The first week of a new fiscal year has ended without a new school budget in place in Millinocket. Credit: Linda Coan O'Kresik / BDN

The latest dispute between the town of Millinocket and its school department over the school budget has raised questions about what will come next as the first week of the new fiscal year ended without a new budget in place.

Town councilors approved a payroll warrant that contained raises for school staff at a special meeting Wednesday after Superintendent Joshua McNaughton accused town leaders of withholding wages, prompting a flurry of emails and social media posts from angry school teachers and staff, as well as a planned protest that was canceled after the special meeting.

Contracts containing raises for administrators, custodians, secretaries and clerical assistants took effect July 1, which is why the school department asked town Treasurer Mary Alice Cullen to pay the higher wage rate despite not having an approved budget in place to account for those raises, McNaughton said Wednesday.

A union contract containing raises for teachers takes effect Sept. 1, he said.

The new fiscal year for 2023 started July 1, but there’s no vote planned for residents to approve a new school budget. The school board has suspended the budget process without delivering a balanced budget to the town for approval, and the town continues to bar the school department from spending its federal COVID relief funds.

The latest skirmish over school department finances dates back to November, according to Town Council Chair Steve Golieb. That month, town officials said McNaughton refused to hand over control of school bank accounts that contained $630,000 to the town treasurer, in violation of state law.

The bank accounts, which dated back to 1969, are now under Cullen’s control, but other questions persist about whether the school department’s international program has reliable revenue, when a new school budget will be in effect, and whether there will be any penalties if the town continues into the coming school year without approving a new budget.

State law requires that the school department operate on the previous year’s budget until a new one is in place, but Golieb said he worried that the town would face legal liability for approving the Wednesday payroll warrant because it included wages for new positions and line items that voters had not yet approved.

The school board voted to approve a budget proposal at a June 14 meeting where two board members resigned after members of the audience and the president of the teachers’ union accused them of mistrusting McNaughton because they had asked to delay a vote to discuss some of the numbers behind the 2022-23 budget.

But since then, the school board has halted the budget process, the Lincoln News reported Thursday.

The board voted 3-0 at a special meeting on June 29, following an executive session, to suspend the budget process until McNaughton received access to a bank account containing carryover funds from last school year.

McNaughton, who became Millinocket’s superintendent last July, did not respond to a request for comment on Friday.

Golieb and Town Manager Peter Jamieson said the school department had access to all of its accounts, and said that they did not know what account McNaughton was referring to, in emails between the Town Council, McNaughton and school staff that the Bangor Daily News reviewed.

In addition, an order directing Cullen, the town treasurer, not to approve any school department spending of COVID relief funds remains in effect, Golieb said.

Town officials voted last month to stop payment on those COVID funds because the school department hadn’t reimbursed the town for any of the money it had loaned the department in anticipation of receiving the federal funds, and because the town had not received details about how the school district was using the money.

The school department bought a John Deere tractor, repaved a parking lot and bought a new auditorium curtain and new lunch tables with the funds, according to school board meeting minutes.

A Maine Department of Education spokesperson said at the time that the agency anticipated receiving a new COVID fund application from the school department soon, but did not respond to a question about the status of that application on Friday.

Approval of the application would allow the state to release the federal funds designated for the Millinocket School Department.

There have been two recent occasions in which Millinocket voters did not approve a school budget until after the fiscal year began, according to town records.

Residents approved the school department’s fiscal year 2022 budget in a July 20, 2021, vote, and the previous year’s budget in a July 28, 2020, vote, well past the July 1 start of the new fiscal year, according to past ballots.  

In those circumstances, Golieb said, the school department operated on the previous years’ budgets until voters approved new budgets without any problems.

Cullen did not respond to a question Friday about a legal penalty if the town didn’t approve a school budget.

The Town Council will hold a special meeting sometime in the next two weeks with the school department and school board to discuss the budget approval process, Golieb said.

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Lia Russell

Lia Russell is a reporter on the city desk for the Bangor Daily News. Send tips to