The controversial Phase II school construction plan is creating an unusual budget year for the Groton school district.

Superintendent of Schools Paul Kadri has prepared two budget proposals this year, based around whether the building plan passes in a May 2 referendum. If it fails, the schools budget would be about $1.4 million more, according to Kadri's plans.

The first budget, which assumes voters will approve the Phase II plan, calls for $73.4 million in spending, a 1.12 percent increase over the current year's budget. The second, based on voters rejecting the plan, calls for $74.8 million in spending, a 3.02 percent increase over this year.

Phase II calls for the construction of a new middle school for all the town's seventh- and eighth-graders at the site of the Claude Chester Elementary School. It also calls for the conversion of two schools, West Side Middle and S.B. Butler Elementary, into early education centers, each of which would house about 600 Pre-K, kindergarten and first-grade students.

"Right now, Phase II saves money," Kadri said. "That's great, and that's the way I designed it: For the next three years it actually saves money because we're running at artificially low staffing levels."

Anticipating the need for fewer teachers under Phase II - especially at the middle school level due to the proposed consolidation - the Board of Education authorized an early retirement incentive earlier this year.

Kadri said his budget savings come from salary accounts because the plan would leave some positions unfilled and replace retiring teachers with newer teachers who can be paid less.

The budget that assumes Phase II will fail requires the Board of Education to maintain its current staffing levels, which come with an increase in salary and benefit costs.

"If we run as we are now, I have to replace those people who I don't have to replace under Phase II," Kadri said.

Last year's Groton schools budget ultimately came in at a zero percent increase. The year before, it required a 1.5 percent spending increase.

This year's budget largely maintains current services and does not include the purchase of new equipment.

"Overall, it's not a budget that is adding new things," Kadri said. "There's no new staff, no equipment in the budget. It's a tight budget, but a budget that has academically what we need to move certain initiatives forward, especially in terms of early literacy and middle school math."

m.collette@theday.com