JAY — The $216,000 voters agreed to transfer from the town’s surplus account to the School Department to cover a penalty for not consolidating was factored into the school budget as  revenue.

The state has since agreed to delay penalties for one year. Jay’s estimated penalty as of April 21 was $210,694.
The state planned to withhold the penalties from the subsidy the systems received.

Jay School Superintendent Robert Wall explained the situation to School Committee members Thursday night.

The delay of the penalty and those funds that are expected to be released by the state to Jay as part of its subsidy are not part of the $9.7 million school budget.

“The school department is not authorized at this time to expend any more than the voters approved,” Wall said.

Therefore any additional subsidy that will come in because of the passage of L.D. 285 that delayed the penalties, would not be allowed to be spent without voter approval, he said.

It is unknown if the state will be able to give Jay the full amount of subsidy projected during the next school year due to the continued shortfall of state revenue, Wall said.

Last school year, the school department had to cut $197,400 from its approved budget in mid-year to make up for the lower subsidy from the state.

That money came back in late June through the federal Recovery Act Stabilization Funds, he said, and it only could be spent in specific ways.

School Committee members Judy Diaz and Chairwoman Mary Redmond-Luce said they would like to see the penalty money go back into the town’s general fund.

They suggested voters be asked what they want to happen with the money during the next annual town meeting in June.

If the return of the $216,000 is requested by the town, the Jay School Committee would have to request a special town meeting, Wall said.

“If the return of the funding is voted at the special meeting, a yes or no referendum vote would need to take place to authorize the transfer,” Wall said. “This could result in the school department having to lower the expenditure budget if the state funds are not received.”

The penalty is only delayed one year, he said, and unless the law on consolidation is repealed or new legislation has an affect on the penalty, a penalty would be assessed next year, he said.

The School Committee and Wall expressed its appreciation to selectmen and the voters for their support of the school’s penalty this year.

“No doubt about it, we are appreciative of what the town did for us,” Wall said.

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