Schools prepare for another drop in state aid

Schools prepare for another drop in state aid

SMITHFIELD – The town’s contribution to its school budget will need to be 3 percent higher than this year to provide a 2 percent increase to the school budget in 2020, says Supt. Judy Paolucci.

Smithfield received $6.4 million in state aid for the 2019-2020 school year.

Paolucci said state aid will decrease another $245,000 next year, according to her estimates. With enrollment decreases, the drop could drop even further to $360,000.

The superintendent said the numbers from the state are very preliminary, and usually change twice before a final number is given. She said her estimates are based on a worst-case scenario, and hopes state aid does not go any lower.

She added that school administrators are working hard to cut costs across all departments.

This fiscal year, the town level-funded its contribution to the $39 million school budget with a $32 million allocation. Anticipating another decrease in state aid, which dropped by $1.5 million last year, Paolucci says the school budget can’t remain flat forever.

According to Paolucci, this year’s overall budget is about even with last year, or a 0.16 percent decrease.

She added that if the schools operate at a 3 percent overall increase next year, the town will need to provide 4.8 percent more in municipal funding than this year.

Paolucci noted that the budget has not been drafted yet, and emphasized that this is the early part of the process.

To keep the school budget flat, the town appropriation will need to increase 1 percent to make up for more state aid losses, she said. With no increase in town appropriation, the overall school budget will decrease by 1 percent.

“It’s a bit depressing because just to keep us flat, and you know all sorts of expenses rise every year,” Paolucci said.

Paolucci said the town used $300,000 in the schools’ fund balance to close the budget gap last year. She said the School Department is planning on using another $300,000 of fund balance again in the next budget.

“So the projection right now is that there is going to be a $300,000 deficit?” said Town Manager Randy Rossi.

Yes, Paolucci responded.

Rossi said the town is focused on anticipating the debt service for new elementary school bonds, and is expecting $837,000 in payments this year.

Paolucci said during a joint School Committee and Town Council meeting on Dec. 2 that swings in state aid make it difficult for long-term projections and capital improvement planning.

Smithfield’s median income is increasing at a higher rate than the rest of the state, and Paolucci said that means less aid from the state. The formula has “quite a few things wrong” with it, she said, including using census data and what she sees as the unfair practice of looking at salary data.

She said fresh census data will provide information on how fast the town is growing wealthier compared to the rest of the state. Paolucci said she does not anticipate it to show that Smithfield residents are earning less than last year.

Paolucci said the town should advocate with local legislators to update the formula to stop using salary data. Town Council president Suzy Alba encouraged Paolucci to write to the state with her concerns, which she agreed to do.

Town Council members criticized the School Committee last year for what they view as poor financial spending following a $1.4 million decrease in state aid. The council opted to keep funding level in this year’s school budget in anticipation of tax increases from the $45 million elementary school bond project.

Paolucci said decreases in enrollment, which this year means 40 students fewer than last year, also impact state aid. She said while the decrease was within enrollment projection margin of error, it was still a shock to her.