I’ve been getting a lot of email about the school budget this year. Some people are expressing concern that the Council is making deep cuts that will be detrimental to education, while others are concerned that the Superintendent’s proposed budget is too high and that the increased spending will cause them to be taxed out of their homes.
Below are the most common concerns I’m hearing, addressed in a Q&A format. I want to thank Councilors Kim Cook and Justin Costa for their contributions to the answers. They both allowed me to lift large chunks of text from emails they’ve been sending to help explain the budget process to their constituents, and for that I am grateful.
Below are the most common concerns I’m hearing, addressed in a Q&A format. I want to thank Councilors Kim Cook and Justin Costa for their contributions to the answers. They both allowed me to lift large chunks of text from emails they’ve been sending to help explain the budget process to their constituents, and for that I am grateful.
Here are the questions/topics that will be addressed. You can read the article straight through or skip to the sections that interest you most.
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Why are members of the City Council voting to cut education funding?
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Is $110 million enough? The superintendent proposed $113 million, and the School Board recommended $111.8 million. I heard that if we go with anything less than the $111.8 million, Kindergarten classrooms will need to have 25 students in them and world languages, the arts, and other electives will have to be eliminated.
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What things wouldn’t be included in this year’s school budget if the school board were to follow the recommendations that were made at the Council’s Finance Committee meeting?
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Look. I just want more funding for schools, and I don’t understand why we can’t achieve that—especially when the city seems to be raking in the dough from all this new development. What gives?
- I'm willing to pay higher taxes to fund education. Why can't we just do this?
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Why isn’t the City Council looking at the municipal side of the budget with the same level of scrutiny?
- Is it possible to end this post on a positive note?
Why are members of the City Council voting to cut education funding?
The idea that councilors are voting to cut education is one of those “alternative facts” we’ve heard so much about lately. No one is proposing that we cut education funding. Here’s the deal.
Last year's school budget was $105 million. The budget proposed for this year by the City Council’s Finance Committee, and which appears to have significant council support, is $110 million. That figure maintains past funding levels for all programs currently funded by local taxes, fully covers all wage increases and benefits costs for faculty, fully covers all current contracted services, and adds an additional million dollars on top of that.
This represents a 4.6% budget increase over last year, which is a fairly large increase. For comparison’s sake, the Police Department’s budget is slated to increase by 2.3%, the Fire Department’s by 0.3%, and the Library’s by 3.0%. And of course, the overall municipal budget, which includes the aforementioned departments along with everything from Public Health to Public Works—and a whole lot in between—is set to increase 2.7%.
Last year's school budget was $105 million. The budget proposed for this year by the City Council’s Finance Committee, and which appears to have significant council support, is $110 million. That figure maintains past funding levels for all programs currently funded by local taxes, fully covers all wage increases and benefits costs for faculty, fully covers all current contracted services, and adds an additional million dollars on top of that.
This represents a 4.6% budget increase over last year, which is a fairly large increase. For comparison’s sake, the Police Department’s budget is slated to increase by 2.3%, the Fire Department’s by 0.3%, and the Library’s by 3.0%. And of course, the overall municipal budget, which includes the aforementioned departments along with everything from Public Health to Public Works—and a whole lot in between—is set to increase 2.7%.
Is $110 million enough? The superintendent proposed $113 million, and the School Board recommended $111.8 million. I heard that if we go with anything less than the $111.8 million, Kindergarten classrooms will need to have 25 students in them and world languages, the arts, and other electives will have to be eliminated.
Ultimately, the School Board decides how their funding is allocated. All the City Council can do is approve a total amount of funding. From there, it is completely up to the school board to determine how that money is spent.
However, at the City Council’s Finance Committee meeting on Wednesday, May 9th, former School Board Finance Chair (and current City Councilor) Justin Costa walked through how the school board could get to a 4.6% budget increase in a way that:
These are all items that were allegedly on the chopping block, but as was demonstrated at the Council’s Finance Committee meeting, they needn’t be. And the recommendations made by Councilor Costa would still allow the School Board to add a new social worker position at Riverton, provide new student and teacher laptops, include stipends for teacher leaders and special education building coordinators, and provide for a new half-year teacher sabbatical—all of which were among the Superintendent’s priorities for investments this year.
It’s worth noting here that Councilor Costa has been a strong advocate for Portland schools for years, and that his experience on the School Board, which included chairing the School Board Finance Committee, coupled with his service on the City Council—where he also serves on the Finance Committee—has provided him with a rare depth of knowledge and understanding of both the school and city budgets.
