11/19/08

Schools freeze spending in anticipation of reduction in state subsidy

The School Department has instituted a freeze on non-payroll purchases in anticipation of losing $250,000 in budgeted subsidy from the state

School Superintendent Alan Hawkins said the department has suspended purchases of equipment, supplies, and other non-payroll items until officials know more about how the state plans to handle a projected $110-$150 million shortfall in anticipated revenues.
Superintendents across the state received notice of the shortfall in an informational letter from the Department of Education Nov. 10, 2008.

"The Department of Education, which accounts for nearly 40 percent of the state's General Fund expenditures, is responsible for recommending to the governor $54,793,297 in curtailments for the current fiscal year," says state Education Commissioner Susan Gendron in the informational letter sent to superintendents.

Hawkins said the School Department is anticipating that the state will withhold one of the monthly $250,000 subsidy payments Cape Elizabeth schools receives. "With that in mind, I had to freeze the budget," Hawkins said in a telephone interview.

Hawinks said he that superintendents should hear more details about how the governor and the education commissioner will deal with the anticipated shortfall, but until then, Cape Elizabeth has frozen spending on non-payroll items such as equipment, supplies, and staff development. Salaries and benefits are not affected, he said, and contracted lease payments on equipment will also be met.

Hawkins said that in the past, shortfalls are sometimes met by the withholding the last susidy payment of the fiscal year in June. "No matter how you slice it," Hawkins said, "a quarter of a million dollars is a major cut in the budget. I decided I better put this (budget) on hold," he said.

Hawkins said the state is expected to announce its decision on budget curtailments before Thanksgiving. Once that decision comes through, he said, the School Department will need to go back through the budget to assess programs and services.