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Superintendents Present FY24 Budget Proposal

Co-Superintendents Melea Nalli and Aaron Townsend presented their recommended $141.3 million school budget proposal for the 2023-2024 school year to the Portland Board of Public Education on Tuesday, March 14. The theme of their Portland Public Schools FY24 budget proposal is: “Strengthening Academics, Behavioral Health and Operational Systems.”

This theme summarizes the three essential priorities of the budget: Maintaining the district’s commitment to the Portland Promise goals of Achievement, Whole Student and People – all centered around the fourth goal of Equity; being responsive to the needs of all students, especially students newly learning English; and improving operational effectiveness in such areas as finance and human resources.

The budget balances the three key priorities with the daunting fiscal challenges that the Portland Public Schools is facing in FY24.

One challenge is very familiar: a state school funding system – called Essential Programs and Services or EPS – that assumes that property-rich communities like Portland can afford to pay a larger local share of their education costs, regardless of the composition of their student body. The district’s EPS subsidy for FY24 is $2.4 million less than this year’s state funding, driven for the most part by the city of Portland’s increasing property valuation.

Another factor has been part of everyone’s daily life for the past few years: inflation. The annual consumer price index has been between 6 and 7 percent for the region over the past year. That escalation is reflected in the costs of many of the goods and services the district procures.

An increase in personnel costs is another pressure. To help attract and retain staff during the nationwide labor shortage and ensure hard-working employees can meet the inflation-driven costs they face every day, the district settled contracts this past fall with bargaining units representing teachers and educational technicians that included wage increases. Increased investments in district employees total just over $4 million in the FY24 budget.

Higher operational costs also are part of this budget. Everyone knows about the district’s struggles since last fall to pay all of its more than 1,500 employees in a complete and timely way, due to staffing turnover and shortages and systemic problems with the payroll system. While most of the immediate problems have been resolved, the district continues to work on a long-term solution by outsourcing payroll, a move recommended by the recent Spinglass audit. The budget includes $590,000 to cover the costs of hiring payroll processor ADP and increasing staff in the finance and human resources departments – also recommended by Spinglass – as well as for shoring up transportation, facilities, and school meal services.

The Portland Public Schools also is experiencing an unprecedented number of students who are new arrivals and from asylum-seeking families, most of whom need intensive English language development support. The number of new arrivals had already exceeded 600 for this academic year and is expected to increase. This budget includes $175,000 in local resources to help these students and their families by providing intake support, language access, and case management services.

The budget also reflects an increase of $2 million for out-of-district special education costs for students whose specific IEP needs we are unable to meet in our schools. These costs are required by law.

Finally, the budget includes debt service costs for the renovations of the schools in the Buildings for our Future bond approved by Portland voters in a 2017 referendum. The three remaining schools are almost complete – the culmination of a 20+ year process to renovate our elementary schools. Lyseth Elementary was renovated in 2020 and now renovations to a second school – Presumpscot – will be completed this spring. The remaining two schools – Reiche and Longfellow – are less than a year from completion. Through careful financing and use of reserves, the district has been able to defer the impact of debt payments for these projects over time, but is still seeing a $2.2 million increase in debt service for FY24.

The budget balances addressing those financial pressures with maintaining the investments the district has made over the past six years to support students experiencing opportunity gaps: students who are multilingual, have special educational needs, are economically disadvantaged or have otherwise been marginalized in society.

Those investments have included supports for mental and behavioral health and youth development; pre-K expansion; investments in academics, including math and science; curriculum development; implementing elements of the district’s Lau Plan to support multilingual learners; supporting and institutionalizing the district’s equity, diversity and inclusion work; and creating full-time librarian positions at most of the district’s elementary schools.

To cope with the fiscal pressures the district is facing, the budget also includes these strategic measures to limit the increase to the school tax rate:

●               Utilizing $1.8 million from the debt service reserve, part of a multi-year strategy the district initiated in the summer of 2021.

●               Leveraging $7.8 million in remaining ESSERF funds (Elementary and Secondary School Emergency Relief Fund money granted to school districts during the COVID pandemic) for ongoing student recovery needs in mental and behavioral health and for learning acceleration.

●               Moving $2.6 million in locally funded investments that are aligned with recovery goals into ESSERF.

●               Making reductions totaling $775,000, primarily by spreading out the cuts across departments and priorities. For example, this budget includes a 5 percent reduction to all non-salary budgets across departments and schools.

The budget proposal calls for a 7 percent increase in the school portion of the tax rate, reflecting a 6.1 percent increase in expenditures, resulting in a $141.3 million budget, up $8.2 million over this year’s budget. The increase includes few new investments but maintains current programs and services, covers increased costs for salaries, benefits and debt service and allows the district to strengthen academics and address student behavioral health needs while stabilizing its operational systems.

The budget requires an increased investment of $8 million from local taxpayers. To achieve that, it would raise the overall school tax rate by 50 cents for a total rate of $7.55 per $1,000 valuation. The proposed budget would increase the school portion of the annual tax bill for the median family home in Portland (valued at $375,000) by $187, or about $15.60 per month.

A 7 percent increase in the school tax rate is historically high – previous recent increases have been 6.2 percent or less. However, this increase is in line with inflation, is less than the costs to continue the current budget, and does not include all of the requests advanced to address district needs.

More specifically, “rollover” cost increases to allow the district to simply continue what it is currently doing, coupled with the loss in state subsidy and other revenue adjustments, would require an 8.7 percent tax increase in FY24. Adding in other important programmatic budget needs/requests would require a tax rate increase of 15.5 percent.

Given those needs and the district’s fiscal pressures this year, the superintendents believe their budget is a fair proposal that enables the Portland Public Schools to maintain its Portland Promise gains for the 2023-2024 school year and to support PPS staff and students while being cognizant of Portland taxpayers.

The Portland community is encouraged to stay engaged and informed during the budget process, which will culminate in a June 13 public referendum on the budget.

The Board on March 14 referred the superintendents’ recommended budget to its Finance Committee, which will have a first review of the budget at a virtual meeting at scheduled 8 a.m. on Wednesday, March 15 (HERE is the BoardDocs link with joining information). The Finance Committee will next hold a public hearing on the budget on Monday, March 20. On April 11, the full Board will vote to recommend a budget to the City Council, which approves the bottom line of the school budget. The Council is slated to vote on the school budget on May 15 to send to voters on June 13. Learn more in the FY24 budget timeline and materials on the district’s website.

View the superintendents’ FY24 recommended budget presentation on YouTube and see the slide presentation.

The Portland Public Schools is Maine’s largest school district, with approximately 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 50 languages. 49.8 percent of the district’s students are white and 50.2 percent are students of color. Approximately half of PPS students qualify for free or reduced-price school meals.