CAPE ELIZABETH — Town and school officials unveiled their proposed budgets last week, both acknowledging the considerable unknowns in the proposed state biennial budget.

The school budget, a $22.5 million spending plan, will rely on sharing resources to maintain the current level of education and services, said Superintendent Meredith Nadeau.

The proposed budget increases spending by $712,621, or 3.3 percent, from this year’s $21.8 million budget.

About half of that increase, $300,000, is in anticipation of the state shifting teacher retirement costs to local districts in the latest biennial budget. This is a new cost to school districts; in previous years, the state has funded 100 percent of teacher retirement costs.

The School Department will likely see an increase of about $191,000 in general purpose aid next year, up from the $2 million allocated this year, but still less than anticipated.

Nadeau said the teacher retirement cost shift estimates come from a spreadsheet handed down by the state, but noted that it’s still not clear how much local districts will ultimately end up paying.

“We won’t know how the dust will settle for quite a while,” she said, adding that currently the department will have to make up about $110,000 between teacher retirement and general purpose aid.

Other larger costs this year include a 2.2 percent increase in teacher salaries, based on a three-year contract with the department and a projected enrollment increase of 26 students. Another $151,000 has been budgeted for capital improvements.

The proposed state budget funds only $2.9 million of the department’s budget, leaving $19.6 million to be raised through taxes. The projected increase in property taxes for a $314,000 home in Cape Elizabeth would be $129, according to budget figures.

Some budget risks are being taken to make up for the nearly $200,000 state curtailment announced in December last year and an additional $200,000 lost due to changes in Medicaid laws.

The holes in the budget are being plugged by $350,000 in undesignated fund balances – unspent money from the previous year – that will be carried over from the current year. The balance in that account is $650,000, Nadeau said, although the annual carry-over is usually $250,000.

“This means we have less in the reserve moving forward. It’s certainly a risk in the short-term,” she said. “Long-term, if we continue to see funding decline and new costs like the teacher retirement added to our budget, we won’t have other places to draw from.”

Town budget

Town Manager Mike McGovern has proposed a $9 million budget for the town.

The largest increase in spending come from costs to make up previous years of underfunding the per-diem daytime rescue personnel and an increase of $100,000 in for capital needs.

Proposed spending is up 2.4 percent from this year, or $213,708, reflected in an estimated tax increase of 2.1 percent, or about $22 for a $300,000 home in Cape Elizabeth.

“It’s a pretty clear-cut budget in terms of issues and needs.” McGovern said. “There’s no new positions, no new programs. Basically, we’re trying to maintain the current level of service and be responsive to the issues that are out there.”

The budget assumes the Legislature will reject the elimination of municipal revenue sharing proposed by Gov. Paul LePage’s budget, which would account for $640,000, about an $8,000 increase from this year.

McGovern said the chances of all municipal revenue sharing being eliminated is slim after the budget gets through the Legislature, but that the state’s budget still remains a big question.

Personnel account for 50 percent of town expenses, or $4.5 million, followed by professional and contractual services at about $1 million, $906,703 in debt service and $800,000 for capital needs.

While property taxes account for 64 percent of the town’s budget, according to the budget, the town anticipates increased revenue from other taxes, including the excise tax. Other revenue sources, such as fees and use of surplus and revenue from the state, are expected to remain stable.

The $800,000 for capital needs includes $295,000 for road, paving and drainage improvements, as well as for upgrades to the Town Hall electrical system and a replacement for the town’s 1997 backhoe loader. Those items were budgeted $110,000 each, with a myriad of items accounting for the remainder.

Although snow removal this year ran up more overtime than in an average winter, McGovern said the budget can absorb those costs.

“I don’t lose any sleep over the snow budget,” he said. “It’s important and citizens expect that when they get up in the morning, the roads are going to be passable. It does cost a little bit of money.”

Combined spending proposals from local, state, county and Community Services is about $33.2 million, an increase of 3.1 percent, or 52 cents more than the current year.

The next school budget workshop is at 6:30 p.m., Tuesday, March 19, in the Cape Elizabeth High School library. The budget is expected to be adopted by the School Board March 26 and a citizen vote on the council adopted school budget is scheduled for May 14.

The first of the Town Council Finance Committee workshops begin at 7 p.m., Thursday, March 14, at Town Hall.

Will Graff can be reached at 781-3661 ext. 123 or wgraff@theforecaster.net. Follow him on Twitter: @W_C_Graff.