Budgets: Line-item format grows in popularity
(from Maine Townsman, April 1996)
by Jo Josephson, Staff Writer
This Maine Municipal Association publication is presented for "Classroom Use Only." Its intended use is to stimulate and aid in discussion and role playing within a classroom setting.
School costs. They continue to rise and the state's share hasn't kept pace. With towns attempting/being forced to make up the difference through the property tax, it is no wonder that controlling the school budget has been the focus of many a municipality.
If you doubt it, you haven't been following events in Bucksport, where, last November, residents voted to amend their charter giving their council line-item (albeit broad line-item) veto power over the school budget. Or in Saco, where they are currently considering doing the same.
If you doubt it, you haven't been following events in SAD 9 (Chesterville, Farmington, Industry, New Sharon, New Vineyard, Temple, Vienna, Weld and Wilton), where in the name of greater participation and less intimidation, voters now cast their ballot on the school budget in the privacy of the voting booth.
Depending on who you talk with, the attempts have proved effective, instructive, disruptive, or downright destructive.
This article focuses primarily on the line-item budget format approach to controlling school spending. But knowing full well that it often goes hand-in-hand with referendums, it also looks at some of the pros and cons of secret ballot votes on the budget.
HOW TO ADOPT A LINE-ITEM BUDGET FORMAT
While taxpayers in a school district, be it a School Administrative District (SAD) or a Community School District (CSD) have had the option of adopting a line-item school budget format or any other type of format for that matter since 1976, when the so-called "school budget home rule act" was passed, until recently, most have stuck to the state-prescribed lump-sum budget format.
That format, prescribed under 20-A MRSA Section 15614, usually consists of four basic articles including one that specifies the required state and local share and another that specifies how much, if any, additional local monies are to be put into the pot.
It goes without saying that the lump-sum format gives the school board the greatest amount of control over school expenditures and the tax-payers the least amount.
But, as noted above, since 1976, under 20-A MRSA Section 15617, tax-payers have had the power to amend that format via petition. Although, there is nothing preventing school boards (in non-charter communities) from proposing such a change without the pressure of a petition.
Under Maine law, petitions to districts and town meeting communities must carry signatures of at least 10 percent of those who voted in the last gubernatorial election; charter municipalities require signatures by at least 20 percent of those who voted in the last gubernatorial election
In CSD's and town meeting communities, it only takes a majority vote to change the school budget format. In SAD's it requires 20 percent of the number of votes cast in the last gubernatorial election or 200 votes or whichever is less. In charter communities, it must be at least 20 percent of the number of votes cast in the last gubernatorial election.
It should be noted that the petition should be as specific as possible, say veterans of the process. It should carry the wording of the format so desired and an explanation of what would be covered in each line-item.
It should be noted that if the petitioners desire a referendum vote on the format change, the petition should say so. And, last but not least, whatever method of voting is used, a change in the budget format must be voted on at least 90 days prior to the school budget year for which the change is to be effected.
It's not as confusing as it might appear.
In School Districts: Upon receipt of a petition, the district school board can vote to adopt the proposed budget format, without going to the voters. Or the board can include the proposed format change in an article to be voted on at the next district-wide meeting. Or the board can prepare ballots for a secret ballot vote in each of the district's member municipalities.
In Municipal Schools: Upon receipt of a petition in towns where the school budget is decided by the town meeting, the municipal officers (selectmen or councilors) may either place the proposed format on the town warrant or they may call for a secret ballot, referendum vote. Again, nothing precludes the officers from proposing the change themselves. In the case where a town or city council is the final budget authority, the format is adopted by amending the municipality's charter by referendum.
By School Board Action
As noted above, there is nothing in the law that precludes the school board/committee from voting to change the format without going to a district-wide vote. Which is to say, they need not wait for a citizen's petition.
In recent months, in at least one school administrative district (SAD 52), and one community school district (CSD 10), the school committees/ boards have made the change to a line-item budget format, without going to a district-wide vote on the for-mat. Although that is not to say they were not under pressure from taxpayers to do so.
Each worked with a task force comprised of selectmen, budget committee members, and other citizens to hammer out acceptable line-item budget formats that were then adopted by the board of directors. As described below, each developed very different formats.
