JAY — The $200,000 state school subsidy expected for the Jay School Department, which came when the state waived the 2009-10 penalty for rejecting consolidation, will be deposited into the town’s general fund where other undesignated funds go.

Townspeople voted in April to transfer $216,000, the estimated consolidation penalty, from the town’s general fund to the schools to offset the penalty.

Voters in the towns of Jay, Livermore and Livermore Falls rejected consolidating school systems in January. All were expecting to pay penalties, but the governor agreed in June not to levy the penalties until the 2010-11 school year.

Questions arose recently on whether the School Department should return the $216,000 to the town’s coffers.

Superintendent Robert Wall had factored that money in as a revenue in the $9.7 million school budget.

However, the estimated $193,465 in state subsidy the town had expected to lose, is not authorized to be spent by selectmen or the school committee unless voters approve it, Wall told selectmen Monday.

“We’re only authorized to spend what our school budget was,” Wall said.

He requested a legal opinion from attorneys on the additional revenue and shared it with the board.

It is important to note all town funds are together, Wall said.

This additional subsidy will be held by the town in the same account from which funds were appropriated to make up for the penalty.

The town will earn any interest on these funds, he said.

According to the legal opinion from Brann & Isaacson, even if the receipt of unanticipated subsidy from the state had a practical impact on the town, it does not appear that there is authority under Maine law for the town to reconsider the school budget that has been approved by the voters.

A request would have had to come in to reconsider a municipal school budget within 15 days of the final budget approval by the voters, according to the opinion.

Attorney Daniel C. Stockford recommended the school and town officials not take action to reconsider the school budget and instead, they should address how these funds will be applied when developing the budget for the next fiscal year.

Resident Delance White said that he was guaranteed in April that the School Department would be fined for not consolidating.

They expected to be fined, Wall said, but a group effort that included Jay town and school officials worked to delay the penalty. Nobody expected it to be eliminated this year, Wall said.

White warned there needs to be cuts made somewhere due to the economic decline and loss of tax revenue.

Wall said the school budget was reduced by $482,000 this year, which included elimination of several positions.

“Selectmen are trying, the School Committee is trying, to work this through,” Wall said.

dperry@sunjournal.com

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