CAPE ELIZABETH — While a large variable remains in the form of state funding, the town and school fiscal 2014 budgets propose a combined tax increase of 3.5 percent.
On Wednesday night, School Board members presented their $22.5 million school budget to the Town Council, highlighted by state revenue losses and the impact of implementation of a pilot full-day kindergarten program.
The council was expected set the public hearing schedule for the school and town budget discussions Thursday night.
The largest budget increase for the School Department is the loss of about $300,000 to cover the department in the event that the state pulls much of its teacher retirement funding, an unprecedented plan Gov. Paul LePage has proposed in the state’s biennial budget.
That move would shift retirement costs from the state to local school districts, although it’s still unclear exactly what the local share would be because the state has not released its formulation.
“I wish we had all the answers,” Superintendent Meredith Nadeau said Wednesday night, noting that talks with legislators have failed to provide a clear forecast. “They say it’s probably not going to be decided until the 11th hour.”
Without Cape Elizabeth paying for teacher retirement the budget increase would be 2.1 percent.
After the budget was presented by the board, councilors directed much of their attention to the proposal for a full-day kindergarten program at Pond Cove Elementary School. Only half-day kindergarten is now offered.
“There’s never a perfect time for a new program to be added,” Nadeau said, “but for long-term investment, we decided it was worth it.”
According to Nadeau, school departments that have a full-day kindergarten programs see a three-to-one return on investment, in terms of spending less money to remediate children later in their education.
The budget proposes the conversion of two of the existing half-day kindergarten sections to full-day using existing staff and space within the kindergarten section of the school.
She said while kindergarten enrollment is expected to hover around 35 students in the foreseeable future, the program could eventually expand and may need additional funding. The hope is that early childhood education creates savings by reducing the need for other services.
The pilot program will have space for 3o students, who will be selected through a lottery system, if necessary, Nadeau said.
Despite socioeconomics playing a key role in educational success, Nadeau said students from poor backgrounds will not receive preference in the lottery over students who come from more affluent families.
Board member Michael Moore said a pilot is planned, instead of immediately jumping into a full program, because the department wants to have an assessment period.
“We’d rather do it well and learn (through a pilot program),” he said. “From a tactical standpoint, logistically, we need some time. to do that.”
The board also increased funding for a contingency account by $40,000 to $140,000, to soften the blow if state curtailments continue and help avoid a more dramatic tax increase in future budget years.
The increased contingency fund will also replace reserve account funds, which the board used to supplement the budget against state cuts. This presents a risk, especially if the department has drastic unforeseen cuts in state aid.
If that happens, more serious action, such as borrowing or teacher layoffs, could be on the table, board members said in earlier budget discussions.
Another large expense in the school budget is a 2.2 percent increase in teacher salaries, based on a three-year contract and a projected enrollment increase of 26 students.
With the district facing about $10 million in improvements and maintenance in the next decade, according to a 2012 facilities study, the board budgeted another $151,000 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 median-priced home valued at $314,000 would be $143.
The town budget, which the council is expected to vote on April 29, assumes the Legislature will reject the elimination of municipal revenue sharing proposed by LePage. It accounts for $640,000, about an $8,000 increase from this year.
This could end up being an unbudgeted expense because it’s still unclear how lawmakers will react to the governor’s proposal.
The voter referendum on the council-adopted school budget will be held May 14.