However, at the City Council’s Finance Committee meeting on Wednesday, May 9th, former School Board Finance Chair (and current City Councilor) Justin Costa walked through how the school board could get to a 4.6% budget increase in a way that:
- avoids any high school reductions;
- doesn't reduce elementary teaching positions;
- doesn't touch middle school electives or teachers;
- preserves elementary world languages;
- keeps the island schools open;
- keeps Presumpscot open;
- allows Deering to keep its JMG (Jobs for Maine's Graduates) position;
- allows the schools to fund their "Make It Happen" Coordinator through the general fund; and
- preserves some other smaller items like CBHS "Model Costs" which had been grant funded, and Adult Ed transfers to the Street Academy.
These are all items that were allegedly on the chopping block, but as was demonstrated at the Council’s Finance Committee meeting, they needn’t be. And the recommendations made by Councilor Costa would still allow the School Board to add a new social worker position at Riverton, provide new student and teacher laptops, include stipends for teacher leaders and special education building coordinators, and provide for a new half-year teacher sabbatical—all of which were among the Superintendent’s priorities for investments this year.
It’s worth noting here that Councilor Costa has been a strong advocate for Portland schools for years, and that his experience on the School Board, which included chairing the School Board Finance Committee, coupled with his service on the City Council—where he also serves on the Finance Committee—has provided him with a rare depth of knowledge and understanding of both the school and city budgets.
What things wouldn’t be included in this year’s school budget if the school board were to follow the recommendations that were made at the Council’s Finance Committee meeting?
Again, the School Board makes all decisions about how to spend educational funding, but the recommendations that were made at the Council’s Finance Committee meeting focused on eliminating proposed items that are not currently in the school’s general fund budget: some new positions, some that have been funded by grants in the past, and a $100,000 reduction in the amount of the increase for supplies (bringing the total supplies budget to $4,324,008, up from $4,147,425 in last year’s budget—an increase of $176,583).
Also included in the recommendations were two of the Superintendent’s suggested methods for reducing the amount of the proposed budget increase: eliminating a new two-day, $183,000 summer planning institute, and reducing the number of student days from 178 to 176, which would reduce the proposed budget increase by another $230,000. (So the total savings from these two measures would be $413,000.)
Of course, if the School Board doesn't want to follow these recommendations (which would keep all programming currently funded by property tax revenues intact and accomplish all of those bullet points in the previous answer), they don’t have to. If, for instance, the School Board decided not to reduce the number of student days, they could find other ways to save that $230,000. The School Board has a $175,000 contingency fund which hasn’t been expended in past years, so that amount could be reduced to find some additional savings. But that’s just one possible idea, and it is ultimately up to the School Board to make these decisions.
What is clear, however, after going through this process, is that it was never necessary to consider—or to put out to the public—the idea that elementary or middle school teachers, school resource officers, or the arts would be eliminated, or that the island schools would need to be closed.
Also included in the recommendations were two of the Superintendent’s suggested methods for reducing the amount of the proposed budget increase: eliminating a new two-day, $183,000 summer planning institute, and reducing the number of student days from 178 to 176, which would reduce the proposed budget increase by another $230,000. (So the total savings from these two measures would be $413,000.)
Of course, if the School Board doesn't want to follow these recommendations (which would keep all programming currently funded by property tax revenues intact and accomplish all of those bullet points in the previous answer), they don’t have to. If, for instance, the School Board decided not to reduce the number of student days, they could find other ways to save that $230,000. The School Board has a $175,000 contingency fund which hasn’t been expended in past years, so that amount could be reduced to find some additional savings. But that’s just one possible idea, and it is ultimately up to the School Board to make these decisions.
What is clear, however, after going through this process, is that it was never necessary to consider—or to put out to the public—the idea that elementary or middle school teachers, school resource officers, or the arts would be eliminated, or that the island schools would need to be closed.
Look. I just want more funding for schools, and I don’t understand why we can’t achieve that—especially when the city seems to be raking in the dough from all this new development. What gives?
Fair enough. Yes, Portland is bringing in a fair amount of money in the form of new property taxes. This year’s budget shows that the value of property in Portland has gone up by about $100 million. That means that Portland will collect an additional $1,133,000 in property taxes. Sounds great, right?
It is. Because that $1,133,000 helps to offset some of the increased costs we are facing in this year’s budget.
First off, the tax that we are required to pay to the County (all cities and towns pay a tax to their respective counties for services), has increased by $381,000 this year.
Second, back in 2001, the city refinanced its unfunded pension liability through a $111 million bond in order to ensure it could meet its obligations to its employees. We still have nine more years of payments to make in order to pay off the debt service on that bond. This year, the amount we must pay has increased by $872,000, and our annual payment amount will continue to increase by $1 million dollars each year going forward until 2026. (More on this below.)
So just with those two increases—the $381k increase in the county tax and the $872k increase in bond debt service, you can see we’ve already eaten through the bulk of our increased property tax revenue.
But those aren’t the only increases we’re seeing this year. We also have increases to city employees’ wages and benefits: health insurance costs are expected to rise by $2 million dollars in this budget year, and our contractually obligated union compensation increases come to around $3.2 million.
