Saco schools’ preliminary budget proposal for next year would require a tax hike of almost 10%, Superintendent Jeremy Ray said this week at a budget presentation.
The current proposal sits at $59.9 million. Last year’s approved budget came in at $57.2 million.
Ray presented the draft to the City Council on Monday night and said the district worked “very hard” to put together a “fantastic” budget.
The annual budget process is still in its early stages, but Ray said district leaders want to make sure they are not creating “any waste” and trying to stretch every penny for the long and short term.
Tax increase almost 10%
The current proposal calls for a tax revenue increase of $3.2 million, which would require a tax hike of 9.94%.
The proposed expenditure increase is $2.7 million, or 4.74% more than last year.
City valuation impacts budget
Saco’s school funding formula starts with two pieces, Ray said: student counts and property valuation. The formula also relies on city demographics, including enrollment and family income.
The projected 2027 city property valuation increase is 10.53%, which is less than the state average of 14.61%, Ray said.
City schools also had a drop in enrollment this year, which Ray said was caused by the end of a project that housed new Mainers at a Saco hotel starting in 2022. The project’s end dropped Saco enrollment by about 100 students, Ray said.
“When you lose students quickly from the funding formula, that impacts us,” he said.
This year, Saco saw its largest number of economically disadvantaged students in years, with 36% living in poverty, Ray said.
Salaries, tuition costs driving increases
The largest cost drivers for the budget include staff salaries and benefits and increases in Thornton Academy tuition, Ray said.
Higher Thornton Academy tuition, which the city pays for on behalf of Saco residents, added $1.1 million to the budget.
Increased staff salaries and benefits account for another roughly $2 million in additional costs.
Some other cost factors, like health insurance cost increases, will not become clear until April.
“This budget is very fluid because of that,” Ray said.
Discussions will continue
It’s still early in the budget process, and additional discussions are scheduled to take place throughout the spring.
A public hearing on both the proposed school budget and municipal budget will take place ahead of the 6:30 p.m. City Council meeting on May 4 at Saco City Hall.
“This is a pretty good situation,” Ray said. “We’re doing OK.”