AUGUSTA, Maine — A bill that would alter Maine’s complicated education funding formula by shifting some state funds to rural school districts and away from urban areas passed through the House and Senate this week and now awaits the governor’s signature.

LD 1274, sponsored by Senate President Kevin Raye, R-Perry, passed with ease in the House on Tuesday (84-56), but the vote was much narrower in the Senate on Wednesday (17-15).

Unlike many bills this session, the votes were not dictated by party lines but by geographic ones.

Raye’s bill addresses what he calls inequities in the Maine Department of Education’s Essential Programs and Services formula. The four changes are:

• Basing a school district’s fiscal capacity on the most recent state valuation or the average of the state valuation for the three years prior to the most recently certified valuation, whichever is lower. This helps protect school administrative units that experience sudden increases in property valuation.
• Reducing the staff ratios for school districts with less than 1,200 students by 10 percent. This applies only to support and administrative staff, not teachers.
• Removing the reduction of federal Title I funds from the calculation for teacher salaries and benefit costs from the EPS per-pupil rate.
• Removing benefit costs for teachers and staff from the calculation of salary to address regional differences in teacher salaries.

“It is an urban formula foisted on a rural state, and it has had profoundly negative consequences for the goal of affording a sound education regardless of a child’s ZIP code,” Raye said of EPS during testimony before the Legislature’s Education Committee earlier this session.

Although Education Commissioner Stephen Bowen cautioned earlier this year against making small changes to EPS for fear of unintended consequences, Deputy Commissioner Jim Rier said this week that his department has supported the bill from the beginning.

Rier said the change represents a redistribution of less than 2 percent of $914 million in education funding and does not apply until 2012.

While the redistribution amount is small, school departments in service centers such as Portland and Bangor are bearing the brunt of that redistribution.

Bangor Superintendent Betsy Webb said LD 1274 would result in a loss of about $187,000 in funding to Bangor.

“We don’t think it’s something that should be tinkered with,” she said.

Sen. Justin Alfond, who represents Portland and is the ranking Democrat on the Education Committee, said his school district could lose up to $1 million. He said he and other legislators preferred an independent review and analysis of EPS that could offer more substantive wholesale changes.

Senate Democrats expressed disappointment with the changes on Wednesday.

“I feel strongly that this was not a thorough debate. It’s bills like this that are going to sneak up on people,” Sen. Seth Goodall, D-Richmond said before the vote.

“Taking money from growing schools and giving it to shrinking schools does not make a lot of sense to me,” added Philip Bartlett, D-Gorham.

EPS originally was developed as a way to ensure that students in all Maine schools received a fair share of state education dollars by defining programs that helped students meet the state’s Learning Results. Under EPS, the state pays for a specific list of programs and municipalities pay for programs and services that aren’t on the list, such as sports.

When LD 1274 first went to the Education Committee, Raye said the funding formula, while well-intentioned, has been enormously detrimental to education in rural areas. He presented data for the four-year period between 2004-08 when EPS first was used that showed the town of Yarmouth with an increase of $1 million, or 116 percent, in its state aid, despite a dip in enrollment.

Nearby Cumberland saw its funding jump by 95 percent and Brewer increased by 62 percent, according to Maine Department of Education data.

In that same four-year period, Jonesport lost almost $500,000, a decrease of more than 95 percent. During that same time period, other rural, coastal communities took similar hits. Steuben lost 67.6 percent of its subsidy, Lubec lost 47.7 percent and was forced to close its high school, Eastport lost 39.3 percent and Machiasport lost 36.4 percent.

Changes to EPS have been suggested in past legislative session but have never had majority or administrative support. Adrienne Bennett, spokesman for Gov. Paul LePage, said the governor plans to sign LD 1274.