Officials in county support bill to revise school funding formula

Legislation proposing changes in the state's school funding formula received strong support from Washington County officials and residents, along with school representatives from throughout the state, during a hearing by the Education and Cultural Affairs Committee on March 9. Following a work session on March 19, the committee voted 11-2 to recommend an amended version of the bill, which will now be considered by the full legislature.

Changes to the state's Essential Programs and Services funding formula have been urged for years, and while the bill would make some modifications it would still have the formula rely to a large degree on property valuations in determining a community's ability to pay for education. Simulation modeling indicated that the legislation, before it was amended, would result in Washington County receiving approximately $2.36 million more in annual state subsidy.

MaryEllen Day, superintendent of the Sunrise County School System, AOS 77, submitted testimony stating that the district loses state subsidy because the area has high-valued ocean frontage but local wages do not reflect how much houses are selling for. "Relying on just property values to determine wealth, or ability to pay, has hurt my district tremendously." She noted that at least five teaching positions will be cut this year within the school system and that some of the schools don't have counselors, music, physical education and other programs that more affluent areas can afford. The cost of education drives taxation higher, and people "are being driven from their homes."

Area school officials have argued for years that using property valuation as a measure of a town's ability to pay hurts small, rural areas because they may be land rich with a depressed economy. For instance, in this area in 2022-23 the state school subsidy covered nearly 65% of the Calais school department's $9.5 million budget, while only providing 12% of Lubec's $2.4 million budget and 11% of Eastport’s $3.2 million budget, with both of those communities having high coastal property valuations.

In her testimony, State Senator Marianne Moore of Calais stated, "Every time a school in my district loses a program, cuts a specialist or eliminates an elective because the state formula did not provide what was needed, it sends a message to families. The message clearly says: There may not be a future here for your children. We cannot afford to keep sending that message."

She said the changes proposed in the bill would correct structural flaws in the funding formula that have compounded over the years. The communities in her district "have absorbed those cuts quietly, with the resilience that defines rural Maine. Resilience is not a funding strategy, and it should not have to be," she said. She added, "Strong schools are one of the most powerful signals a community can send that it is worth investing in -- worth staying for."

LD 2226 would seek to address equity and fairness issues identified in a recent report by the Maine Education Policy Research Institute, which had been directed by previous legislation to recommend changes in the formula. The bill proposed revising four sections of the formula: updating how the formula calculates regional salary differences to better reflect the cost of living and hiring educators in different areas of the state; adopting a new ability to pay model that factors in the relative poverty rate of a community to better calculate the local contribution to the cost of education; adding poverty-based student weights so that districts with higher poverty levels would receive more resources per student; and adjusting special education funding to better reflect actual district costs. The amended version of the bill removes most of the provisions related to changes in special education funding and specifies that the ability to pay calculation must be adjusted by 10% for relative income using a poverty indicator based on the number of economically disadvantaged students.

Jason Judd, executive director of Educate Maine, noted that one of the most important changes proposed in the bill is the variable weight for students identified as economically disadvantaged. "According to the Education Law Center, Maine high-poverty districts receive 15% less per pupil than low-poverty districts, placing Maine 43rd among its state peers in terms of state funding distribution." The funding changes would support high-poverty districts, many of which are in rural Maine, he noted.

State Rep. Tiffany Strout of Harrington observed that the towns that she represents are in one of the most economically challenged corners of the state. "Washington County carries a poverty rate of approximately 18% -- the highest of any county in Maine -- and childhood poverty in our county reaches close to 27% among families with young children." She noted a few examples of the degree of poverty in the area, including that 89% of the students in Whitneyville qualify as economically disadvantaged, with Machias at nearly 70%. Among other adjustments, the bill would insert an income indicator, based on the percentage of economically disadvantaged students, into the calculation of school district's required local contribution. By using a blended property valuation and student poverty level approach, which correlates with household income, the bill would help "reduce the crushing property tax burden on families in like Jonesport, Machias and Harrington, while more accurately measuring what communities can genuinely afford to contribute," she stated. If the funding formula is not modified, she said that people who have lived in their homes and owned land for generations "will be taxed out of their homes, which will move them away from their jobs, creating more economic hardships for them and the community. This bill provides an opportunity to answer the question of not whether Maine's rural students deserve equitable opportunity -- but whether our funding formula will finally reflect that they do."

While the bill did receive strong support, some municipalities opposed it, including the Town of Scarborough, which would stand to lose about $1 million in funding.