MOUNT DESERT ISLAND — The side effects of COVID-19 are still being studied, but one is clear, and that is extra money in school budgets here.
School officials aren’t itching to spend the hundreds of thousands of dollars in carryover funds, though. In anticipation of tough economic times ahead, some of that money is going into next year’s budget and the rest is being put away for a rainy day.
“Because of COVID, there were many changes,” said Nancy Thurlow, business manager for the Mount Desert Island Regional School System, during a recent Mount Desert Elementary School Committee meeting. “We were trying to be conservative on expenditures because we didn’t know what was coming down the road.”
Originally, the MDES projected carryover amount for fiscal year 2021 (FY21) was $316,729 and now is anticipated to have grown to $647,372. Working with Thurlow, Principal Gloria Delsandro has $382,768 of that carryover included in the FY22 budget as revenue and the remainder will be set aside.
“So, all the schools are having a high carryover,” Thurlow continued. “In order to preserve your carryover and not have cliffs or spikes in town appropriations, that’s the reasoning behind not using all of your carryover to reduce the town appropriation for next year.”
For most of the elementary schools, the high carryover Thurlow is talking about hovers around half a million dollars; some are just under that and most are slightly over. In the high school’s budget, the anticipated amount of carryover funds is $1.5 million, which is significantly higher than originally anticipated for the current fiscal year. Thurlow is proposing $1 million of that amount be included in the FY22 budget as revenue and the remainder be put into a carry forward account. Any amounts put into carryover, or carry forward, savings accounts cannot be used in that fiscal year as part of the budget.
“You really have to stick to your line items,” said Superintendent Marc Gousse in response to a Tremont School Committee member asking during their January meeting if those funds can be spent. “We typically don’t do that and don’t want to do that.”
There are several reasons for the extra money in each school’s budget, mainly due to COVID. While there were some unexpected costs associated with the pandemic, there were many budget lines that went unspent when schools shut down for the last four months of the school year.
“We’re seeing an elevated carry forward amount in all of our budgets,” said Gousse in a conversation with the Islander on Tuesday. “The overall impact of shutting down our schools was a significant piece.”
Without students and staff in the buildings, schools saved on heating fuel and electricity. Even though food service continued after a couple of months, most of it was subsidized for the remainder of FY20 and continues to be in FY21. There were no extracurricular activities, which usually include stipends for coaches, teachers and supplies. “We didn’t run our buses,” Gousse added.
When schools needed to ramp up their student–to–technology ratio in response to remote learning, they were able to use Elementary and Secondary Emergency Relief (ESSER) Funds.
Then came the wave of federal COVID Relief Funds (CRFs) that helped with other unanticipated expenses related to the pandemic into the current school year.
“The principals were under huge pressure to spend those funds by Dec. 31,” said Gousse. “And then the rules changed.”
Outside of technology, unanticipated expenses not accounted for in the FY21 budget included equipment for outdoor instruction, personal protective equipment, classroom furniture needed to help meet new spacing requirements and supplies needed for cleaning and retrofitting buildings for increased air flow and quality.
“This is money that is not free money,” said Gousse, adding that it will be an expense incurred by taxpayers and future generations. “I see this money more as a stimulus.”
For now, each school is using some of the money that is being carried forward in their budgets as revenue and putting the remainder into savings for future years.
On Swan’s Island, the anticipated carry forward amount is $484,000, most of which is going into the FY22 budget.
“Out of the carryover, what I did was look at your town appropriation and look at saving some of the carryover,” Thurlow explained to the Swan’s Island School Board of directors during their Jan. 26 meeting via Zoom. “You’re not going to have that carryover in another year. We need to put a little savings account out there… I put aside $75,000 and didn’t use it to offset the budget. That will help in your (20)22-23 year and beyond.
“They’re anticipating there’s probably going to be less state subsidy, a lot of the grants, even though we got the extra ones because of COVID, the regular ones seem to be dwindling each year,” she added. “You need to have some money to offset some of those other costs that are going to happen with fewer revenues down the road.”
Some of the extra funds for Swan’s Island school came from not having to pay substitute teachers and the room and board portion of tuition costs for students coming onto MDI during the week, according to Thurlow.
Large amounts of carryover in school budgets are not uncommon, according to Gousse. It is happening across the state and throughout the region.
“It’s rare to see the financial stability we have here,” said Gousse, explaining schools and districts that rely on state subsidies can see big swings in their budgets from year to year. “We’re not a big receiver of state funds.”
In Trenton, Principal Mike Zboray had proposed saving $150,000 of the anticipated $561,858 carryover amount.
“We had to add more of the carryover to the current budget due to a loss of a little over $100,000 in state subsidy,” he said in an email to the Islander. “This happened because we did not hit the 46 percent free and reduced lunch cutoff.”
Instead, Zboray is proposing the school set aside $100,000 in savings from that anticipated carryover amount.
“If there was ever going to be a time, and I hope it doesn’t happen, where we need to be cautious around funds we do receive, this is it,” Gousse said during the Swan’s Island meeting. “Because I believe this fiscal year and at least the next one after that, and possibly the one after that, are going to be very, very challenging times for our country, our state. I think the conservative approach is warranted.”