MILLINOCKET – The Town Council will decide on Tuesday whether to accept the School Department’s proposed $7.8 million school budget for 2008-09, officials said Wednesday.

The council will hold a budget adoption meeting at 4:30 p.m. at the Stearns High School auditorium. Residents are invited.

The meeting will vary from usual procedure, Town Clerk Roxanne Johnson said, in that the School Department budget will be reviewed before the municipal and wastewater budgets so that school committee members can attend a banquet that night.

The proposed school budget increases by $166,640, or 2.8 percent, over this year’s, school officials have said, but shrinking state and federal funding force a $772,229 increase in local funding. That’s as much as 2 1/2 mills, town officials have said.

The Millinocket School Committee voted 4-1 at a meeting last week to maintain the budget. The committee was meeting to decide whether to try to cut an additional $100,000 or so from the budget, but only board member Arthur Hopkins wanted to make further cuts. His was the dissenting vote.

Board members, Chairman Thomas Malcolm said, “felt that this budget is what’s needed to run the schools.”

Further cuts, he and Superintendent Sara Alberts said, would force layoffs and drastic reductions to basic school programs, if not the elimination of entire school grades. The school system cut 12 positions over the past four years, including nine teaching positions, to keep pace with declining enrollment, but the anticipated revenue reduction outstrips those cuts by far.

The council cannot exercise a line-by-line veto, but it can reject sections of the overall budget, and for the first time in Millinocket, voters will have a chance to accept or reject the overall town budget as part of a coming referendum.

If the council rejects the budget, it will go back to the School Committee. If it approves it, then it goes to town voters.

Alberts’ proposed budget projects a $605,589 loss in revenue due mainly to declining state Essential Programs and Services funding. Of the total loss, about $279,654 is the projected EPS shortfall, Alberts has said.

Among the Millinocket revenue shortfalls are about $296,842 in EPS special education funding; Medicaid reimbursements, which are down about 50 percent, or $60,918; and the school’s designated and undesignated fund balances, down 50 percent and 55 percent, respectively. Another $476,000 in state and federal grants also has been lost.

About half the school districts statewide are receiving less subsidy than last year, state officials have said, mostly because school enrollment statewide has dropped 10 percent in the past three years.

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