in state and federal funding, the local property tax rate would increase nearly 2.8 percent on the school side. Combined with the current city budget proposal of more than $200 million, the overall tax rate increase would be about 2.2 percent.

Anton said he would support an overall increase of 2 percent. He also suggested that if the council chooses not to fund the $480,000 request from the schools with fund balance, it could still decide to fully fund the school budget and instead look to make cuts on the city side.

The school budget includes elimination of 31.5 locally funded jobs, and 35.6 positions that were funded by grants.

The Finance Committee is scheduled to hold a public hearing and vote on a school budget recommendation for the full council Thursday at 5:30 p.m. at City Hall.

Kate Bucklin can be reached at 781-3661 ext. 106 or kbucklin@theforecaster.net. Follow her on Twitter: @katebucklin.

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