WHAT ARE SOME MODELS
To be sure, a true line-item budget would contain several hundred lines. But that is not practical. And it smacks of micro-managing, say those contacted for this article by the TOWNSMAN.
Instead, what most school units with so-called line-item budgets are voting on contain on the average about 10 line-items. Enough to give broad control to taxpayers but not so many as to micro-manage.
As such, they are voting on what some call "category" budgets, with each category in essence a lump-sum in its own right, but a smaller lump sum than what has been voted on in the past. Which is to say there is no bright line between a lump-sum budget and a line-item budget.
That said what follows is a look at four different models currently in use, with a focus on salaries, one of the more controversial items in a budget.
SAD 67 (Lincoln, Chester and Mattawamkeag)
What distinguishes SAD 67's line-item budget from others collected by the TOWNSMAN is the lumping together of all teacher salaries, teaching supplies, and administration into one broad line-item and labeling it "Regular Education". The disadvantage of this format, some might argue, is that it does not allow for a direct, separate vote on salaries or instruction or administrative costs.
SAD 67's budget format, which was designed by the district's board of directors, following a vote at a special district meeting granting the board the authority to leave the format up to the board of directors includes eight line-items:
Regular Education Vocational Education Co-Curricular Support Services
Maintenance and Operation of Buildings Transportation Existing Bonds Contingency
Last year, the first for the new format, found district voters approving the budget by a margin of 6 tot during a single secret ballot in each of the member towns, but not before the superintendent widely aired and walked the taxpayers through the budget in a series of columns appearing in the local paper.
SAD 46 (Dexter, Exeter, Garland, Ripley)
Not all SAD line-item budget formats lump administration into one line-item along with teachers salaries and instructional materials, as does SAD 67. SAD 4G's budget format separates out administration costs into two separate line items.
But like SAD 67, it too lumps teachers' salaries and instructional material into one category which it calls "All Other Educational Expenses".
The disadvantage, some might say, of this format is that it lays open the salaries of administrators to public vote, not once but twice. As such, it should be noted that two years ago, it took six secret ballot votes to pass SAD 46's line-item budget. The sticking point was the line-item dealing with administration.
SAD 46's format includes the following line-items:
Administrative Board of Directors Principals Guidance Library Special Education
Vocational Education Co-Curricular Food Service Transportation Capital Outlay
Undistributed All Other Educational Expenses
SAD 52 (Greene, Leeds and Turner)
SAD 52's line-item budget differs from the above two in that there are separate line-items for elementary and secondary education. Each of the items includes instructional salaries as well as instructional supplies, requiring voters to deal with salaries at the same time they deal with materials.
Unlike SAD 46, the administrative costs are not singled out; they are included in a line-item called "District-Wide Programs and Services", which includes such things as the superintendent's salary, the substance abuse councilor and the librarian's salary, as well as school board stipends, and legal costs.
SAD 59 nine line-item budget debuts this summer at a district-wide open meeting, with the following line-items:
Elementary Education Secondary Education Special Education
Extra-Curricular Activities District-Wide Programs and Services Debt Service
Transportation Buildings and Grounds Contingency
CSD 10 (Manchester, Mount Vernon, Readfield and Wayne)
Not only, does the newly adopted (January 1996) CSD 10 line-item budget format contain a single line-item devoted to administration, it also contains a single line for teachers' salaries and a single line for instructional materials.
As such, in comparison to the other format reviewed in this article, it is the least lump-sum type line-item budget, with the exception of Bucksport's line item budget.
In CSD 10 format tile items are as follows:
Instructional Salaries Instructional Support Operation and Maintenance of the School Facilities
Transportation Developmental Education Vocational Education Athletics and Co-Curricular Activities
School Administration Support Services Future Development of School Facilities
It should be noted that the so-called "Support Services" line-item is further broken down into nine separate lines (architectural fees, contingency account, fiscal services, food services, guidance services, health service, improvement of instruction, library-media, and school committee). As the format is structured, voters can amend each of these "sub" lines before voting on the total.
Like SAD 52, this format will debut this summer. Like SAD 52, the budget will be voted on at a district-wide meeting.
