The Rugby School District’s 2009-10 budget features a healthy salary increase for teachers, administrators and ancillary staff, over $500,000 in federal supplemental funds for building improvements, new equipment and programs, and perhaps the best news, a 75-mill reduction, lowering the local taxpayers’ share.

“(The district) certainly is in a good situation right now with its budget,’ says Jeff Lind, school superintendent. “When you can have a balanced budget and give a tax break to property owners, that’s a positive.”

The school mill levy cap has been reduced from 185 to 110 as part of an education funding formula passed by lawmakers. The drop means less funding obligation on local taxpayers and a larger share picked up by the state.

The school board will review the proposed 2009-10 budget at its meeting this Tuesday, July 21, beginning at 7 p.m. in the Jr.-Sr. High library.

The preliminary expenditures are figured at $5.1 million with revenues projected at $5.5 million, Lind said.

Of course, the revenue includes about half a million dollars in one-time supplemental grants which eventually must be obligated for building projects and equipment.

“If you take those supplemental grants, we have essentially a balanced budget,’ Lind said.

For the past three years district enrollment has been stable or slightly up, and that’s the reason the financial picture has remained rosy. The student count this coming school year will be at or near last year’s totals, but in the coming years, Lind said, enrollment will again start to decline. And that will create a challenge for officials to meet rising expenditures with limited state revenue tied to enrollment.

There is a bit of good news on the horizon, as the county’s tax roll should get a boost in the future from the large wind farm being constructed and expected to be in operation later this year.

The board likely will approve the expenditure side of the proposed budget this week and hold off approving the revenue portion until more concrete figures for the tax mill rate are determined, Lind said.