By David Harry
Staff Writer

School officials confronting a reduction of state subsidies and potential budget overruns have bad news for the Town Council: a $250,000 deficit in the current budget.
Board of Education Chairman Brian Dell’Olio said board members and councilors will meet Wednesday, Jan. 13, to discuss effects of state efforts to balance its budget and local plans to close a school funding gap.
“We are not in a position to say what we need,” Dell’Olio said. Superintendent David Doyle will be asked to review operations and expenses throughout the school department, he added.
Although Scarborough schools have a $500,000 surplus in undesignated funds, state subsidies to the $35.09 million 2009 budget were reduced by $1.13 million when  Gov. John Baldacci issued a curtailment order last November.
Dell’Olio said the board and Superintendent David Doyle have shifted funds not needed for teacher salaries or debt service and reduced spending for supplies to compensate for about $1 million of the subsidy reductions.
Teacher layoffs are not part of the discussion, said Dell’Olio. He cautioned dipping too far into the surplus could have long-range effects.
“The danger is the cliff for next year is bigger,” Dell’Olio said.
The 2011 state budget contains a $38 million reduction in education funding, according to Maine Department of Education spokesman David Connerty-Marin. Most of that is passed on to local school districts in the form of reduced monthly subsidies. (See story, page 3.)
Dell’Olio said primary budget items showing potential deficits this year are food service, substitute teacher pay and unemployment pay.
Revenues for the food service budget have fallen short of expenses by $70,000 to $90,000 annually for about the last five years, Dell’Olio said. The shortfall could be reduced to about $50,000 by increasing meal prices at schools 5 percent immediately, he said. Operations and staffing will be reviewed as well.
Past deficits in food service have been covered by shifting surpluses from other accounts, Dell’Olio said, but the food service department is designed to be self-sustaining.
Dell’Olio said he has been assured revenues and expenses will match this year, but the board is nonetheless preparing for a shortfall.
While the account for regular teacher salaries has been used to help draw down the subsidy reduction, Dell’Olio said the account for paying substitute teachers also will be reviewed because it shows a potential $75,000 deficit. Potential department liability for some unemployment payments could lead to a shortfall of about $35,000.
Before the meeting with councilors, board members also will conclude work from a Dec. 17 workshop where they each were asked to define and elaborate on priorities and goals they expected to provide students.
The results of the exercise, conducted by Monique Culbertson, director of curriculum and assessment, were to be presented to the board at its meeting Thursday, Jan. 7, after the Leader deadline.
Dell’Olio said input from the workshop will be used to determine budget priorities  as well as ways to solve the current financial problems.
 “I was impressed with the board’s sincerity and thoughtfulness,” Culbertson said of the workshop that asked board members to consider what should be added or removed from curriculum and operations.
Culbertson said  administrators also have been asked to answer the same questions about what schools should be providing. One area of particular interest is the cost of courses as opposed to the level of participation by students.

Staff writer David Harry can be reached at 282-4337, ext. 219