Local schools hit hard by cuts in subsidy

A sudden reversal of fortunes for area school districts hit school and municipal officials late last week, as preliminary state subsidy figures that had previously indicated districts would receive more funding now show almost all of them will lose funding. For towns that have wrestled with keeping their schools open because of the increasing costs borne by local taxpayers, the potential losses in funding will mean tough decisions later this year. Particularly hard hit are Eastport, which is projected to lose about 75% of its state funding, Calais and Baileyville, which would each lose over $200,000, and smaller towns such as Robbinston and Alexander, which would not lose so much money but have been facing tough battles over school costs.
"It's a disaster for all of us," says AOS #77 Superintendent Jim Underwood. "I don't see how all of us can continue to function."
When he saw the new figures on February 3, "to say the least I was shocked." Under subsidy print-outs that the Department of Education sent to superintendents last September, all of the school districts in AOS #77 were to receive greater subsidy amounts this coming year. Lubec was to receive the most additional aid, $84,054, and Eastport the second most, $34,048. But under the February preliminary figures, all of the districts in the AOS will lose funding, except for Lubec.
Underwood has since spoken with Department of Education officials, "expressing my utter distress that this is happening." He adds, "I can only hope that once the clear inequity comes out there will be adjustments that will make significant changes."
Closing schools would not help, since the AOS conducted a study last year for two districts that showed that the cost to send students to another school would be more than the present local school budgets. The tuition and transportation costs, along with the special education costs that would have to be borne by the sending town, would be greater than the costs for running a school in the town. "We're down to almost as low as we can go to educate our children, whether the towns have schools or not," says the superintendent.
Whether the loss of state subsidy could be picked up by increasing local property taxes is questionable. Eastport City Manager Jon Southern comments, "With a record number of foreclosures, a record number of payment plans for taxes and sewer costs and where taxes are driving people away to live in other communities, there's a limit on what we can sustain in terms of taxes."
The city manager notes that councillors have been reluctant to discuss even a small increase in funding for the schools. "This is a massive increase," he says, doubting that councillors would support raising locally the amount that the state cut. "To ask taxpayers for that kind of an increase -- can we do it morally?" the city manager asks. "That would be quite devastating to this community."
To cover the potential school subsidy loss would require perhaps a 14% increase in the mill rate, and with possible increases in the ambulance service, solid waste and hydrant rental fees, Southern says a 20% to 25% increase in local taxes could be possible. "That would be in the higher category in the whole of New England."
Underwood says his office is checking with the state to make sure it has the correct figures for Eastport's enrollment. The data shows a 1% drop in property valuation and a 7% reduction in student enrollment for Eastport. Two of the major factors in determining subsidy amounts are property valuation and student enrollment.
For comparison, Underwood notes that a wealthy southern Maine school district, York, had a 1% decrease in property valuation and a 2% decrease in student population, yet would be receiving $184,000 more in subsidy. Calais' factors are almost the same as York, with a 1% increase in property valuation and a 1% decrease in student population, yet Calais faces a $204,000 loss in subsidy. "It doesn't make sense," says Underwood.
Baileyville, which had an 11% increase in property valuation and a minimal decrease in student enrollment, faces a possible subsidy loss of over $250,000.

A kick in the teeth
Southern says the sudden change from the preliminary numbers in September, which showed a $34,000 increase for Eastport, to the $309,000 loss, "is a kick in the teeth to the legislation" that was signed into law outside of Shead High School last July by Governor Paul LePage. "They guaranteed it would increase funding to Eastport schools," recalls Southern. "It makes a mockery of the legislation that was passed last year."
The city manager is hoping to meet with Senate President Kevin Raye of Perry, Rep. David Burns of Whiting and the commissioner of education to discuss the city's concerns and find out why there was such a large cut.
Under that new law, which was sponsored by Raye, an additional minimum subsidy amount is provided for communities suffering from being property rich but with a low-income population. It provides additional subsidies for high-valuation minimum receiver communities with a greater than state average percentage of students qualifying for free and reduced lunch. Among the districts receiving the economically disadvantaged student adjustment are Lubec, with $82,748, and Whiting, with $26,021, under the latest preliminary figures.
The new law also removes a provision that had subjected state reimbursement for school personnel benefits to the labor market index, which had resulted in schools in lower income areas being reimbursed at a lesser rate than wealthier communities. Finally the law added a new provision allowing for a 10% variance in the staffing ratio for school districts with fewer than 1,200 students, recognizing that smaller districts cannot achieve the economies of scale enjoyed by larger districts.
Underwood notes that the law "was supposed to help us out, but it didn't, in my opinion." He adds, "An awful lot more work needs to be done with that funding formula. It's not helping us at all like it was supposed to. There is still tremendous inequity in the funding. The districts that need the help the most aren't getting it." He points out that the districts in AOS #77 are spending less per student than most districts in the state. "We're looking to find some pressure to redistribute those dollars," he says of the DOE's preliminary funding numbers. "It's clear we need the assistance the most."
Because of pressure by the state to cut costs, AOS #77 reduced its special education costs in its 11 districts by $650,000 last year. Cuts included reducing the number of special ed directors from two to one and reducing the number of support staff, along with local special ed costs. "Because of that cut, it reduces what we are eligible for in return from the state," says Underwood. "We have been forced into making significant cuts across the board, but it means less money coming back in reimbursement. We've cut everywhere to the bone, so we get significantly less from the state."
In addition, any federal Title 1 funds that a district receives are being subtracted from what it will receive from the state. Underwood notes that Title 1 funds must be used for additional reading and math support programs and cannot be used for regular educational programs. "It's unfair," he notes of that reduction by the state.
Possible options to save more on costs could include sharing staff such as special education staff among schools and sharing more resources. "But I don't think there's much we can do," the superintendent says for additional cost savings.
"I implore the legislature to look hard at what this is doing to our children," says Underwood of the state funding, which, at 45.7% of the cost of K-12 education in the state, falls short of the state's target of covering 55% of the cost. "I think it's a matter of priority. I would say to legislators if their priority really is your kids and providing an appropriate education in all parts of the state, well then they need to take a look at that budget. They can redistribute the way the money is spent. Public education isn't a priority -- that's the problem."