Proposed cuts in the state education budget would reduce funds to private high schools in the state, although a compromise in committee would lessen the blow somewhat.

Gov. John Baldacci’s latest state budget proposal calls for a $34 million reduction in education funding including a one-time elimination of the insured value factor for private high schools.

The insured value factor allows some private high schools to add a 10 percent surcharge onto the maximum allowed tuition rate they charge districts that send students to their schools. The surcharge is earmarked for capital construction projects, according to Department of Education spokesman David Connerty-Marin.

The current maximum tuition rate is about $8,000 per student, Connerty-Marin said Friday, which, if the proposed cut stands, would mean private schools would receive about $800 less per tuitioned student next year.

A compromise worked out between the Legislature’s Education and Appropriations committees, however, would put back half of the insured value factor surcharge and allow the independent schools to charge 5 percent above the maximum tuition rate.

The Legislature has not yet voted on the state budget.

The impact of the proposed cut could be significant for private schools that can impose the surcharge, which include John Bapst Memorial High School in Bangor, Lee Academy in Lee, Maine Central Institute in Pittsfield, and Washington Academy in East Machias.

Private schools cannot apply to the state for major capital projects. They rely on the IVF program to provide funds for capital expenses, including construction, maintenance and equipment purchases.

At George Stevens Academy in Blue Hill, the loss of income would amount to approximately $225,000 if the state eliminated the IVF funds completely, according to Headmaster John Greene.

Although the IVF funds are earmarked for capital expenses and are not part of the operational budget, Greene said the proposed cuts could indirectly affect programs at GSA. The school usually draws on the annual fund for additional funding for programming. A loss of IVF funds could affect those programs.

“You have to make choices,” Greene said. “We generally allocate about $300,000 from the annual fund to academic programs. If we have to divert those funds into capital expenses rather than academic programs, that’s an impact.”

The department targeted the IVF program as part of the budget reductions in an effort to equalize cuts in education funding that have hit public schools but not the private schools, according to Connerty-Marin. In the past two years, there has been approximately an $87 million reduction in education funds to public schools, he said.

“There has been no effect on the private schools,” he said. “We thought we should have them share in some of the reductions as well.”

Completely eliminating the IVF surcharge for one year would free about $3.5 million, according to Connerty-Marin, but would not result in corresponding savings in the state budget. Rather than reducing the state’s costs, he said, those funds were redirected within the general purpose aid program in an effort to ease the local tax burden, he said.

“This won’t save the state anything,” he said. “This is a way to reallocate the money the state is spending on GPA. We’re taking the IVF funds and putting the money into reducing the local obligation for school funding.”

The governor’s proposed cuts were built into the preliminary estimates for general purpose aid to schools, which the department released earlier this month. If the compromise 5 percent IVF surcharge remains intact, the amounts of subsidy to towns or districts that tuition students pay to private schools likely will change.

rhewitt@bangordailynews.net

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