OLD TOWN – “Which is the chicken, which is the egg?” school board member Lianne Judd asked at Thursday night’s joint City Council-school board budget workshop.

She was referring to the discussion that echoed throughout the evening about where cuts should be made to make up for the lost tax revenue from the Georgia-Pacific Corp. mill’s recent closure.

G-P announced in March it was closing the Old Town facility, and, because of lost tax revenue, the city now faces about $1.2 million in budget cuts that the council previously voted to split 50-50 with the school department.

Residents and board members Thursday questioned and discussed whether cuts should come from municipal services and the city’s economic development efforts, or from the school department.

“I think an investment in our schools at this point [in] time would be great economic development,” school board Chairman Jim Dill said.

City Manager Peggy Daigle pointed out there are businesses that want to develop in the city now, but the city isn’t ready for development.

“If we don’t put the infrastructure in place now, they’re going to go someplace else,” she said.

Daigle said that instead of taking money already designated for city purposes to make up for the school cuts, the board should be asking the council for a tax rate increase.

By increasing the tax rate to $26 per $1,000 of property valuation, residents with homes valued at $100,000 would see a $180 increase in their tax bills. The city’s current tax rate is $24.20, and the council previously approved a tax rate of $25 for next year.

“With what just happened down the road, we need to bring other jobs into the city,” Councilor David Mahan said, referring to the mill closure.

Residents also had differing opinions on what was most important to people potentially moving to the city and to residents already living there, but most acknowledged that the city is under a strict time limit and doesn’t have a lot of time to research and study the overall impact of the reductions on either side.

“I would rather pay more in my taxes and not cut the schools and the parks and rec [department] so much,” resident Sarah Lindsay said.

She and more than five other residents who spoke all expressed an interest in the city developing an ad hoc committee made up of councilors, school board members, residents and students to explore what the city’s goals are.

“[I recommend] we take the time without the pressure to study where we are … and where we want to be in this community that we all love,” resident Ralph Leonard said.

There again was mention of using funds provided to the city as part of the host community benefits package by the Juniper Ridge Landfill operator to offset the impact of having the facility located in the city to make up for the lost tax revenue from the mill shutdown.

In addition, school board member Lianne Judd again requested that some of the city’s reserve funds for capital equipment replacement purchases be used to make up for some of the revenue loss.

“Help us get out of the hole that we’re in,” she said.

Before the mill closed, the school reduced its proposed $1.5 million budget increase by about half in order to keep the city’s tax rate at a more reasonable level.

Half of the school’s portion of cuts necessary because of the mill closure is being covered by a shift in funding.

The council appeared agreeable at a previous joint workshop to using $100,000 that has been earmarked for new school bond debt to ease the current burden and apply the funds to existing debt.

In addition, the council is expected to authorize the city to fund $215,000 in roof repairs at Leonard Middle School until this fall, when the school can obtain bond funding for the project. At that time, the city would recoup its money.

Other school cuts are slated to include restructuring of education technicians, elimination of freshman basketball, reducing the elementary school principal to half-time; elimination of an education technician in the elementary school, a high school social studies teacher, and a middle school literacy teacher; and stipends for department head positions that weren’t eliminated previously will be cut.

The $12,500 in the school’s budget for crossing guards also is being eliminated, and the board is urging the city to pick up the cost. The school took over the funding in the 1980s because it could be reimbursed by the state, but now that the funding formula has changed that’s no longer the case.

“We feel that this is certainly a public safety issue,” Dill said.

The city is still determining specifically where exactly cuts will be made, but the one significant change from previous municipal budget reduction figures is that the community pool located at the high school will remain open during the summer. The school is planning to fund rental fees so that the high school swim teams can continue to compete.

The council is expected to discuss the budget again at its meeting on Monday, June 5.