Of Two Minds on Money

Of course, it's always more pleasant to have surpluses, rather than use them, which is a question that the Newport school department is facing:

Last week, Supt. John Ambrogi proposed hiking school spending 2.12 percent next year to $38.5 million. But the budget would require the city to increase its education appropriation by 5 percent, or $1.17 million, because of declining and stagnating federal and state aid and a projected increase of 15 percent in employee and retiree health coverage.

The School Department has accumulated a surplus in recent years and Ambrogi said he planned, for the second year in a row, to use $800,000 of it to help balance the budget. But he and committee members warned then, and again last night, that using all of it to pay for operating expenses would potentially set the schools up for budget crises in the years to come. The state tax levy cap would prohibit the schools from being able to make up the large shortfall they would eventually face, they said.

I incline toward City Councilman Justin McLaughlin's response:

The school surplus, he said, was built on savings that Ambrogi described as coming from reductions in staff due to declining enrollment and less costly negotiated labor contracts.

"This is not a windfall," he said. "That money belongs to the taxpayers. ... It's money that was appropriated for operating expenses."

Being in the financial black is wonderful, but government is supposed to be a non-profit operation, and when red times come, it should dip into reserves and cut back on expenses.