South Portland schools end fiscal year in better financial shape than expected
South Portland Schools Project Slight Surplus for FY2026, City Loan Likely Unnecessary
South Portland, Maine – The South Portland School Department has announced that its fiscal year 2026 budget is expected to end with a modest surplus, a turnaround that has spared the district from the need to tap the city’s reserve fund. Finance Director Abigail Ketchen said the department will request only about $1,100 from the city after settling older deficits, a request that is considerably smaller than originally feared.
The school board and city council had earlier this spring approved a potential loan of up to $2 million from the city’s fund balance to shore up the district’s projected deficit. With the updated numbers, Mayor Elyse Tipton said the loan is “highly likely” not to be required. “That’s probably the best news we could have,” Councilor Richard Matthews added.
A History of Overspending and Depletion
South Portland’s schools have struggled with budgeting issues for several years. Superintendent Angela Atkinson Duina noted that the district overspent by $1.2 million in both fiscal years 2024 and 2025. Those deficits drained the department’s savings account, leaving a fund balance of just $740,000 at the end of FY 2025. The FY 2026 budget still projects an $850,000 spending level, but the new financial strategy is designed to keep the surplus in place.
“We want to be able to stand on our own two feet and be able to manage our own expenses and finances within the budget that we have,” Atkinson Duina told reporters. “I’m optimistic about the district’s future.”
Cautious Spending Measures
In her first year, Finance Director Ketchen – the department’s seventh finance director in seven years – has introduced several prudential measures. “We prepared for the worst, but ultimately, we landed in our best case scenarios,” she said. Among the changes is a spending freeze that restricts discretionary spending until the budget is on a stable footing.
Ketchen’s approach has helped the department negotiate a tighter fiscal outlook, allowing it to request only a nominal $1,100 from the city to cover any residual deficits. The amount is a small fraction of the $2 million loan the city had made available earlier in the year.
Future Planning and Staffing
The school board has also been preparing for the upcoming fiscal year 2027. In a March 31 vote, the board approved the closure of James O. Kaler Elementary School and the elimination of nearly 80 positions. The cuts are part of a broader plan to keep the district’s tax increase at a 6% rate, the same rate the city has maintained for the past few years.
“The school department will present updates, particularly about the finances, before the City Council quarterly. The next presentation will be on November 17,” Ketchen said. The meeting will allow city officials to review the district’s financial trajectory and ensure that the community’s investment in education remains sustainable.
Community Outlook
Despite the turbulence of recent years, the school department’s leadership is optimistic. With a projected surplus and a reduced need for city borrowing, the district is on a more secure financial path. The new fiscal plan, coupled with planned staffing reductions, positions South Portland schools to serve students effectively while keeping the community’s tax burden stable.
The next steps will involve the November 17 presentation to the City Council and ongoing monitoring of the school’s budget to maintain the surplus. Residents can expect a transparent review of how the district will continue to balance educational quality with fiscal responsibility.
