Old Town cuts $740,000 from schools

OLD TOWN – In the wake of the Legislature passing a bill to reduce the city of Old Town’s state valuation as a result of the recent closure of the Georgia-Pacific Corp. mill, the school board voted Wednesday to reduce its budget by $740,000.

While this round of school budget cuts isn’t related to the mill shutdown, there are more reductions to come as a result of the lost tax revenue from the mill closing, officials said.

The mill provided 34 percent of the city’s tax base, and the bill that was passed by the House and Senate on Wednesday is designed to reduce the state valuation for the city.

The legislation increases the amount of money Old Town receives through the State Municipal Revenue Sharing program and decreases by a like amount the distribution to other municipalities.

“We won’t know what that means in terms of dollars and cents to the city of Old Town or to the schools until the value of the mill is determined,” Superintendent David Walker said at Wednesday’s meeting. He noted that the mill value may be known by the end of this week or early next week.

The Department of Education has estimated that, based on the 2005 state valuation, this legislation may increase the amount of General Purpose Aid for Local Schools subsidy that Old Town receives by between $532,000 and about $1 million for the next fiscal year, according to the state’s Web site.

“Hopefully, before we take further action, we’ll know what that revenue picture might be adjusted to look like,” Walker said.

Meanwhile, the board Wednesday night directed Walker to meet with administrators to begin cutting an additional $168,000 from the school budget.

“These are not great times, but they’re temporary in nature,” Walker said.

The budget process this year hasn’t been an easy one for the school department.

In addition to the mill closure, the department has seen a reduction in tuition students, a 30 percent increase in heating and electrical costs, and additional increases in salary and benefits.

With last month’s announcement that the Old Town mill was shutting down, city and school officials now are sharing the burden of reducing their budgets by $1.5 million to make up for the loss in tax revenue from the mill.

Even if a buyer for the facility is found, it isn’t expected to operate at 100 percent capacity or be worth what it was at the time it closed.

Initially, the board was looking at a gross budget of $14.5 million to continue programs and make some improvements to technology and the early childhood education offerings.

The increase would have meant a net appropriation increase to the city of $1.5 million.

After several budget workshops and meetings, the board decreased that figure, resulting in the $740,000 in cuts that members approved Wednesday.

The lengthy list of cuts included reductions in personnel at all schools, as well as stipends for the key, pep and chess clubs.

School board members Donna Conary and Liane Judd were the only two who voted against the first set of cuts the board voted on, which dealt with eliminating positions.

Judd stated after the meeting that her vote was to publicly acknowledge “that this is tough.” It was not a statement against the administration or the superintendent, she said.

“We don’t want to do it, [but] we know we have to do it,” Judd said.