A proposed budget that puts the Bonner County School District $1 million in debt next year was called illegal by the state Department of Education.

A state team was called in to review district operations and go over its budget last month. Patrons were concerned about where district officials were spending money after the district announced it would be $544,000 in the red this year.

Instead of cutting spending in next year’s budget as directed by the school board, Superintendent Max Harrell and district officials drafted a plan that puts it further in debt.

“We see no evidence of a plan to develop a balanced budget,” wrote Jim Smith, who is heading the state team that is reviewing the district.

Smith sent a memo to Harrell on Thursday outlining concerns about the district’s budget. A major problem, he said, was state law does not allow districts to spend more money than they receive. Drafting a budget that spends a district into debt is illegal.

While the district is battling to get out of debt, it has included a 3.75 percent raise for administrators, as well as pay increases for for classified staff, and plans to hire a full-time central office administrator to replace one who worked part-time.

The district did reduce some money budgeted to administration, but did not reduce salaries or staff. “As a result, no actual cost savings will be realized,” Smith wrote. He also pointed out that the district cut the budget for legal fees - it increased $75,000 this year - but has no plan to cut legal services or expenses.

“The state does not think much of this proposal, and neither do I,” said Jerry Owens, a newly elected school trustee. “I am absolutely bewildered by a budget that puts us deeper in debt. I hope the board stands up and rejects this budget.”

Owens defeated chairman Rebecca Hawkins last month, but he won’t be able to vote on the proposed budget since he doesn’t take his seat on the board until July.

Harrell was not in the office Friday and was unavailable to comment on the state’s criticism of his budget proposal.

Nearly $600,000 of the planned deficit is due to increases given to the special education department and director Bob Howman.

Howman has been under fire this year for overspending his budget by $180,000. About $91,000 of that was spent to send one student to a drug treatment program in Montana. That has outraged patrons and teachers as has Howman’s budget increase, especially since Harrell called for a cap on spending for extracurricular activity.

“There is some concern about the special services department,” said trustee Teresa Asbill. “I would like to see the services stay at the current level they are now, considering the financial situation we are in.”

Monday, the school board will hear the results of an audit of Howman’s department.

Asbill wonders why Harrell has submitted a budget that is $1 million in the red. “I am not in support of a budget that puts us in debt, and I will most likely not vote for one.”

In May, a committee of patrons and school personnel recommended the new budget freeze salaries and hiring. Those recommendations were not followed, said Joan Head, president of the teachers’ union.

“This proposal is out of line,” Head said. “This is running us into a bankrupt situation and this superintendent is destroying our district. The school board has overlooked that and is offering him a contract for another three years.”

On April 30, teachers took a vote of no confidence in Harrell, who is the 10th-highest paid superintendent in the state, earning $80,228 a year.

, DataTimes MEMO: This sidebar appeared with the story: PUBLIC HEARING There will be a public hearing on the budget proposal at the Bonner County School Board meeting Monday at 6 p.m. at Priest River Lamanna High School.