So all that new tax money? Yeah. It doesn’t even begin to cover these increases. Unfortunately, while it may seem like we’re swimming in money, we’re not.
On the bright side, this new property tax income from new development does reduce the amount of money we need to raise by increasing property taxes, and that’s a definite plus. Our tax increases for the past few years—and this year—would be higher without this additional tax revenue.
Now, back to that pension obligation bond debt service.
Did you catch the part about it going up by about a million dollars every year until 2026? That’s not a typo. And yes, it does mean that in 2026, we will have a final payment to make of about $23 million dollars. All at once.
This final payment, and all the payments leading up to it, weigh heavily on the minds of everyone who has any involvement in the municipal budget process, and it is something we have to remain cognizant of as we make budget decisions today.
The good news, of course, is that come 2027, we’re going to feel like a homeowner who has finally managed to pay off a hefty mortgage, three new-car loans, and a boatload of student debt. But 2027 is still a long way off.
As for finding more funding for schools, we are—at the local level. That’s why this year’s school budget is set to increase by 4.6%. Unfortunately, while the municipality is pulling its weight and then some, funding at the state level has decreased, especially for communities like Portland. Why? Because the state has looked at our property values, which, as you know, keep going up—and going up faster than many other communities in Maine—and decided that we don’t need as much state funding.
That’s not the case, of course, but essentially, the way the school funding formula works, when a community appears prosperous on paper due to its property values, it gets less funding. And that’s part of the reason that this has proved to be a very challenging budget year.
Unfortunately, the challenge will only worsen over the next five years if we are not successful in convincing our state legislators to change the school funding formula or otherwise provide more funding for our schools. At the same time, it will also be important for the School Board to take a deep dive into the whole district—as they have committed to do in the coming year—to see how and where they might find ways to make the system more sustainable in the long run.
It is. Because that $1,133,000 helps to offset some of the increased costs we are facing in this year’s budget.
First off, the tax that we are required to pay to the County (all cities and towns pay a tax to their respective counties for services), has increased by $381,000 this year.
Second, back in 2001, the city refinanced its unfunded pension liability through a $111 million bond in order to ensure it could meet its obligations to its employees. We still have nine more years of payments to make in order to pay off the debt service on that bond. This year, the amount we must pay has increased by $872,000, and our annual payment amount will continue to increase by $1 million dollars each year going forward until 2026. (More on this below.)
So just with those two increases—the $381k increase in the county tax and the $872k increase in bond debt service, you can see we’ve already eaten through the bulk of our increased property tax revenue.
But those aren’t the only increases we’re seeing this year. We also have increases to city employees’ wages and benefits: health insurance costs are expected to rise by $2 million dollars in this budget year, and our contractually obligated union compensation increases come to around $3.2 million.
So all that new tax money? Yeah. It doesn’t even begin to cover these increases. Unfortunately, while it may seem like we’re swimming in money, we’re not.
On the bright side, this new property tax income from new development does reduce the amount of money we need to raise by increasing property taxes, and that’s a definite plus. Our tax increases for the past few years—and this year—would be higher without this additional tax revenue.
Now, back to that pension obligation bond debt service.
Did you catch the part about it going up by about a million dollars every year until 2026? That’s not a typo. And yes, it does mean that in 2026, we will have a final payment to make of about $23 million dollars. All at once.
This final payment, and all the payments leading up to it, weigh heavily on the minds of everyone who has any involvement in the municipal budget process, and it is something we have to remain cognizant of as we make budget decisions today.
The good news, of course, is that come 2027, we’re going to feel like a homeowner who has finally managed to pay off a hefty mortgage, three new-car loans, and a boatload of student debt. But 2027 is still a long way off.
As for finding more funding for schools, we are—at the local level. That’s why this year’s school budget is set to increase by 4.6%. Unfortunately, while the municipality is pulling its weight and then some, funding at the state level has decreased, especially for communities like Portland. Why? Because the state has looked at our property values, which, as you know, keep going up—and going up faster than many other communities in Maine—and decided that we don’t need as much state funding.
That’s not the case, of course, but essentially, the way the school funding formula works, when a community appears prosperous on paper due to its property values, it gets less funding. And that’s part of the reason that this has proved to be a very challenging budget year.
Unfortunately, the challenge will only worsen over the next five years if we are not successful in convincing our state legislators to change the school funding formula or otherwise provide more funding for our schools. At the same time, it will also be important for the School Board to take a deep dive into the whole district—as they have committed to do in the coming year—to see how and where they might find ways to make the system more sustainable in the long run.
I'm willing to pay higher taxes to fund education. Why can't we just do this?
