NORWAY – Town officials were told Wednesday night that the proposed 2009 SAD 17 budget is conservative but gaps cannot be closed without personnel reductions.

Any programs or new projects, unless justified, are also on the cutting board, and there may have to be elimination of some existing programs, Superintendent Mark Eastman said.

“We’re going to do the best we can with this budget. We’re not going to destroy our education,” Eastman told about 30 town officials from the eight SAD 17 towns at a budget hearing Wednesday night. It is hoped the personnel reductions will be done through attrition, he said.

Officials from Harrison, Hebron, Oxford, Otisfield, Norway, Paris, Waterford and West Paris met at the Rowe Elementary School on Main Street to hear the latest budget projections, which Eastman said are changing daily.

Although SAD 17 is one of a minority of school districts to be under the Essential Programs and Services spending target – it is $550,000 below that mark – other factors, such as a whopping 50 percent increase in electricity and diesel fuel, are adding to the difficulty in budgeting this year.

Additionally, Eastman said, there are three different state subsidy plans and no final funding numbers enacted by the Legislature. He said he hopes that may happen by April 1.

All three plans leave what Eastman called a significant funding gap, and despite the best efforts of the SAD 17 budget committee to put together a preliminary budget, state revenue patterns may force additional cuts and shifts, he said.

Eastman said a spending freeze has been in effect since January, but factors such as heating oil and diesel fuel cost changes, a 4 percent increase in health insurance costs, which was considered good news, and a negotiated cost-of-living increase for staff estimated at $750,000 all factor into the budget gap.

Eastman outlined a preliminary budget plan to the town officials, including selectmen and town managers, saying the Essential Programs and Services, which is the amount the state says each school district must spend to meet Maine’s Learning Results initiative, will be funded at 97 percent and not the 100 percent that was promised in the fourth year. That 97 funding level is applied to a lower amount since subsidy for transportation, special education and facilities have been reduced by 5 percent and subsidy for district administration reduced by 50 percent, he said.

Preliminary expense projections show an increase of about $1.7 million, Maine Care reimbursements will be reduced by about $300,000 or eliminated and the cost for fuel and costs associated with heavy amounts of snow have eroded any carryover funds. Additionally, local property values have exceeded state averages.

“This is what will determine how our budget is cut up,” Eastman said of the property values, which show Waterford taking the brunt of the increase in state assessments and Otisfield and Harrison, which historically had high assessments, coming down this year.

Grant funding has been actively pursued to offset state and federal education funding cuts, the superintendent said.

Eastman said towns must also contend with a new budget validation referendum process this year, which mandates that voters act on the budget in a districtwide meeting. Then that approval must go to the referendum where voters say yes or no on the total budget.

The superintendent will now take the budget to residents in a series of hearings. The next meeting will be with Oxford and Otisfield residents on April 8 and Norway and Paris residents on April 9.