By RUSS OLIVO

WOONSOCKET — Mayor Susan D. Menard has submitted a proposed $116.5 million budget for next fiscal year that calls for level-funding the School Department, a move that  could trigger a second Caruolo lawsuit against the city.

Menard, who says school officials haven't done enough to rein in costs, is projecting that taxes on a typical single-family home will increase some 16 percent next year — or about $400 on a home worth $240,000 — even without another dime for education.
“My position is to level-fund them until they take us seriously,” the mayor said. “I’m very disappointed the School Committee couldn't get more concessions out of the teachers. Why should they have employees, most of whom make much more than municipal workers, who still do not make a health care co-payment?”
The School Committee has already approved a proposed budget for next fiscal year of $68.6 million, an increase of nearly 6 percent over current spending. But the mayor's spending plan freezes the School Department at about $62.9 million.
School officials claimed to have overshot the latter figure by some $3.7 million in the current fiscal year. When the City Council rejected a proposal to plug the hole with a supplemental tax bill recently, the School Committee responded with a Caruolo lawsuit, an action pending in Superior Court that could compel the city to provide the revenue. Another hearing is tentatively scheduled for the third week of June in that case.
The freeze on school spending means the city's proposed budget would allow no more than roughly $12.5 million in revenue raised from local taxpayers to go to the education department.
The spending plan authorized by the School Committee, however, already envisions an increase of about $5.9 million in that amount, a figure school officials say they need to meet minimum contractual obligations and legal mandates.
Theoretically, the City Council could decide to close all or a portion of the gap. But the mayor's budget puts the council in the unenviable position of choosing between driving tax rates up even higher than her budget plan forecasts, or paving the way for yet another Caruolo action as the fiscal year begins.
Planning Director Joel D. Mathews said the spending plan includes the first of five $1.2 million, annual installments to eliminate a combined $4.9 million municipal and school  department deficit (including the $3.7 shortfall for schools in the current year) and a $1.7 million cash infusion to shore up the public safety employees pension plan. It also includes a $1.1 million increase in debt service needed, in part, to begin paying a $2.5 million legal settlement with PROMAC, Inc. in a dispute over the construction of the Gov. Aram Pothier  Elementary School.
But Mathews said additional spending is not the main force exerting pressure on tax rates – it's the projected loss of state aid to the tune of about $3.6 million, or roughly what was cut from the budget mid-way through the current fiscal year. The package proposed by the mayor represents a net spending increase of just 2.3 percent, but due largely to vanishing state resources, the tax levy – the total amount of money the city raises from all classes of property – will rise about 11.4  percent – from $42.1 million to about $46.9 million.
Other factors, including a recent revaluation of city real estate and a new state law that prohibits one class of property from being taxed at a rate exceeding 50 percent of any other, will shift comparatively more of the tax burden from commercial property onto the residential tax base, he said.
Even though Menard considers the proposed budget a still-evolving draft, the document projects the residential tax rate after July 1 – in a best-case scenario - to be $23.34. Currently, the rate is $13.23. The proposed tax rate for commercial real state and business property is $35.01, up from $32.16, and for automobiles the rate remains unchanged - $46.58.
In order to compensate for the new law and the deflationary effects of revaluation, particularly on residential property, the city proposes restructuring the homestead exemption. Currently, 25 percent of the value of a single-family home is exempt from taxes under the homestead exemption, a figure that will rise to 40 percent. The City Council approved a resolution to enact the change on Monday night.
Owners of two- and three-family homes – which plummeted more sharply than single-families in the revaluation – would not fare as well under the homestead exemption overhaul. Currently, the city exempts 10 percent of the value of two-families from taxation, and 8 eight percent of three-families. The exemption would shrink to 8 percent for two-families under the new homestead plan, and for three-families, it would be abolished altogether.
Without knowing whether the City Council will unfreeze city spending for schools, or by how much, it's still unclear how much more the owner of the average single-family home will pay in taxes next year. But Mathews says that even without any more money for schools, the owner of a house worth $240,000 in the current fiscal year would end up paying about $400 more in taxes in the year that begins July 1.
The projection assumes that, post-revaluation, the value of the house declined about 15 percent, to $204,000, Mathews said. It also assumes that the homestead exemption increased from 25 to 40 percent. Factoring in those variables, the tax bill for the house at the current rate is about $2,400 a year and rises to about $2,800 at the proposed rate of $23.34.
But the picture only gets worse if one assumes that the City Council restores a portion, or perhaps all, of the money school officials are seeking for education, Mathews said.
“Assuming the council will have to restore some level of school funding, the levy is going to be larger, and perhaps a lot larger,” said Mathews. “The school department needs to make some serious reductions, and they haven't started doing that yet.”
During a recent work session with the School Committee, Menard said the School Department could save millions by restructuring the way it pays for health insurance, eliminating all busing except for what is legally mandated for special education students, freezing teachers' salaries and forcing all teachers to share health care costs, as municipal employees do. Yesterday, Menard said her administration was still working with Schools Supt. Robert Gerardi to make cuts, but she said there needs to be more progress on payroll issues.
Menard said that, under pressure from her administration, the school department had agreed to seek new bids for a busing contractor covering only special education students She said it remains to be seen whether anyone would bid on the proposal or whether the School Committee would award such a pact if anyone does.
The legislation that would transform the proposed budget into law was submitted to the council Monday and, as is the norm, tabled it pending a public hearing. Such hearings are normally held in Harris Hall, but due to the heavier-than-usual turnout expected this year, it is set to take place next Monday, June 8, in the auditorium of Woonsocket High School, 777 Cass Ave., at 7 p.m.