Media Archive

SAD 41 posts $1 million surplus

Article from The Piscataquis Observer, Vol. 166, No. 6, February 11, 2004

By Jessica Lee
Staff Writer

Fund balance may be used to provide tax relief

MILO A $1 million surplus in SAD 41 may help provide some relief for property taxpayers in 2004.

SAD 41 Superintendent David Walker announced last week to the board that the recently-completed audit "verifies we have a positive fund balance" of approximately $1.09 million.

The board will now determine whether to use that surplus to provide some short-term tax relief to taxpayers in the coming year or to sustain the local assessment over a period of years.

Walker presented one option to the board at the Feb. 4 meeting, which would utilize $645,000 of the surplus to provide approximately $105,000 in relief to sending communities : Milo, Brownville, Atkinson and Lagrange. That translates to a decrease in the local tax rate from 1/3 a mill in Atkinson to 1 mill in Milo.


The net savings is calculated based on the property valuations in each community. Milo is the only community that saw a net decrease in its property valuation, according to Walker. Atkinson saw the biggest jump.

While a short-term tax break is desireable. Walker said that the school board is worried that taxpayers in the following year would see a considerable jump.

"The board is concerned that we do this in a way that is sustainable," said Walker. "By providing a short-term tax relief, although it would be welcome to the taxpayers, it would just be a short-term answer. The board is anxious to do whatever it can, in a planned manner, to provide sustained tax relief, rather than a one-time windfall."

By using the fund balance each year to offset fixed budget increases (such as wages, benefits and utilities), Walker said the board could feasibly maintain a budget in 2004 and beyond that shows no tax increase to the communities.

According to Walker, the surplus derived mostly from state and federal reimbursements for services has increased each year steadily since 1999 when the district had to borrow $650,000 in revenue anticipation funds, but could not pay it back immediately. In 2000, the surplus was $84,000. It grew to $401,000 in 2001.

In 2002, the books showed $704,000.

Walker said it is difficult to determine if that income will remain in the coming years, or whether it will be cut at the state or federal level. In addition, the revenue hinges on the result of the town of Atkinson's deorganization. Another factor that could impact that income, he said, is the potential change in the state's funding mechanism on the horizon. Enrollment poses an additional unknown, he added.

Walker said the budget process for 2004 has begun. Staff and administrative requests are being formulated for submission in late February. The superintendent will meet with the administrative team in March on fine-tuning their requests. In April, the budget is presented to the board for additional workshops and adoption prior to the June annual meeting and vote by residents.

The superintendent and board are pleased, however, to be facing such a dilemma.

"Worst case scenario, we'll bring forth a budget that represents no increase to the local taxpayer," Walker said. "Best case scenario, that fund balance may be able to provide some relief to taxpayers."


NOTE - This article reflects the views of the author and not necessarily those of the TRC Alliance Team.