AUGUSTA, Maine — A state budget move to push some of the June school payments to July has superintendents nervous. They remember the payroll pushes during the McKernan administration in the 1990s.
“It is a gimmick,” Mt. Blue School District Superintendent Mike Cormier said. “I believed [Gov. Paul LePage] when he campaigned and made fun of prior administrations’ gimmick ways of balancing the budget, and here we are, back using it.”
Deputy Education Commissioner Jim Rier said Thursday that superintendents need not worry. The state will push only part of June’s General Purpose Aid to Education payments into July, and they would be paid back in the next budget.
The state will withhold a total of $18.5 million of the $65 million June payment, Rier said. Schools will get the $18.5 million in July, only a week or two late.
“It’s part of the supplemental budget proposal,” Rier said. “It doesn’t reduce the amount they’re getting; it causes it [to arrive] a week or so later. It’s an accounting procedure.”
It’s not the same method used by former administrations for years to balance the budget by pushing a full month’s worth of GPA into the next fiscal year. The goal “is to try to not have that be something pushed every year,” Rier said.
Schools can pay bills a few weeks late, he said. Delaying some of the monthly revenue to schools “is a whole lot better than cutting GPA further,” Rier said.
Paul Stearns, president of the Maine School Superintendents’ Association, said some districts would see cash flow problems.
“Times are very tight,” Stearns said. “They may be counting on those dollars to make payroll and may have to take a loan anticipation note.”
State officials did not want to resort to this, Stearns said, adding that he’s grateful the money will come July 8. “There’s uncertainty until the check is in hand.”
Superintendents agreed, saying it sounds too much “like what we did under Gov. McKernan,” Cormier said.
His Farmington-based district gets about $1 million per month in state aid. If $300,000 of that doesn’t come until July, “we might have to borrow money,” Cormier said. “Our finances are so tight. This is on top of the state curtailment.”
LePage is cutting $12.6 million in current-year aid to schools between now and June 30. For the Mt. Blue School District, that means $113,000 is gone, Cormier said. He said the state has an alternative to cutting money to schools: Raise state taxes.
Regional School Unit 4 Superintendent James Hodgkin said his Litchfield-Sabattus-Wales district might have to tap into its revenue-anticipation note.
“We will not have enough cash flow to pay bills or make payroll,” he said.
Other superintendents, including Cormier and Rangeley Superintendent Brian Foster, said that if schools do get the money as promised, it would be doable. Foster was worried the state would change its mind about restoring the money.
“But they’ve promised that wouldn’t happen,” he said. “We’ll hold them to it.”
Lewiston Superintendent Bill Webster said the push would mean a delay of some $400,000. The School Department has sufficient money to cover the delay, he said.
“I am concerned,” Webster said. “The bottom line is, it’s a gimmick, but it’s one way to balance the budget. If we do get it back, it’ll be fine. We won’t know until we’ve lived it.”