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Extra $6.2M To Aid in Tax Relief

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Extra $6.2M To Aid in Tax Relief
Posted on 07/22/2021
This is the image for the news article titled Extra $6.2M To Aid in Tax Relief

At its July 19 meeting, the City Council voted unanimously to approve a decision by the Board of Public Education to allocate an extra $6.2 million in state education aid for the 2021-2022 school year for tax relief, custodial salaries and the creation of a debt service relief fund.

The vote means that what was an approximately 1 percent tax rate increase included in the original school budget approved by city voters in June will be eliminated – bringing this year’s tax rate increase to zero. In addition, using the funds to cover custodial costs and offset debt service payments will help to reduce future tax increases. All three of these issues had been raised as concerns by the City Council during the fiscal year 2022 (FY22) budget process.

“The bulk of this funding is going for tax relief; it’s just not right up front this year,” said Board member Anna Trevorrow, chair of the Board’s Finance Committee. “The way we allocated this funding puts the district in a good financial place for a couple of years going forward.”

The $6.2 million is the district’s share of the state’s $187 million supplemental budget for education for K-12 schools, part of a spending package proposed by Gov. Janet Mills. The package was approved by the Legislature on June 30 and signed into law by the governor on July 1. The additional funding increases the state’s share of statewide school funding to a voter-mandated 55 percent for the first time in Maine’s  history.

On July 6, the Board voted unanimously to allocate the funding in the following three ways:

        $1.49 million for tax relief. That will result in a 0 percent tax increase this year in Portlands combined city and school budgets;

        $1.3 million to cover the cost of custodial staff in the operating budget. That cost was being paid for with federal coronavirus relief funds, but that federal support will end and eventually the cost would have to be moved into the operating budget, creating a budget gap in future years;

        $3.41 million to create a debt service relief fund. That fund will be used annually to offset increases in the baseline budget driven by debt service for the voter-approved $64 million bond for renovations to Lyseth, Longfellow, Presumpscot and Reiche elementary schools.

Trevorrow and other Board members noted these uses specifically address concerns raised during this year’s school budget process about the school district’s rising debt service payments; using temporary federal funds to pay for permanent custodial positions; and increasing taxes when the city is undergoing a citywide property tax revaluation.

Portland voters on June 8 voted overwhelmingly to validate the Portland Public Schools’ equity-based $125.2 million budget for FY22. The extra funding can still be included in the budget and the decision has been made in time for the changes to be reflected in FY22 tax bills.

“I want to thank the Board, the Council and Portland voters for their strong and consistent support for our schools,” said Superintendent Xavier Botana. “We also are incredibly grateful to our state’s governor and Legislature – particularly our Portland delegation – for demonstrating their commitment to public education with this supplemental funding. Our share provides relief for taxpayers and puts us on a firm financial footing as we begin a new budget year.”

The Portland Public Schools is Maine’s largest school district, with 6,500 students, and is also the most diverse. About one-third of the district’s students come from homes where languages other than English are spoken—a total of more than 60 languages. 52 percent of the district’s students are white and 48 percent are students of color. Approximately half of PPS students qualify for free or reduced-price school meals.