School aid cuts pegged to value

Posted Nov. 21, 2008, at 9:10 p.m.

AUGUSTA, Maine — A few small school districts will see no decrease in state aid under Gov. John Baldacci’s proposed cuts in General Purpose Aid to Education, but others will see double-digit percentage cuts that translate into hundreds of thousands of dollars in reductions.

“We ran the reductions through the school funding formula,” Education Commissioner Susan Gendron said in an interview. “Some very small receivers get no decrease because they received so little.”

For example, the town of Beals in Washington County only gets $132.53 in subsidy and will see no cut. Neither will Jonesport, which receives $23,632.43. But neighboring Jonesboro will lose $12,744 in general purpose aid out of its total state subsidy of $371,237.21.

Spreadsheets released by the Department of Education indicate 16 districts will see no decrease in aid, and the largest dollar decrease is in the subsidy to Portland, which will lose $1,836,816, a cut of 12.3 percent.

According to the spreadsheet, the largest receiver of aid from the state is Lewiston, which is scheduled to receive just over $30 million this year. Lewiston would lose $544,000 under the governor’s proposal.

Bangor will lose $531,348 under the proposal, Brewer will lose $162,648 and Presque Isle’s SAD 1 will lose $139,020.

The spreadsheet listing every school administrative district and the dollar amount of their loss is posted at http://www.maine.gov/education/data/eps/fy09/eps0809.html .

“The formula takes into account a number of factors,” Gendron said. “But the principal factor in the formula is the property valuation of a community.”

She said that under the funding law, the higher the property valuation, the greater the assumption that a municipality has a greater ability to pay for its schools. In general, she said, the state pays a higher percentage of costs for communities with low valuation and a lower percentage of costs for those with high valuation.

Problems with the formula that were discussed when it was adopted is that valuation is not always a good measure of the wealth of a town and the data used are two years old. Some communities have a lot of waterfront acreage that has high value, but there is little commercial property to help pay the property taxes.

Gendron said another factor in the complex school funding formula is special education costs. Most communities will see a reduction of state subsidy for special education from 50 percent to 45 percent. But small communities that have no special education costs are getting 5 percent of their operating costs as a subsidy from the state, and those amounts are not reduced under the proposal.

“As we understand it,” said Dale Douglass, executive director of the Maine School Management Association, “they are using the same formula to distribute the cut as they use to distribute aid. That certainly means different units are impacted differently.”

He said school superintendents started to respond to the likelihood of a cut in this year’s subsidies last month, when Gendron informed them she would recommend that general purpose aid be frozen at current levels for the new two-year state budget.

“Superintendents have instituted hiring freezes and spending freezes and those sorts of things to be ready for this sort of cut,” Douglass said. “You can be sure that they are going back to their budgets to see where they can further reduce spending.”

With the state revenue problems, he said, schools have to assume the Legislature will reduce subsidies in the supplemental budget. The latest projection is the state will be $140 million short in this budget year and $331 million below estimates over the next two years.

Gendron said Governor Baldacci will propose that this year’s reductions in school aid carry forward into his proposed two-year state budget. But whatever the Governor proposes in either budget will face lengthy debate and discussion by lawmakers before it is approved, and changes are certainly possible.

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