NORTH KINGSTOWN – The North Kingstown Town Council on Monday approved the FY 2021 budget of $116.6 million, with almost all of the discussion and contention surrounding the school department funding.
Earlier this year, the town and school committee introduced their preliminary budgets, however they originally were put forward before the COVID-19 pandemic, which has had negative ramifications on the town’s projected revenue. Due to the effects on the economy and residents, the council prioritized not increasing the tax rate, which is currently at $17.09 per $1,000 of assessed value. After calculating the projected effect on the town’s economy, and in order to keep the tax rate the same, the town council cut $2.4 million from its overall budget, with a $1.1 million cut coming from the school department’s requested budget.
In order to make up for the $1.1 million shortfall, the school committee approved cuts and modifications to their budget requests. Cuts included reducing requests for classroom technology equipment, the athletics program, the summer school program and after school clubs and activities, among others. The school committee also approved moving $500,000 from the department’s surplus to its operating budget.
Another request from the school committee, and the biggest point of contention during Monday’s meeting, was that the council move $400,000 from the school department’s capital reserve to its operating budget, which would have helped make up for the shortfall and reduce the need for cuts.
All in all, the cuts and modifications brought the school committee’s budget request to the number set forth by the town council, and would keep the overall budget from raising taxes on residents in the upcoming fiscal year. However, the council was split on moving the capital reserve funds to the operating budget.
After much discussion, the council ultimately voted against moving the $400,000 to the school department’s operating budget by a 3 to 2 vote. The school committee will now have to return to discussions about where to make up the additional $400,000.
Councilors Richard Welch, Mary Brimer and Kerry McKay voted against moving the capital reserve funds, arguing that the school department should use more of its surplus funds, not capital reserve funds, to cover the gaps in its budget. Brimer and McKay also expressed concern that if the capital reserve funds were to be moved to the operating budget, it would be part of the department’s recurring maintenance of effort, and could result in a tax increase in future years.
Welch pointed out that the school department would be seeing additional surplus funds this year, due to schools being closed and certain expenses being down.
“There is a definite amount of excess surplus that will be carried over from the current budget to this budget,” Welch said. “That’s taxpayer money that needs to be applied to the budget that we’re working on.”
The school department is projecting a $1.5 million surplus in this year’s budget, bringing the total surplus amount to $3 million–funds that the three council members said should be applied to next year’s budget.
McKay also said that, instead of cutting programs like athletics, the school committee should have used the additional surplus funds. While the school department has prioritized keeping at least 2 percent of its budget, or roughly $1.3 million, in its surplus funds, McKay said that the remainder could be used on operating expenses.
“Now they’re going to end up with $3 million in fund balance, and that $3 million could certainly pay for the sports programs they want to cut,” he said.
But council president Greg Mancini said that the “goal posts” were being moved from the town council’s original goal, which was to not raise taxes on residents.
“You changed the goal post. The goal post was no tax increase,” Mancini said. “The school committee heard you and they made a modification.”
“The goal of this council from day one [...] was that we’re not going to raise taxes on the residents of this community. The school committee heard you, and they modified their budget to adopt the council’s goal,” he continued. “The change that they requested would maintain the council’s original goal of not raising taxes. I don’t think that that’s unreasonable, and I think it would be a shame if the council does not pass this modest request.”
Mancini also said that council members were “changing the rules” they originally set, and were therefore “losing credibility.”
“We are changing the rules as we go on, and I don’t think that’s right. I think the council’s credibility is on the line,” he said.
Councilor Stacey Elliott also said the council and committee have “gone above and beyond to keep the tax rate the same,” and that the school committee’s request to move funds from the capital reserve to the operating budget should be granted.
“I understand that we’re in difficult times, we’re all sharing in that, but I don’t know that the efforts we went through to keep the tax rate the same are really, in the long run, worth the benefits,” Elliott said. “We’re losing out on a lot of things for a shortsighted solution.”
After Elliott’s motion to move the capital reserve funds to the operating budget failed, the council approved allocating the $400,000 to the department’s capital reserve by a 4 to 1 vote, with Welch casting the sole dissenting vote. Mancini and Elliott also voted against the town appropriation to the school department because it did not include the additional $400,000 from the capital reserve request.
All of the remaining budget items and enterprise funds were unanimously approved. A majority of the allocated funds covered the school department ($65.7 million) and the town’s general fund ($34.6 million). Along with tax revenue, the budget was also supported by state aid and enterprise funds, such as the water department, sewer department and recreation department, among others.
However, another point of concern was the amount of projected state aid the school department would receive.
Currently, the department is projected to receive $11.8 million in state aid, however that number is subject to change, due to the impact of COVID-19 on the state’s economy. If that number is reduced, the school committee will have to make up for even more funding already allocated in its budget.
After the meeting, superintendent Philip Auger said the school committee now has to decide how to fill the $400,000 gap in its requested budget.
“What happens now is that the school committee still has that $400,000 to fill. I don’t know yet exactly what strategy the school committee is going to take on,” Auger said. “That’s up to them to vote on.”
He added that, while the committee could decide to use additional surplus funds to cover the gap, it could result in a structural deficit for the next several years, which made it all the more important to retain the department’s surplus funds.
The use of surplus funds, Auger explained, would be a one-time expense being used toward the recurring maintenance of effort.
“If [surplus funds] go directly in our general fund, then it becomes part of the maintenance of effort,” Auger said. “Which makes it all the more imperative that we retain some of our fund balance, because this isn’t a one year deal. We have to dig out of this now for several years.”
Auger went on to say that, though the department was looking at an increased surplus this year, due to schools being closed, he couldn’t be sure of the amount until everything was accounted for.
And if the state aid is reduced, resulting in another shortfall, Auger said the department could be looking at cutting positions like nurses, social workers, psychologists and occupational therapists.
“It would more than likely involve painful staffing cuts,” Auger said.
At that point, Auger said that he hoped the town would use some of its undesignated fund balance–roughly $13 million–to cover some of the requested expenses in the general operating budget.
The school committee is set to meet next Tuesday, where Auger said they would likely be discussing how to make up for the $400,000 gap in its budget.