AUGUSTA — City councilors and school officials struggled Monday with how to adequately fund the education of the city’s youth while not taxing its elderly out of their homes, all while state and federal revenue continues to decline.

School officials presented their proposed $26.8 million school budget to city councilors as part of the council’s review of the total $51.5 million Augusta budget.

The $26.8 million school budget is $106,000 less than the current year’s budget.

But it would require a property tax increase of about $400,000, or just less than 2 percent, from city taxpayers, primarily because of a decrease in revenue.

According to state school funding estimates, Augusta would receive $12.3 million in state education funding, which is $470,000, or about 3.7 percent, less than it received last year.

Superintendent Cornelia Brown said that continues a trend of decreasing revenue. She said Augusta will receive $4.3 million less in state and federal aid this year compared to fiscal year 2010.

Those revenue losses include $1.9 million in state education funding, $1.3 million Augusta’s schools received in 2010 as part of the federal stimulus program, $556,000 in Medicaid and $500,000 in Education Jobs funding.

“When you add it all up, we’ve lost $4.3 million,” Brown said. “So when you look at my request from taxation and notice it trending up, I hope you understand why.”

Councilors said they understand the loss of revenue and the need for education, but said they hear from residents, especially elderly living on Social Security, who say they cannot afford to pay more in taxes.

“I have people look me straight in the face, elderly people, and say ‘I just can’t pay any more. What do you want from me? You can’t squeeze blood from a turnip,'” said at-large Councilor Cecil Munson. “It’s difficult to look them in the face and say we’ve got to go up 4 percent.”

The $51.5 million combined city and school budget proposed by administrators would raise property taxes by 3.5 percent if no changes are made by city councilors.

The city’s $23.2 million share of the budget is up $1.2 million, or 5.5 percent, over the current year, although that increase is partially offset by $777,000 in anticipated increases in municipal revenues.

At-large Councilor David Rollins encouraged school and city officials, and others at Monday’s meeting, to find ways to attract more families to Augusta to help increase revenue.

“I understand the budget concerns and the need and pressure from taxpayers,” Rollins said. “I’d like to encourage you to look at it a little differently. We need students, families. If we just keep sitting here, cutting and cutting and cutting — is that going to attract people to our community? We’re going to have to do things to attract people to this community. It’s not sustainable to just keep cutting. Let’s get active, optimistic, and get families to want to come here.”

The school budget was approved by the Board of Education in a March 28 vote, but must also be approved by city councilors.

Once set by councilors, the school budget is up for validation by voters in a citywide referendum question June 12.

Councilors are tentatively scheduled to consider a first reading — of two — on the budget and take public comment May 3, and adopt the budget, following another chance for public input, May 31.

Keith Edwards — 621-5647

kedwards@centralmaine.com