School-funding review

First order of business for newly elected or re-elected legislators is to get a copy of the new Maine Policy Review and read an article by Patrick M. Dow and Ralph Townsend called “Reforming Maine’s Education Funding Process.” The piece is an excellent introduction to what certainly is going to be a contentious issue in the next legislative session.

The article gives both a historical view of how the funding formula got into its current condition and makes several useful suggestions for improving it. Maine spends more than $1 billion annually on education for kindergarten through grade 12, and approximately $575 million of that comes from state funds. Anytime that much money is up for reconsideration lawmakers need to know the details, even if they do not serve on the Education Committee.

Mr. Dow, a graduate student in the Department of Economics at UMaine, and Mr. Townsend, a professor there, trace school funding in Maine back to 1828, but lawmakers should be particularly concerned with what has happened to the formula since 1990. It was then, with a recession beginning, that Maine dropped educational equity in favor of budgetary reality. Though the recession is well behind Maine, the formula has yet to be put right and, because of the $130 million gap between the current funding level and the amount actually called for, the formula is not likely to be fully funded.

The crux of the formula problem is neatly described in the review as follows: “In altering the school funding formula in the 1990s, the Legislature had two choices: (1) cap the foundation operating cost, or (2) lower the share of covered costs paid by state government. Had it done the latter, it would have preserved the existing equalization principles. Instead, the Legislature nominally held its share of K-12 costs at 55 percent by arbitrarily reducing the computed cost of running schools.”

This sleight of hand has had an immediate, harmful effect on poorer districts that grows worse with time. The funding gap between the haves and the have-nots has grown even as poorer towns generally carry higher mill rates for education. That is, the poor are shouldering a heavier burden and still are falling behind.

The first policy recommendation in the review article is the most important: Make the per-pupil guarantee recognize the minimum cost of education. The formula currently bases its guarantee on an outdated mill-rate assumption that has the effect of spreading state school dollars too broadly rather than concentrating them where they are needed most. Legislators can make the formula even more effective while simplifying it by tossing out its income factor, which favors the richest towns.

The Legislature this winter will consider a list of what the Department of Education considers essential services, with the hope of funding this baseline of services to increase equity statewide. But that list could cost the state another $100 million per budget. Last year, lawmakers fought over education increases worth about one-tenth of that. The governor and party leaders need to say up front whether they would support funding increases that would truly cover these services. If not, going through the exercise is little better than meaningless.

Finally, the authors point out that Maine began its modern era of school budgeting in the 1970s, when the state produced a funding formula that was the envy of the nation. Slowly, through recession and the interests of a few influential lawmakers, the formula has been weakened and needlessly complicated.

The review article offers a way to get back to the defining idea behind the state’s participation in local schooling: equity and opportunity for all students.