As noted in the introduction of this article, last fall Bucksport voters amended their town charter giving the town council increased control over where their education dollars were being spent. Like CSD 10, the budget format separates instructional salaries from other instructional costs; like CSD 10 it separates out administrative costs. Unlike the other formats, it focuses on salaried or non-salaried line-items. It has 10 lines:
Instructional salaries Administrative salaries Operation and maintenance of plant salaries
All other salaries Operation of maintenance of buildings other than salaries
Instructional cost other than salaries Debt service Capital improvements
Transportation All other costs
SOME THOUGHTS ON LINE-ITEM SCHOOL BUDGETS
Voting on the Budget:
There is something to be said for voting on a line-item budget by secret ballot. The day-long voting gets more people to participate, especially if it is scheduled to occur during a regular statewide vote. It also allows for absentee voting. And it relieves people of the intimidation inherent in group voting.
But it does not provide for any flexibility when it comes to "minor" adjustments in the budget. The vote is either "yes" or "no". And it does not allow for a ready "explanation" just prior to the vote, as does an article in open-meeting vote. And last but not least, argue some school administrators, the yes/no vote format does not indicate why voters voted as they did.
There is something to be said for voting on a line-item budget at an open meeting. Ideally, it allows for a genuine discussion of the issues at the time of the vote. As such, one could say it allows for a more informed vote. And depending on how the articles are worded, it allows for amending the article/line-item upward or downward.
But it does not allow for flexibility in voting in that it requires one to at-tend a meeting at a specific time. Nor does it allow for absentee voting. And it does not allow for anonymity. Though it should be noted that there is nothing precluding written ballot voting at open-meetings, save for the practicality of the process.
Salary Line Items
There is no question that salaries (teachers and administrators) are often the target of disgruntled voters. As such, many line-item budget formats do not include them in a line of their own but mingle them with instructional costs or support services.
The TOWNS\IAN raises this issue to point out that the design of line-item budgets must be carefully undertaken, and must not falsely raise the expectations of the voters to think that they can affect individual salaries that have already been negotiated.
According to Jack Turcotte, Superintendent of SAD 67, by state statute, the school committee negotiates employee benefits. A negative vote on the line-item of salaries simply results in reduced staff, not reduced salaries.
Transfer of Funds
There is no question that budgets are estimates and have to be fine-tuned from time to time. As such, many school entities with line-item budget formats contain a transfer clause. For without such a clause, school committees cannot transfer funds between the line-items.
Most line-item budgets reviewed by the TOWNSMAN for this article authorize the board of directors to transfer up to five percent of the budget lines into other lines when needed.
Only in SAD 67 is there no transfer authority. According to officials, there is no need to because the line-items are so broad. It should be noted that to grant carte blanche transfer power to the board would in essence defeat the intent of the line-item budget format.
There is no question that the introduction of line-item budgets, especially those voted on by secret ballot, require a more highly informed voter. And there is no question that many school officials, aware that public meetings are not well attended, are going to great lengths in what the TOWNSMAN would call "getting the word out on the budget."
SAD 67 Superintendent Jack Turcotte, faced with the radical change in approving the district's budget (line-item by referendum) last year, took on this task by writing more than a dozen detailed articles that were reprinted in the weekly newspaper, the Lincoln News, over a period of 17 peeks prior to the referendum vote.
The copy was brisk, concise, and candid. It was reader friendly, with titles such as "Hot Top and Fertilizer vs. Textbooks and Programs, An Inside Look at the Elementary School, Downsizing: How is it Done?"
It may have played a major role in the passage of the budget, first time round. It should serve as a model for other districts.
While not a line-item district, SAD 47 (Belgrade. Oakland, and Sidney) does vote on its budget by referendum. It's twice a year newspaper, the Messalonskee Messenger, is a model for getting the word out on the school budget. According to the District, the 24-page tabloid costs approximately $9,500 a year to produce. Printing, folding, preparation of bulk mailing, and delivery come to $2,800 a year. The paper has four editors.
Another resource is MMA's 28-page legal packet focusing on the legal aspects of school budgets. Distributed upon request, without charge, from MMA Legal Services.