m-statebudget-011609 Towns brace for reduced state funding (drop) Revenue-sharing cut, school funding frozen

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When Gov. John Baldacci released his lean biennial state budget of $6.1 billion last week, he called for all to do their part to help the state weather an economic recession not seen in a generation.
While some may have interpreted Baldacci’s statement to be directed at employees of state agencies, town officials say the governor’s spending package may ultimately be shouldered by taxpayers.
As presented, the budget seeks to compensate for a $330 million decline in state revenues in part by cutting 10 percent from state-municipal revenue sharing and freezing
already reduced allocations to public schools. Both moves will have the
largest impacts on Mid-Coast communities if the proposed budget is
The proposal is $200 million smaller than the current budget – a first since 1974. Baldacci’s spending plan has yet to be adopted by the state Legislature.
However, the proposal’s effects are already causing heartburn for local officials, who claim the impact of the lost revenue could be felt mostly by property taxpayers.
The 10 percent reduction in revenue sharing will have significant impacts in Bath, Brunswick and Topsham, which estimate a combined loss of $380,000. Brunswick, which budgeted $2 million from revenue sharing, would be the biggest loser at $200,000. Bath would lose $100,000 and Topsham would be out $80,000.
According to Town Administrator Kristi Eiane, Harpswell would lose $16,000.
Although temporary, town officials are frustrated by the potential reductions, which could be coupled with two citizen-initiated proposals, the so-called TABOR 2 initiative and a plan to halve municipal revenues received from motor vehicle excise taxes.
Bath City Manager Bill Giroux said that although Baldacci is
proposing cuts to avoid tax increases, “what he’s
forcing municipalities to do is either cut services or increase
property taxes.”
“I never get any calls from taxpayers saying ‘please cut
services,’ Giroux added.
Giroux said municipal governments have been cutting expenditures for years because of tax caps.
“And what it leaves – the kind of services
that are left to cut – are things like police, fire, snow plowing,” he said. “Those are very difficult things to cut.”
Interim Town Manager Gary Brown said Brunswick is unlikely to make up for the proposed cuts with other revenues, leaving the town potentially facing a 3 percent property tax increase before it even begins budget deliberations.
Topsham Town Manager Jim Ashe said reductions in revenues will make it difficult to cut already trimmed expenditures.
“It’s either positions or entire services,” he added. “But I’ve got
faith. We’ll work together with the Finance Committee and the board (of
selectmen), and we’ll come up with something for the town to react to.”
Ashe will unveil Topsham’s draft fiscal 2010 budget to the Board of Selectmen in a workshop scheduled for Feb. 12.
The freeze in school spending is not new, but administrators say its duration will have lasting effects.
Brunswick Superintendent Paul Perzanoski said his school district is facing losses of about $1.3 million in state aid over the next three years. Perzanoski was hopeful that reductions in student population and staff attrition due to the closing of Brunswick Naval Air Station would get the district through next year.
However, by 2010, Perzanoski said all the “tricks in the magician’s hat are gone.”
“I understand these are difficult times,” he said. “But there will have to be some tough decisions down the road: Does the community want to pay more taxes or do they expect us to cut programs and personnel over the next year to accommodate for these losses?”
Perzanoski added that the state has yet to follow through on its promise to fund 55 percent of public education. Coupled with the federal government’s failure to live up to promises to fund 40 percent of special education – a promise made in 1975 – school districts everywhere are hurting.
Districts could get some help if Congress enacts President-elect Barack Obama’s proposed stimulus package, which would enact federal special education funding in accordance with the 1975 law.
Until then, local school districts will bear the brunt of Augusta’s crisis.
In its current fiscal 2009 budget, SAD 75 initially lost more than
$636,000 in state subsidies, along with $305,000 in Medicaid
reimbursement from the federal government.
SAD 75 Superintendent Michael Wilhelm said the
result was a total loss of $941,000. The state last November also cut an additional
$293,000 in subsidy to SAD 75.
Like Brunswick, SAD 75 should also see a decline in enrollment because of BNAS closure.
“Our population is going
down,” Wilhelm said, “so just through the natural course of things we’ll
probably see less money (from the state).”
Regional School Unit 1 Superintendent William Shuttleworth said he expects that
next year’s budget will be the toughest he has had to put together in
his professional life.
Shuttleworth said he isn’t sure how Baldacci’s budget could affect his school district, but he predicted RSU 1’s state subsidy would be cut by $400,000, the same as a
reduction announced about midway through the current fiscal
year. He expects additional cuts, too.
“All things considered, I think it is a dark economic forecast and
schools will have to bear the brunt of it because such a big portion
of the budget is education,” Shuttleworth said.
An initial cut in subsidy to RSU 1 of $1 million presented enough of a
challenge last year as the fledgling unit shaped its first-ever fiscal
2009 budget.
“This next round of cuts, if we have another million …
or three-quarters of a million, that’s going to be very difficult
work,” Shuttleworth said, “because our enrollment hasn’t decreased, so
it’s not like you need fewer teachers. You have contracts in place,
which is … 80 percent of your budget.”
There is a lot of work ahead for the school board, administration and
staff, he explained. “Most everybody thinks, well, just lower the
thermostat by a degree,” Shuttleworth said, pointing out that only one
cent out of every dollar goes toward all the school district’s athletic
programs, while only seven cents go toward maintaining, repairing and
heating 10 schools.
“The bulk is people,” he said. “We’re in the people business … when
you’re talking about $1 million, you’re not talking about setting the
thermostat down by a degree, you’re talking about reducing staff by
large numbers.”

Alex Lear contributed to this report. Steve Mistler can be reached at 373-9060 ext. 123 or smistler@theforecaster.net.