SACO — An accounting error will cost the Saco School Department almost half a million dollars in the coming school year.

And property taxes could go up significantly as a result, unless the city can find a way to offset the loss by making cuts to the budget.

School Department Finance Director Jason DiDonato told the City Council during a workshop on Monday that the state switched to a new data system, and when data was transferred to the new system, some errors occurred.

The data has since been fixed and will be correct moving forward, but the error caused Saco to lose nearly $500,000 in state subsidy this year, he said.

DiDonato said the School Department reached out to the state Department of Education about getting the money back.

“They basically told us to wait until next year,” he said.

Mayor Ron Michaud said this was an example of the state issuing a mandate and not following through, as it could have hired someone to transfer the data or been more proactive to ensure the data was being entered correctly into the new system.

The city is suggesting that the School Department cut its contingency fund in the coming budget year to reduce a potential tax increase.

As currently proposed, the $34.2 million school budget would increase the mil rate by about 53 cents, and the proposed municipal budget would increase the mil rate by about 47 cents – for a total of a $1 increase in the mil rate.

If unchanged, the owner of a $200,000 home would pay $200 more in property taxes unless some or all of that amount is offset by the state’s homestead exemption.

The school budget proposal, which has been approved by the School Department, will go before the City Council on May 9 for a vote and then before voters on June 7 at a referendum for a final vote.

City Councilor Alan Minthorn said he’s talked to many people who are upset at the thought of a tax increase, and he suggested the School Department postpone some programs until next year.

“We’ve got to suck it up; we had an error,” he said.

Minthorn suggested the school cut its budget by $275,000 to drop the mil rate increase from the School Department to about a 32-cent increase.

But Superintendent of Schools Dominic DePatsy said if the School Department cut its budget any leaner, people wouldn’t want to move to Saco because of its schools. “We’re on a big diet,” he said.

City Councilor Kevin Roche suggested the School Department cut $150,000 from its contingency fund, and that the city cut $175,000 on the municipal side during upcoming budget discussions.

“The schools have sacrificed enough,” said Roche.

The councilors did not vote at the workshop, but the consensus was to cut $150,000 from the school budget.

“It’s not optimal, but I’d rather cut that than teachers,” said DePatsy.

The council will hold future workshops to discuss the city budget before it makes a final vote on May 9.

— Staff Writer Liz Gotthelf can be contacted at 282-1535, ext. 325 or egotthelf@journaltribune.com.