How to handle a $40 million school budget — ratified months ahead of other annual town budgets — during a recession. That is the vexing question now facing school and finance committee leaders across the Island.

Move the town budget season forward? Push the school process back? Scrap the current budgets and start over with a fixed, lower bottom line?

Many ideas were thrown out at a meeting of school leaders and 16 all-Island finance committee members at the Martha’s Vineyard Regional High School last Thursday. But the meeting broke up with little consensus.

Meanwhile, with a letter requesting level funding for schools from the West Tibsury finance committee joining others from Edgartown and Oak Bluffs on the desk of school superintendent Dr. James H. Weiss this week, the message remained clear: cut.

Tisbury finance committee member Jon Snyder chaired last week’s meeting, which took the form of a question and answer session between committee members and high school principal Stephen Nixon and Mr. Weiss.

The administrators fielded questions on a $3.5 million superintendent’s shared services budget, an increase of 3.6 per cent over 2008, and a draft $16.8 million high school budget, up 2.6 per cent over the current year.

Incoming principal Mr. Nixon stated that with payroll increases negotiated by unions, and a raft of other fixed costs, a flat budget translates to staff cutbacks.

“Zero means cuts. That’s what zero means. There’s very little wiggle room,” he said, adding: “The only part of personnel I can control — the only thing I can do — is cut. And there’s a cost attached to that somewhere else. Whether it’s overcrowded classrooms, lower SAT scores, there’s always a cost.”

Mr. Nixon described an already spare budget but also addressed the falling enrollment at the high school, which dropped 47 students in 2007 and is set to continue a downward trend.

“Based on when people think they’re going to retire and when programs cycle out, I’ve looked at 10 per cent cuts over the next three years, to reflect a 10 per cent drop. I’ve done that on paper, mostly through attrition,” he said.

But Thad Harshbarger, an Oak Bluffs finance committee member, was unconvinced.

“What’s happening tonight is you’ve said what you need to do, what happens with various programs, that kind of stuff. It’s irrelevant to our interest,” he said, “I’ve got a town with a total income that’s going to decline.”

Several members addressed the possibility of reopening union negotiations on staff pay increases which range from five to seven per cent.

“I haven’t had a seven per cent raise in the private sector in years, especially the last couple,” said West Tisbury finance committee member Brian Athearn.

Mr. Weiss responded. “These are multi-year contracts agreed to two years ago; it is a contractual obligation,” he said. “If somebody asked me would you consider going to the union and asking them to reopen negotiation, I’d say I’ll do it the moment the town does.”

Alexander DeVito of West Tisbury noted that his town does not have union employees.

“Some people in our town have talked about maybe forgoing their COLA,” he said, referring to a standard cost of living pay increase. “We are in very, very severe times.”

Mr. Weiss argued that such requests should have come sooner, pointing out that he sent letters to all towns advising that the budget process would begin with a series of meetings in August. The meetings were poorly attended.

“If there’s one Islandwide body that spends $40 million it’s us,” he said, “I’d think if the chief executive office of a $40 million operation said they were starting in August I’d come to the meeting. I’d come. I know I’m being petty but it really bugs me.”

Fred Condon, a finance committee member from Edgartown, argued that it is unfair to ask the schools to alter their budgets based on estimates.

“There’s lots we don’t know. We don’t know what the tax base will be until the third quarter,” Mr. Condon said, adding: “How can the school make decisions before they know about the towns? It’s hard to do without knowledge.”

Under Massachusetts General Law, Island schools have until Dec. 31 to apportion budgets and send them to the town treasurers. Meanwhile, town budget season doesn’t begin in earnest until after the start of the new year.

Mr. Condon made several suggestions on how to improve the process between schools and towns. The finance committee could provide guidelines on school union negotiations, he said. The school could deliver a place-holder bottom line to treasurers in December, satisfying the state requirement, but actually decide the budget with other municipalities in the spring. A splinter group from the all-Island finance committee could be formed to focus purely on the school issue.

Frank Yeomans, a finance committee member from Chilmark, suggested the school attempt to tackle the budget from the bottom line backwards.

“Have you considered doing this from the other direction?” he asked, “Set the amount of money you’ll spend say of two per cent and work from there? A lot of businesses do that.”

Despite the multitude of suggestions from individual committee members, the meeting broke up with little sense of what happens next.

“There’s no action plan leaving here,” said Mr. Condon, “what happens is it gets more intense and the differences become more misunderstood.”

Speaking this week, Mr. Harshbarger was more upbeat about cooperation from school leaders, but his economic outlook remained bleak.

“I think they’re paying attention,” he said of school leaders, adding: “We want to support the school and they need to take care of the kids, but there may be actual limitations this year.”

He defended his no-show at Mr. Weiss’s preliminary budget meetings: “There are limits to what we can do — in August we’re a month into this [fiscal] year,” he said. He also noted that the finance committee has told all municipal departments that they are expecting zero per cent increases.

“There’s a hiring freeze, we’re cutting back on services, no new spending. We’re in tough, tough shape,” he said.

Mr. Harshbarger lobbied to establish September estimates for town budgets in Oak Bluffs. He said these formed the basis of the finance committee’s call for level funding.

“I got the estimate thing introduced because I was sick of running up against them [the schools],” he said. “And so we can say to West Tisbury and Aquinnah what we can afford — we’re trying to draw in the other towns early on.”