NORTH SMITHFIELD — The town is asking the state auditor general for special permission to exceed the state’s taxation cap in order to be able to operate the new middle school now being built on Providence Pike.

The School Committee says it needs $821,000 more than the state’s taxation cap allows in order to staff and maintain the 105,000-square-foot building, but the Town Council has only agreed to seek permission for a $474,000 waiver. That represents the estimate that was provided to voters when the bond went for a vote in April 2006.

So far, the School Committee has proposed a $20.6-million budget for 2008-09, a 3.83-percent increase — $760,000 — over this year. It calls for eliminating five teaching positions at the high school, 5.5 teaching assistants, three clerks, two special education teachers and other cuts to be determined.

School Committee Chairman Robert Lafleur said when the $474,000 figure was mentioned in 2006, it was the best available number at that time, but increased costs and more specific information developed since then led to the $821,000 figure.

“We’re not pleased about it, obviously,” Lafleur said. “We’re looking at the budget and trying to see what we can do.”

The $20.6-million budget does not include money for the new middle school. However, Lafleur said things are still in motion, as the town awaits word on its state aid figure and gets more accurate figures from some of its contractors. For instance, an expected 15-percent increase in health insurance costs may wind up being around 7 percent, he said.

As more revenue and expense figures come in, the town will have a better handle on how much it will need to finance operations at the middle school.

“It will be very interesting,” Lafleur said of the ongoing budget process. “But that building will open on time.”

The new school, and its impact on the school budget, is butting up against the state’s new taxation cap, now in its second year. Unlike past state-imposed spending limits, the current version strictly restricts the amount of money a town can raise via its property tax.

For the next fiscal year’s budget, the town can only raise its property tax rate to produce 105 percent of what was raised this year. That means for the 2008-09 budget, the town can only generate $1.07 million more in property taxes for all town government and school operations, unless the auditor general gives the town permission to exceed that amount. Even if Almonte singed off on it, the waiver would then have to be approved by a super majority of four of the five members of the Town Council.

Auditor General Ernest A. Almonte said his office had received North Smithfield’s request and his staff was reviewing it. He said until he saw the staff review, he would not comment on it. While the town may be the first to seek such a waiver, Almonte said he had no illusions that it will be the only one.

“We are expecting letters any time now,” he said. “We can hear the rumbling. We can feel the pressure.”

Town Administrator Robert B. Lowe said the town is not asserting a new school by itself justifies a wavier. He said North Smithfield’s problem is that it planned for the new school and got voter approval before the new taxation cap was announced. Had the town known the cap was coming, it would have planned differently, he said.

Lowe said the town needs to increase its taxation income because the new middle school is adding a new building to the town, not replacing an existing one. If the town were knocking down an older building, he said that would be a different case, since staff from that old building could be moved in.

The taxation cap law does have provisions for emergencies in which municipalities may exceed this year’s 5-percent limit. They include a loss of non-property tax income for the town, unexpected health insurance or utility costs that are three times the cap’s limit, an increase in debt service that is greater than the allowed increase, or “substantial growth in its tax base as the result of major new construction that necessitates either significant infrastructure or school housing expenditures.”

It is not clear whether the need for the middle school would qualify under the increase-in-tax base/new construction provision.

jhill@projo.com