Under the current state school funding formula, the Superintendent’s projected budgets over the next 5 years would result in a 37% increase in the school side of the municipal budget. This increase would amount to a $1,000 tax increase on the average home in Portland as compared to today—and that’s just the increase that would be required to pay for the school portion of the municipal budget. The total tax increase would be higher.
While there are people who’ve said they’re fine with this increase and happy to pay more for education, not everyone who lives in Portland is fortunate enough to be in that position.
If we want Portland to remain a diverse city, we need to keep in mind people from all socioeconomic backgrounds as we make budgeting decisions.
While there are people who’ve said they’re fine with this increase and happy to pay more for education, not everyone who lives in Portland is fortunate enough to be in that position.
- There are many people, such as seniors who pay their property taxes in lump sums to the city (they have paid off their mortgages), who are facing decisions as to whether they will fill their prescriptions or pay their property tax bills when they come due.
- There are people who live on fixed incomes whose Cost of Living Adjustments do not go up as quickly as their property taxes, and so every year they are having to do without something new in order to make ends meet.
- And there are families who, with these tax increases, would be prompted to move to a community like Falmouth or Cape Elizabeth, where the taxes are lower and the schools are known to be good—or to a community further afield, where both housing and taxes might be more affordable.
If we want Portland to remain a diverse city, we need to keep in mind people from all socioeconomic backgrounds as we make budgeting decisions.
Why isn’t the City Council looking at the municipal side of the budget with the same level of scrutiny?
We are.
For months now, the councilors on the Finance Committee (along with the other councilors who have been attending their meetings) have been going through the municipal budget department by department, asking questions and hearing explanations as to why certain positions have been added or eliminated, how revenues and expenditures are changing, and what is happening with our Enterprise Funds and debt service accounts.
Of course, the big difference on the municipal side is that the City Manager brought forward a budget that was within the Council’s guidance with regard to property taxes and kept the municipal budget tax rate increase to 2.6%. The Superintendent of Schools, on the other hand, brought forward a budget with a tax rate increase that was nearly 3.5 times larger than last year’s. (Last year, the school budget tax rate increase was 2.7%; this year, the Superintendent proposed a 9.3% tax rate increase.)
The City Manager’s proposed budget is a net reduction of 13 full time employees over this year’s budget while the Superintendent’s budget and even the School Board’s budget include an increase in employees.
Given the projections for continued losses in state funding, plus the significant increase in debt service payments for elementary school renovations and additions to the new Hall School that are coming, this does not appear to be the right time to add additional positions or expenses into the school budget that have not previously been paid for by general fund revenues (i.e., property taxes).
For months now, the councilors on the Finance Committee (along with the other councilors who have been attending their meetings) have been going through the municipal budget department by department, asking questions and hearing explanations as to why certain positions have been added or eliminated, how revenues and expenditures are changing, and what is happening with our Enterprise Funds and debt service accounts.
Of course, the big difference on the municipal side is that the City Manager brought forward a budget that was within the Council’s guidance with regard to property taxes and kept the municipal budget tax rate increase to 2.6%. The Superintendent of Schools, on the other hand, brought forward a budget with a tax rate increase that was nearly 3.5 times larger than last year’s. (Last year, the school budget tax rate increase was 2.7%; this year, the Superintendent proposed a 9.3% tax rate increase.)
The City Manager’s proposed budget is a net reduction of 13 full time employees over this year’s budget while the Superintendent’s budget and even the School Board’s budget include an increase in employees.
Given the projections for continued losses in state funding, plus the significant increase in debt service payments for elementary school renovations and additions to the new Hall School that are coming, this does not appear to be the right time to add additional positions or expenses into the school budget that have not previously been paid for by general fund revenues (i.e., property taxes).
Is it possible to end this post on a positive note?
Yes.
We have great schools. We know this to be true. A large part of the Superintendent and School Board’s presentation to the Finance Committee and Council focused on how well our students are performing; how engaged and committed our teachers are; and how inclusive and welcoming our schools have become.
And no one wants to cut education funding. Indeed, between the eighteen members of the School Board and the City Council, every last individual is in favor of increasing the school budget, which means that we can continue to offer high quality education and programs, just as we do this year.
And by keeping the overall combined tax rate increase under 4%, we will be appropriately funding our schools along with other core city services, while maintaining a level of affordability for families and seniors in Portland.
We have great schools. We know this to be true. A large part of the Superintendent and School Board’s presentation to the Finance Committee and Council focused on how well our students are performing; how engaged and committed our teachers are; and how inclusive and welcoming our schools have become.
And no one wants to cut education funding. Indeed, between the eighteen members of the School Board and the City Council, every last individual is in favor of increasing the school budget, which means that we can continue to offer high quality education and programs, just as we do this year.
And by keeping the overall combined tax rate increase under 4%, we will be appropriately funding our schools along with other core city services, while maintaining a level of affordability for families and seniors in Portland.
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