2015-07-17 / Front Page

City’s school funding in flux

By Duke Harrington
Staff Writer

SOUTH PORTLAND — The fate of almost $1 million in state aid for public education, about half of which could be funneled into property tax relief, is up in the air in South Portland following the failure of the school board to vote Monday on distribution of the funds.

The $6.3 billion biennial budget adopted by the state Legislature over the veto of Gov. Paul LePage June 24 allocated an extra $20 million to general purpose aid for education. Of that, South Portland got $884,204 more than anticipated when, on June 9, voters approved the school department’s $46 million operating budget for the current fiscal year.

The plan — as recommended by interim Superintendent Kathy Germani — was for $484,000 of the windfall to go back to the city, to be used for property tax relief. Because the school department is limited to spending only what voters approved at the June 9 budget validation vote, the remaining $400,000 in new money from the state would have gone into a reserve account, to be applied toward next year’s school budget.

“Our school buses are getting old and our technology will need some money in the near future. This could go toward that, or to help out on the high school bond. All of that will be decided next year when we do the new budget,” school board Chairman Richard Matthews said on Tuesday. “It's a matter of, we want to help the taxpayers of South Portland, but we also may want to set some of that money aside.”

According to City Finance Director Greg L’Heureux, the anticipated influx of cash could help to lower the tax rate.

Also contributing to lower than expected tax bills are a $50,000 increase in general assistance funding (again driven by the state budget), annual growth of $19 million in the city’s tax base (due to new development and increased property values), and annual fluctuations in Business Equipment Tax Exemption and homestead exemption filings (both of which automatically adjust the tax rate as state subsidies roll in).

L’Heureux said Monday that if the school board ultimately acts on Germani’s recommendation to return $484,000 to the city from the state subsidy increase, that, combined with the other recent budget changes, would lower the annual tax increase from the 3.4 percent previously estimated, down to 1.75 percent.

That would lower the city’s new tax rate from earlier projections of $17.73 per $1,000 of assessed value, to $17.40 per $1,000.

In other words, the median single-family home in South Portland, assessed at $200,000, was facing a tax increase of $126, for a new property tax bill of $3,546. That would fall to an increase of $60 and a new tax bill of $3,480.

With taxes for the 2015-2016 fiscal year due to be committed July 15, the plan had been for the school board to vote on its recommendation to the council Monday, then for the council to finalize distribution of the state subsidy increase at a special meeting Wednesday.

However, following an hour-long workshop session prior to its regular meeting, the school board voted 4-2 to table its vote.

Or, in the words of City Councilor Patti Smith, it “punted.”

That punt prompted a repurposing of meetings, with Wednesday’s planned council session becoming a joint workshop between the council and the school board.

Wednesday’s meeting was scheduled to take place after deadline for this week’s Sentry.

“A couple of board members would like to talk to the council,” Matthews said, explaining the decision to table the vote.

However, when Matthews requested the delay at Monday’s school board meeting, several directors seemed nonplussed.

“Can I ask you why you want to do that?” asked school board member Sara Goldberg.

“I feel at this time we are not prepared to move forward on these items and I feel we need to have more discussion,” Matthews said. “Right at the moment we have a lot to work out and I feel taking this and rushing this process is probably not the best thing to do at this time.”

“(Is this) in the best interests of the school system, or the best interests of the city?” school board member James Gilboy asked.

“I think both,” Matthews said. “Our job is to look out for the children, but it’s also to look out for the taxpayers of South Portland.”

Gilboy and Goldberg voted against tabling the vote.

According to school board member Richard Carter, Monday’s board workshop was to have been given over largely to iPad training for the directors. However, the session came to be dominated instead by debate over allocation of the subsidy increase.

“I’m thinking it was a positive meeting,” Matthews said. “I think there were some members who felt more strongly than others about what should be done with the money. There was a general consensus that we ought to give some back, but disagreement over how much that should be.”

“I’m not sure we wouldn’t necessarily go along with the recommendation that was made, but we never wanted to make (a) big financial decision under the gun,” Carter said.

L’Heureux was at Monday’s school board meeting and, following the decision to not vote, crossed town from the high school to city hall to make a report to the council, which was simultaneously meeting in a workshop session.

The council’s original reaction was to schedule a joint workshop with the school board prior to the previously announced special council meeting on Wednesday.

Taxes in South Portland were due to be committed July 15. Given that the vendor who sends out tax bills for the city generally takes about a week to process the notices, haste was needed, L’Heureux said, in order to ensure residents have ample time to reflect on those bills before Aug. 21, when the first quarterly tax payment comes due.

However, many councilors echoed the concerns of Matthews, Carter and other school board members about rushing the process.

As originally envisioned, Wednesday’s schedule of events would have included a joint workshop of the city council and the school board at 6 p.m., followed by a brief meeting of the school board at 6:45 p.m. for it to make its official recommendation to the council on the distribution of funds. At that point, according to City Manager James Gailey, L’Heureux and school finance director Rafe Forland would have “huddled together” to hammer out the impact of that recommendation, allowing the council to make its ruling at the advertised meeting time of 7 p.m.

“It seems like a rather brief discussion for so much hooch on the table,” said City Councilor Claude Morgan. “Forgive me, but the brevity is a little worrisome. We’re being asked to make a very large decision on the razor’s edge.”

“I’m a little disappointed that it’s happening this way, as well,” Councilor Melissa Linscott agreed.

“I, too, am feeling a little pressured,” said Councilor Tom Blake. “I’m not real comfortable with how this has played out.”

In the end, councilors decided to put off a vote until their regular meeting on Monday, July 20. That would allow them to “have a good discussion,” with the school board, as Blake put it, “without being pressured.”

That prompted a word of caution from L’Heureux and a promise from Mayor Linda Cohen.

“Recognize that’s going to push back when the taxpayers receive their bills,” L’Heureux said.

“They will not be disappointed,” the mayor said.

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