CAPE ELIZABETH — Interim Superintendent of Schools Ken Murphy presented a fiscal year 2012 budget to the School Board Tuesday night that would increase property taxes 1.9 percent.

Murphy said he wants to help create a budget that reflects the current economic climate, maintains the resources needed to support a top-quality school system and is clear and simple to understand.

The $21 million proposed budget is an increase of 2.2 percent, or $448,000 more than this year’s budget. Owners of a median-priced, $254,000 home can expect a tax increase of $85 a year, Murphy said. 

Some of the major budget changes include a $406,000 increase for salaries and benefits; $82,000 more for heating oil and diesel fuel; $47,000 more for out-of-district tuition and a $188,000 loss in funds under the federal Individuals with Disabilities for Education Act. Other reductions include $925,000 in federal stimulus funds and $125,000 in Medicaid funds.

Although there are nearly $791,000 in expenditure increases, the board has $300,000 in contingency funds, $34,000 in debt service and $8,000 in other funds to help offset the increases.

Murphy said the budget increase was reduced by cutting 1.5 teaching jobs and a “very modest” salary agreement made with the teacher’s union.

He said the School Board will work to develop a three-year plan that will balance the need to keep tax increases as small as possible while providing students with quality programs.

“We tried to provide a recommended budget that is reflective of the economic conditions and one that maintains the programs that are so necessary to keep this a top quality school system,” he said. “There is work to be done, but this is a  good start.”

Murphy said the School Board will work on the budget over the next few weeks.

The board will meet Tuesday, March 8, following its regular business meeting at 7 p.m. at Town Hall and Tuesday, March 15, at 7 p.m. at the Community Center.

Amy Anderson can be reached at 781-3661 ext. 110 or aanderson@theforecaster.net