The Portsmouth school finance subcommittee met this evening for their first session in the 2009-10 budget process, and even without the added confusion of whether last night's Council action on a 5% budget cut should apply to them, the outlook is grim.

The members of the committee — Michael Buddemeyer (chair), Marilyn King, and Marge Levesque, as well as alternate member Dick Carpender and school committee members Angela Volpicelli and Sylvia Wedge heard presentations from school finance director Christine Tague and Superintendent Sue Lusi. Only six residents were in attendance, and one was a reporter, one videotaping, and one was 9 years old, watching "Wizards of Waverly Place" on my iPhone.

Tague ran the budget numbers, using four possible scenarios. First, level state aid, which nobody thinks is even remotely likely, but which serves as a known baseline. Then, with reductions of 5%, 10%, and the full 18%. All projections assume the town going to the S3050 tax cap of a 4.75% increase on the levy, which would mean approximately a $1.2M increase available to the schools, according to Tague.

But that number immediately began to shrink. The use of one-time revenues (from unexpected money received this year) has created a structural deficit of approximately $400K, Tague said, so the actual amount available, in the most optimistic scenario, is about $873K. With a 5% state aid cut, that would shrink to $604K (since the schools would be using local tax revenues to offset the loss), a 10% cut would put it at just $33K, and if the worst happened and all state aid vanished, the schools would begin the year $82K in the hole, according to Tague's presentation.

And that doesn't look at any increase in expenses. Teacher step increases (not even looking at contract negotiations, currently underway) are $328K, the largest chunk of $452K in contractually obligated raises across all district staff. Add things like health care increases, supplies, transportation, and the rest of the increase in cost base is about $761K. Add the salary increases to the other costs, and you've got a $1.3M nut.

Even with the fairytale assumption that state aid is level, the schools are still $340K in the hole. At 5%, that becomes $608, 10% makes it $877K, and 18% would be a $1.3M deficit. Tague noted that there was some money in this year's fund balance and a surplus from the region which would offset about $300K.

"Usually, I would not recommend utilizing one-time revenue for operating expenses," said Tague, "But desperate times call for desperate measures. I have to tell you. I've been doing budgets for 22 years, and this is the worst I've ever seen."

And just to tighten the vise another quarter-turn, Lusi warned the committee that there was some speculation that the Town Council may have intended last night's commitment to a 5% budget reduction for next year to apply to the schools. "We're not quite sure how to interpret it," said Lusi, noting that such a move would push the deficit up to around $3M.

"Speaking for myself," said Buddemeyer, "That number is unattainable. That is my opinion."

"I'm not even sure the 18% cut is something we could get to without starting to dismantle the system," said Carpender.

"I don't know how we can present a budget that doesn't meet the needs of the students in Portsmouth," said Wedge, "No matter what they're asking us to do."

"That shouldn't be our goal," said Buddemeyer.

After discussion, the committee decided to continue the budgeting process using the four previously identified scenarios.

Then Superintendent Lusi ran through the most recent enrollment projections, and the numbers are essentially flat, down just 27 students from actual attendance this year. This may mean 3 possible layoffs, but given the distribution, it puts many grades very close to class size caps, so she recommended the committee budget only a .5 reduction out of caution.

As the meeting wrapped up, Buddemeyer previewed some of the difficult choices the committee will be facing. Among the possibilities: zero increases across the board for all staff, including reopening existing contracts. Reducing co-curriculars like art and music. Looking at the elimination of all sports programs. Reconfiguring the elementary schools. Closing Prudence Island. All of these were painful choices, he noted, and not something the committee wanted to do, but said they would consider any of them "if that's where this path leads us."

I do have to mention a comment by Kathy Melvin. She didn't like the idea of cutting sports. "[Since 80% of the school budget is devoted to salaries and benefits. That obviously is an area to explore for further reductions. Since middle school] sports last year was only $5 [to $6K], that's a small amount" said Melvin. "These are not big ticket items. if the problem lies with the number of people and the size of the benefits, look at the source of where all the money is going." ["The largest percentage of the budget is devoted to personnel and benefits, that is the area one should explore before recommendations to reduce small programs for children in the school," said Melvin]

Lusi clarified that afterschool sports are actually $245K, but added that even combining this with zero increases across the board (which, she said, would amount to a $425K saving) would still not get the district back to positive territory if the state budget cut was actually 18%.

The meeting ajourned on this somber note about 7pm.

Let me stress that point about attendance I made up top. There was only one parent there tonight from Elmhurst. The only people that the school committee heard from were PCC, Inc. President Larry Fitzmorris and Kathy Melvin. I would strongly suggest that for anyone who cares about the outcome of this budget process, now is the time to start showing up, asking questions, and helping shape the dialogue.

School Committee Meetings (Public Session 7:00 PM)
Tuesday, February 24th (Town Hall)
Thursday, February 26th (Town Hall) (if needed)

Finance Subcommittee Meetings (5:30 PM)
Tuesday, February 24th (Town Hall)
Thursday, February 26th (Town Hall)
Wednesday, March 4th (PHS Library)
Wednesday, March 11th (PHS Library)
Tuesday, March 17th (Town Hall)
Thursday, March 19th (PHS Library)

Disclaimer: I am an appointed member of the Facilities Committee.

Update: At the request of Ms. Melvin, I have clarified the remarks she made to reflect that she was speaking specifically about the cost of sports at the Middle School. Insertions noted with square brackets. I apologize to Ms. Melvin for the inaccuracy; I was trying to capture what was said, and missed an important qualifier. I try to get things right, and I thank Ms. Melvin for taking the time to provide me with feedback. I'm always happy to make corrections.