Legislators eye bills to reform school funding

The legislature's Education and Cultural Affairs Committee continued this week to consider 11 bills to amend the current school-funding formula that were the subject of a public hearing on May 4. Rural school districts with high property valuations and declining enrollments, including many in Washington County, have been hurt for several years by the Essential Programs and Services (EPS) funding formula, losing much of their state education aid. During the seven years since the formula was implemented, Jonesport will have lost 98% of its state aid, Machiasport 97%, Lubec 93%, Cutler 73% and Eastport 65%.
Instead of enacting any of the proposed changes this year, though, Governor Paul LePage and committee members have indicated that they would prefer to have an independent review of the formula, with recommendations to be considered during the next legislative session. However, Senate President Kevin Raye of Perry says that the governor is supportive of enacting during this session the bill he is sponsoring, LD 1274, and then making additional reforms next year. "There was a significant amount of testimony in support of my bill," Raye notes, adding that six of the co-sponsors are members of the committee.
Raye believes that "if there is ever going to be an opportunity" to reform the EPS formula, now is the time, since the current administration is more sympathetic to the appeals from rural school districts and is supportive of changes.
In his testimony during the hearing, Raye stated that the EPS funding formula 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." He pointed out that, when the EPS formula was first implemented in 2005, the state added $250 million in new funding for K-12 education, yet Washington County schools still lost $2 million. "After four years of EPS, a stark and troubling disparity had emerged. For example, Yarmouth enjoyed a gain of more than $1 million -- an increase of 116.5% -- even as they lost 36 students. Meanwhile, Jonesport, which lost fewer students, lost nearly a half‑million dollars -- a decrease of 95.4%."
He points out that the EPS funding model was never intended to be a formula for distributing state education funds, but rather was intended to make sure rural schools got their fair share of funding. "However, the entire purpose of the formula was turned on its head when it was co-opted as a way to cap reimbursable local expenditures in an effort to help the state meet its 55% funding obligation," he noted in his testimony.
Raye's bill would amend four provisions of the funding act to more equitably distribute state funds for K‑12 education. He commented, "These modest reforms are designed to help rural schools that are already disadvantaged by lack of an industrial base for local taxes but are losing state dollars because of declining enrollments and/or increased property valuations that do not reflect a community's ability to pay."
The bill would allow school districts to use the most recent state valuation or the average of the last three years' valuations, whichever is lower, to allow districts time to prepare for loss of state funds because of rising valuations. Second, it would change staffing ratios that determine state funding to allow school units with fewer than 1,200 students a modest 10% reduction in staffing ratios. Third, LD 1274 would amend the EPS per‑pupil rate calculated for each school district by removing the reduction of federal Title I funds from the calculation for teacher salaries and benefit costs. Raye argues that, since the formula currently includes Title 1 teachers in the pupil‑teacher ratio calculation used to determine funding, it is unfair to then deduct the Title 1 funding from the state funding. "In essence, under the current EPS formula, a federal program designed to try to raise up disadvantaged students is being used to beat them right back down," he stated.
Lastly, the bill recognizes that health insurance and benefits are not affected by the labor market and cost the same throughout the state. The regional adjustment that is used for teachers' salaries should not be applied to fixed costs, Raye maintains, and school administrative units with lower teacher salary expenses relative to statewide averages should not receive less for their health insurance and benefits costs.