School Department Builds Surplus, May Campaign for More

School Department Builds Surplus, May Campaign for More

As I write this on Wednesday evening, the Tiverton School Committee has just announced a special meeting on Saturday morning to discuss the town budget and whether to put forward an alternative budget for the ballot at the May 20 financial town referendum.

The prospect of that campaign reminds me of spring 2015.  That year, a budget petition that I put forward reduced the school’s increase by about $126,000.  (The school budget still went up more than that, but not with local taxes.)  The school committee voted to cancel plans for all-day kindergarten.

Ultimately, they reversed that decision after weeks of advocacy on my part and that of affected parents.  How much would you guess their budget came up short at the end of the year?  It didn’t.  In fact, the school department had $1,130,867 left over, a surplus, bringing its reserves to $3,454,163.  If my budget petition had lost (or if all-day kindergarten had actually been cancelled), the surplus would have been around $1,257,208 for a total of about $3,580,504.

The most important phrase in Rhode Island public school budgeting is “maintenance of effort.”  By state law, whatever the town votes to give to the school department one year, it must give at least as much the next year.  In other words, that extra $126,000 would have been added to the budget every year, forever.  This year, the local increase that the school department requested was $293,500.  The Budget Committee has voted not to add that amount.

At Tuesday night’s Budget Committee meeting, I presented a report in which I traced the history of the school department’s surplus.  The story gets complicated, but the basic point is this:  When the federal government filtered “stimulus” money down to the states and the schools, the State of Rhode Island reduced its regular aid to Tiverton and replaced it with “restricted aid” from the feds.

Regular aid is shown on the town’s budget and local taxpayers have to cover any reductions during the year. In contrast, restricted aid is not shown on the town’s budget.

Over the 2009 and 2010 budgets, regular state aid went down $1,048,928 while restricted aid went up $1,404,587.  As this shift happened, Tiverton taxpayers made up the loss of regular aid as if the restricted aid increase had never happened.  Roughly speaking, for every dollar of reduced state aid, the school department got a dollar of additional restricted aid plus a dollar of local tax money.

Much of that money, the school department simply took from the town (a big portion by suing the town).  To get the rest of it, school supporters threatened voters that the school department would have to do things like cancel sports and close schools.

Then the aid switched back.  From 2010 to 2012, restricted aid decreased $921,360 and regular aid increased $895,587.  However, the school committee claimed that it had to “restate” its budget so that this wouldn’t look like a big increase and told local taxpayers they needed another $675,891 on top of it.  At the end of that budget year, the schools had a $984,508 surplus, meaning that they didn’t really need the big increase.

The school department’s average surplus in the years since (including money it’s spent outside of its budget) has been almost exactly that amount: $985,215 every year.

What the school department is doing with all that money is a whole separate topic.  The important point right now is that, if the school department puts in an alternate budget to take the additional $293,500 from Tiverton taxpayers, that money will be added forever through maintenance of effort, and its huge surpluses will continue.

In a year that the town is facing a big new debt payment to cover school repairs while beating down every other town department’s budget, that would be a very aggressive thing to do.
Tivertonschools-surplushistory-2009-2016

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Justin KatzJustin Katz is a writer and researcher focusing on Rhode Island policy and politics. For more about Justin, see our About page. justin@justinkatz.com (401) 835-7156.

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