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03/15/2017 12:00 AMAfter two nights of public debate, on March 13 the Board of Finance (BOF) elected to reduce the overall budget by $200,000 and make cuts to revenue in anticipation of a reduction in state funding. The total fiscal year 2017/2018 budget now comes to $95,188,169, an increase of $1,752,486 or 1.88 percent in spending.
The $200,000 cut was split as a $80,000 cut to the town budget and a $120,000 cut to the Board of Education (BOE) budget. The BOE operating budget with the reduction is now $58,650,136, an increase of $743,345 or 1.28 percent in spending.
The town operating budget is now $28,658,999, a $586,320 or 2.09 increase in spending. Debt service for the coming fiscal year remains the same at $7,879,034, an increase of 5.67 percent over last year.
All of the BOF members acknowledged that both the town and BOE brought forward responsible, lean budgets, but said some cuts needed to be made to correspond to anticipated cuts to revenue. The town and BOE will get to decide where to make the cuts in their respective operating budgets
Superintendent of Schools Dr. Paul Freeman said the BOE, which shoulders the larger portion of the cut, will pay close attention to retirements, medical contributions, and maintenance cost. Freeman said savings in these areas would minimize possible effects on students, but not eliminate them.
“It wouldn’t be classroom size increases,” he said. “It would be those continued maintenance pieces of classroom spaces and it would limit our ability to hire experienced teachers.”
The bigger point of contention for the BOF was where to set the revenue projection for the next fiscal year in light of the proposed reduction in aid from the state. In the governor’s proposed budget, municipalities would see a redistribution of state aid and would be required to pick up one-third of the state’s teacher pensions, which municipalities have never previously had to fund. For Guilford, that would mean a reduction of close to $2.2 million in state aid and a pension contribution of approximately $2.9 million.
Guilford will not know how much it stands to lose from the state until June, well after Guilford votes the budget, meaning the cuts to revenue will have to be estimates.
BOF Chair Matt Hoey said, “Lets not kid ourselves—we are guessing. That is really what this is about.”
The final guess was a 35 percent reduction in the Education Cost Sharing (ECS) grant, which the state uses to help municipalities run their schools. In the current year, Guilford was expected to receive $2.9 million in ECS funds and in the next fiscal year, under the governor’s proposal, Guilford wouldn’t receive any funding.
BOF members said the governor’s proposal, including the teacher pension component, is unlikely to hold and opted to assume a cut to rather than a complete reduction in ECS dollars. A 35 percent cut to ECS would bring the projected grant amount for next year to $1,892,955, a roughly $1 million assumed reduction in revenue.
Combining the revenue projection and the total budget, the tax increase comes to 2.44 percent or an increase of 0.70 mills.
Board members discussed numerous revenue reduction levels. BOF member Ken MacKenzie said he wanted to see a bigger cut to revenue and both operating budgets.
“If we are wrong on our revenue assumptions, I think it would be sad and unfortunate to make cuts that might require headcount reductions,” he said. “We don’t want to upset programs and people’s lives.”
Town officials have previously said they have no appetite for sending out supplemental tax bills if the governor’s cuts are deeper than anticipated. If the worst should happen, Hoey said the board will go back and look at the operating budgets and one-time funding sources.
“Once we use a one time funding source we have to find a way to make it up in subsequent years,” he said. “I think it is a combination of things we would have to look at.”