FALMOUTH — The School Board on Tuesday unanimously agreed to put unexpected state education aid toward reducing the property tax rate and replenishing the School Department’s reserve.
The special morning meeting was spent discussing how best to use nearly $522,000 in new state aid. The board had initially proposed using all of the windfall to replenish an undesignated fund balance and capital reserve fund.
But after discussions two weeks ago with the Town Council, the board, with member Clare Harrington absent, agreed Tuesday on what several members called a “goodwill gesture” for taxpayers.
The board agreed to put $110,000 towards reducing the mil rate, which would mean a five-cent reduction in taxes per $1,000 of assessed value, to $11.03. Another $150,000 will go to the capital reserve, which School Department Finance Director Dan O’Shea said would bring that reserve up to about $90,000. The remaining funds would be put towards replenishing the unassigned fund balance.
The unassigned fund balance was reduced to about $595,000 in June, according to O’Shea, which is around 1.8 percent of the nearly $33.2 million budget. The capital reserve was over $50,000 “in the red,” according to O’Shea.
The replenished unassigned fund balance will be available for projects in the next school year. In previous years, the board had used unassigned funds to reduce the mil rate, a practice which has been called unsustainable.
The capital reserve is for specific projects, although there currently are none.
Superintendent of Schools Geoff Bruno said the department is “comfortable with” the compromise.
Board member Caryn Bickerstaff, who initially called for all of the funds to be put into the reserves, said using some of the funds towards tax reduction comes with a stipulation that the board will not use the unassigned fund balance for that cause again.
Other board members said they were on the fence about the decision, and saw reasons to keep all the money for the schools and to use some for the tax rate reduction. While most said they were leaning toward keeping all the funds in the department, they ultimately voted to use a portion for tax relief.
“I certainly see we could use the comfort of having all of it in the funds, but I can see the validation of a goodwill gesture,” board member Cindy Han said. She added that if the board could stay within its comfort zone and create that gesture, “it would pay off.”
Board member Josh Barrett said while he did not oppose the tax reduction, there are several places the funds could be used. He said the board developed its budget, which voters overwhelmingly supported on June 9, “based on needs, not wants.”
The budget increase of nearly 4.7 percent passed by a margin of 4-1 and required a 64-cent increase in the school portion of the property tax rate to $11.08 per $1,000 of assessed value.
Board member Dee Conroy-Vella called for a smaller portion of the new state aid to be used toward the mil rate. She said a 2.5-cent reduction per $1,000 of assessed value, or $55,000, would be “respectful to the town.”
Member Danielle Tracy expressed concerns that the gesture wouldn’t be remembered by the voters, and said it would be more meaningful to wait until the next budget cycle.
Chairwoman Lucy Tucker said while artificially keeping the mil rate low is not sustainable, the board is “extremely sensitive to those on fixed incomes.”
“Sometimes a gesture can go a long way,” she added.
Because there will be an impact on the tax rate, the School Board’s decision will have to return to the Town Council for ratification at its Aug. 10 meeting. Councilors, however, will not be able to change the board’s decision.
The Falmouth School Board on Tuesday morning, Aug. 4, at Town Hall, where members unanimously decided to put unanticipated state education funding towards tax relief and replenishing School Department fund balances.