JAY — The Jay School Department is looking at an estimated $297,680 curtailment this year in anticipated state education subsidy that affects the voter-approved $9.7 million budget for 2009-10.

The loss of state funding may climb higher this year and subsidy loss is expected to get worse in 2011 and 2012, Superintendent Robert Wall told the School Committee on Thursday.

“We are facing curtailment like all the school systems in Maine,” Wall said.

The state is facing a revenue shortfall and has ordered an additional $38 million curtailment in education funding.

The bottom line is the district will have less funding than was expected when residents approved the budget in April, Wall said.

School leaders have to look at not only cuts for this year, he said, but for future years.

It is estimated that Jay, which receives minimal state aid, could lose between $893,040 to $1.19 million in 2010-11, and an estimated $1.78 million in 2011-12, Wall said.

There will be a workshop in January with the School Committee to look at ways to save money, keep student services, and not to request the use of more taxpayer money, Wall said.

Spending has been scaled back and restricted already, he said.

It is important to realize, Wall said, that 74 percent of the budget supports staff salaries (58 percent) and benefits (16 percent), and 26 percent supports other areas in the budget.

When it comes to reductions, it’s going to be difficult to stay away from salaries and benefits, Wall said.

In the current budget, many cuts were made including elimination of teaching and administration positions, going to a one-run bus system, moving the fourth grade up to the middle school, and reducing spending as much as possible, Wall said.

This budget is $482,234 less than the previous year’s $10.2 million. Some positions were saved by federal stimulus and stabilization funding.

“We are in an ongoing situation where the resources we are getting are less and less,” Wall said.

This year without touching $216,000 the voters set aside to offset a state penalty for not complying with the state reorganization law, the shortfall is estimated at $380,175. If the penalty money is used to offset the loss of funding, then the shortfall is estimated at $164,175.

The state agreed to delay penalizing school districts this year, which has left the money sitting in the bank in Jay’s case. The district did not receive the full amount the state had planned to penalize it and instead received about $193,000, Wall said.

Another issue facing the system is that when voters approved building a new middle school in the 1990s, they were told that taxpayers would only have to pay so much and the state would pay the rest of the debt service. Now that there is a different state funding mechanism, based on the essential services and programs formula, the taxpayers could find themselves paying for the debt service in future years, Wall said. Those bond payments run until 2018.

“We need to plan for fiscal 2011. We have to look at how we plan and how we guesstimate,” Wall said.

The school district has asked the taxpayers for “significantly” less and less, about $1.9 million, since 2004 to support the budget, he said.

“It is very important to note, we have not passed on to the taxpayers when we have reductions from the state,” Wall said.

They will again try to make cuts in the budget without going back to the taxpayers, he said.

“We need to stay positive. It’s not the end, and we can make it through this,” he said.

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