School funding gimmick courts disaster

Over the last four years, rural Maine’s educational system has endured three dramatic and potentially damaging changes to the way our children learn. First, the passage of the Maine Municipal Association-initiated referendum to force the state to fund 55 percent of local education. Second, a new Essential Programs and Services school funding formula, and third, school consolidation. Each has been controversial and damaging to the way resources are shared among our towns, but none more so than the new EPS school funding formula.

In June 2004, the people of this state passed the MMA-backed referendum which demanded that the state government assume a larger portion of education costs – 55 percent of all K-12 education costs. The objective was property tax relief.

In response to these demands, in January 2005 the governor and his administration put forth a schedule for the “ramp-up” to 55 percent funding over four years. The ramp-up bill, known as LD 1, was also billed as a way to provide property tax relief by putting spending caps on all levels of government.

LD 1 also included, however, significant changes in the definition of education in Maine known as Essential Programs and Services. The intent was to identify the cost of educating students statewide before splitting this cost 55 percent state and 45 percent local. Unfortunately, by leaving this, “cost of education” undefined, it left plenty of wiggle room for our elected officials to use it as a tool for spending shifts.

Before these changes in the EPS formula, the Department of Education and the Maine Legislature paid for new programs such as laptops for junior high students ($11.4 million per year) through a dedicated account. Other programs, such as Jobs for Maine Graduates ($1.6 million) and the Maine School for Science and Mathematics ($1.7 million) as well as the Governor Baxter School for the Deaf ($6.5 million), were paid through the state’s General Fund.

Through legislation initiated in recently approved state budgets, the Legislature and the administration, through 2008-09, will have added 19 programs to the EPS formula since it was created in 2005. These programs were previously funded 100 percent by the state and now will be a shared cost on the backs of property tax payers.

The gimmick does two things. First, because of statutory language passed in LD 1, all new ramp-up education money through 2009 is exempt from the state’s spending cap limitation. This maneuver makes spending look less than it actually is.

Second, the shift from the General Fund to EPS artificially inflates the new education ramp-up money. In fiscal year 2008, more than $35 million in General Fund spending was added to EPS. This type of fiscal maneuvering accounted for $123 million of the four-year ramp-up. This money is not new subsidy, but simply a shift into EPS of existing programs to give the appearance of new money.

Many towns across Maine have not benefited from so-called new education money. In the 2006-07 fiscal year, more than 70 school units received less in school subsidies than in the previous year. In this fiscal year this trend continues and grows to 85 units.

This year, urban towns such as Auburn, Augusta, Bangor, Lewiston and Presque Isle saw increases of well more than $1 million in new state subsidy, while rural towns such as Appleton, Cutler, Greenville and Mount Vernon lost state subsidy. Did the cost of running rural schools decrease? Obviously not.

This new gimmick is not the only time the Legislature dipped into education money guaranteed under LD 1. In the recently passed state budget, the Legislature decided to change the 2007-08 four-year ramp-up from 54.44 percent to 53.51 percent. This change saved the state $17 million, forcing municipalities to pick up the cost. School consolidation grabbed another $35 million.

After 2009, increases in new state school subsidy will be capped at 2.75 percent by LD 1. In addition, these new EPS budget gimmicks will have set the precedent for the Legislature on how to appear to increase education funding without actually doing it.

Without new money from Augusta, it will not be long before inflation, driven by skyrocketing transportation, heating and health care costs, gobbles up already struggling small rural school budgets. Add the impact of high poverty rates, the housing market collapse and very limited business investment, and you have a recipe for disaster.

Soon school boards across the state will be dissolved and superintendents eliminated. Who will be the voice and political clout for small rural schools? No one.

Could that have been the goal all along?

David Trahan served four terms in the Maine House of Representatives, and is a candidate for Senate District 20. He may be reached at dptrahan@midcoast.com.