The state provides partial funding to support local school costs in Maine through a formula called the Essential Programs and Services, or EPS, model.
Although there are many critics of the formula, I am, for the most part, supportive of this method. Basically, it allots $1 billion or so of state aid each year based on two major factors: student enrollments and property valuations.
The formula, of course, is much more complicated than that, but it basically considers two main drivers in determining how much money a school district needs to educate its students and what portion of that cost local taxpayers can afford to pay.
By considering primarily enrollment and property values, however, the formula misses a major factor that could help the state more accurately distribute school aid based on local taxpayers’ ability to pay.
The first measure the formula considers, student enrollment, makes perfect sense because the more students a school must serve, the more aid it will need. The second factor, property value, is a “proxy” for a community’s ability to pay for education locally. As with any proxy method, it sometimes hits the mark and sometimes misses it by a wide margin.
The one essential measure missing from the formula is a community’s median family income, a more accurate measure, in my opinion, of an ability to pay for schools. While it’s true that the formula does include some limited funding for a district’s poverty rate, that weighted measure is dwarfed by the property valuation factor.
Many school districts in Maine are minimum receivers whose property values are so high that they receive a minimum subsidy, usually less than 5 percent of their actual operational costs. My district, RSU 13 in midcoast Maine, receives about 12.5 percent of its costs from the state — about $3.4 million toward our $27 million budget for the 2013-14 school year. Our actual costs, as calculated by the EPS formula, are at about $22 million. (How the state arrives at the EPS calculation could take another two articles to explain!)
Many of our neighbors on the coast, including Vinalhaven and Camden, are minimum receivers, and yet a few miles away from the coast, at RSU 40 in the Waldoboro area, the receiving rate is about 42 percent, according to the Maine Department of Education.
Farther inland at RSU 9 in the Farmington area, the state contribution rate is about 68 percent. In RSU 9’s case, the property value “proxy” does mirror the district’s low median household income (the mid-$20,000 range). The state’s median household income, according to the U.S. Census Bureau, is $47,898.
In Cape Elizabeth, the household income exceeds $100,000 and is among the highest in Maine. For the 2013-14 academic year, Cape Elizabeth is receiving about 16 percent of its EPS-calculated costs from the state, about the same percentage as RSU 13. Our communities of Rockland and Thomaston, meanwhile, have median households incomes of $33,038 and $39,784 respectively, according to U.S. Census data.
It seems terribly inequitable to have two school districts of such differing means receive the same percentage of assistance from the state.
When property values miss the intended purpose — ability to pay — real people in real communities pay a high price. I have nothing against the residents of Cape Elizabeth at all but I use their family income of more than $100,000 as a way to illustrate how the formula sometimes works in mysterious ways.
The solution to the inequities in the formula is not terribly difficult but would require political courage. The EPS formula needs to include median family income, to some degree, as a factor that approximates a community’s ability to pay for school costs.
Such a change is the right and fair thing to do and would involve a minor tweak of the existing statutory language. Agreeing on how much to weigh that factor won’t be easy, but neither is paying a high property tax on a very low income.
As lawmakers debate recommendations for EPS formula changes next session, I hope they can muster the will to do the right thing and consider adding family income to the formula.
Lew Collins is superintendent of Regional School Unit 13, which serves students in Cushing, Owls Head, Rockland, St. George, South Thomaston and Thomaston.