BATH, Maine — A flap over how much member towns in RSU 1 must pay for public education has triggered a school board decision to adjust the formula for the upcoming budget year, though differing legal opinions suggest the debate is far from over.
RSU 1, which includes Bath, West Bath, Phippsburg, Woolwich and Arrowsic, was created in September 2007 just as a statewide school administration consolidation law enacted under Gov. John Baldacci was being implemented. The unit adopted a cost-sharing formula that is based one-third on a town’s pupil count, one-third on the town’s population and one-third on the town’s property valuation. That formula stemmed from the legislative bill known as LD 910, which is how the formula is referred to now.
But some in the district say the formula has not been applied correctly, resulting in some towns being overcharged and others undercharged. In essence, the one-third/one-third/one-third formula has been applied only to the district’s costs that exceed the state’s Essential Programs and Services model, which the Department of Education uses to determine state subsidies for education. The rest was calculated according to the state’s EPS funding methods.
West Bath Town Administrator Jon Davis said his town has paid about $1.9 million more than it should have from 2007 until now.
“Obviously, we want to support the schools, but we want the letter of the law to be followed,” he said. “We want a system that’s fair to everyone.”
RSU 1 Superintendent Patrick Manuel, who has been in his post since last year, said his district’s board, after receiving a legal opinion on April 20 advising them to do so, voted last week to revert to the LD 910 method.
“Some towns feel like we were doing the one-third/one-third/one-third all along,” he said. “If the district from Day 1 had applied [the funding formula] the LD 910 way, there are some towns and communities that could look at it that they were overcharged or undercharged. We’re trying to see how we can move forward with this.”
The formula adopted last week resulted in major changes in the amounts each town will pay for the 2012-13 school year:
• Arrowsic’s increase will balloon from 5.5 percent over last year under the old formula to 16.3 percent under the new one, a $69,000 increase, for a total of $495,300.
• Bath’s increase will jump from 1.5 percent under the old formula to 5.66 percent under the new one, a $460,600 increase, for a total of about $8.6 million.
• Phippsburg would have seen a 1.7 percent decrease under the old formula but will see a 9.8 percent increase under the new one. That’s an increase of $268,000 for a total of almost $3 million.
• West Bath, which would have seen a 0.8 percent increase under the old formula will have its share of RSU 1 costs under the new formula plummet by almost 16.8 percent, a $435,000 drop for a total of nearly $2.1 million.
• Woolwich, which would have had a 9.9 percent increase under the old formula, will see a 2 percent increase in the new one, a $62,000 jump to about $3.1 million.
The issue came to light this year when Woolwich realized that it would be responsible for about $303,000 if a proposed RSU 1 budget increase of $475,000 was approved.
“We started looking into how the RSU was divvying up the budget and realized that only 12 percent of the cost was being figured by LD 910,” said Woolwich Town Administrator Lynette Eastman. “Just a couple years ago, we took it on the chin with a 12 percent increase. This time it was just like, ‘Enough is enough.’”
David Connerty-Marin, spokesman for the Department of Education, said the state for the most part lets municipalities develop their own cost-sharing methods. He said the department has been providing information to RSU 1 towns when it is requested but otherwise is not involved in the dispute.
Bath City Manager William Giroux said neither formula treats Bath fairly. Under the old formula, Bath paid more than the EPS formula expects any municipality to pay based on the property tax percentage it devotes to the school budget. That triggered a rebate from the state, but the rebate was given to the district and spread among all the towns, according to Giroux. Under the new formula, the state’s tax rate cap doesn’t apply to Bath.
“Under this new interpretation, we’re going to pay a lot more,” said Giroux, who said the result will be that Bath will become one of the top five municipalities in Maine in terms of the percentage of property tax it devotes to education.
Attorney Patrick Scully of the Portland law firm Bernstein Shur, who was hired by the Bath City Council, agreed with Giroux’s assessment in an April 20 written opinion. But an attorney who was hired by the RSU 1 board, Bryan Dench of Skelton Tainter & Abbott in Auburn, came to a different opinion, namely that the straight one-third/one-third/one-third formula is what LD 910 intended.
“To prepare a budget and assess the municipalities otherwise would violate the law as it presently stands,” wrote Dench in an April 20 opinion.
It’s unclear what led the district to use a cost-sharing formula other than the one described in LD 910 — even for some of the municipalities involved.
“We just can’t wrap our heads around it,” said Eastman.