SEDGWICK – Maine’s school consolidation law, proposed as an effort to save money in administrative costs, has raised questions – and anxieties – about the loss of local control, fast-track planning deadlines and unresolved details in the law.

There is also a growing apprehension among school districts that consolidation will actually end up costing taxpayers more in the long run.

“This was supposed to save us money,” said Lawrence “Skip” Greenlaw Jr. of Stonington, who heads the Maine Coalition to Save Schools, a citizens’ initiative movement to repeal the consolidation law. “But everything we know indicates that this is going to cost Maine people millions of dollars. Just with cost shifting and higher salaries, it’s going to cost millions and millions of dollars on their property taxes.”

The scenarios vary from town to town, but as school districts hammer out the details for reorganized districts, many have identified expenses they predict will cost towns more than they save.

“There will be savings and there will be costs,” said Robert Webster, superintendent of schools for Union 76 and Consolidated School District 13, which include Brooklin, Sedgwick, Deer Isle and Stonington. “We need to evaluate whether the costs outweigh the savings.”

The chief savings for a reformed regional school unit will come in the consolidation of central office staff, the main aim of the law. But some school officials say those savings will be offset by costs triggered by requirements in the law, in particular:

. Cuts in state subsidy.

. Higher costs in salaries and benefits.

. Salaries and benefits for new “middle management” positions.

. Cost shifts within new regional districts.

The Maine Department of Education has allocated funding to deal with some of the expenses. The funds are in two pots, according to DOE Communications Director David Connerty-Marin: $3.5 million to cover legal fees, statewide bus routing software, data entry and other miscellaneous costs, and a $1.7 million allocation to pay for the facilitators to assist reorganization efforts.

Last week, Jim Rier, DOE director of finance and operations, presented proposed legislation to the Appropriations Committee that he said would eliminate some of the financial barriers to reorganization.

Many, however, do not believe the law can be fixed.

“In my opinion, this law is so flawed, it needs to be repealed,” said Superintendent Scott Porter of Union 102 in Machias. “That’s not to say that there can’t be consolidation. There are things we can do to consolidate; we’re doing them and we need to do more. But they didn’t need to change our whole governance system to do it. And that’s what they’ve done. They’ve cut to the core of how we do business.”

Cuts in state subsidy

The law requires reorganization of Maine’s school districts which will reduce the number of districts from 290 to 80. In conjunction with the law, the state education budget for the next fiscal year was reduced by $36.5 million. The state also reduced its allocation in four areas under the Essential Programs and Services formula: 5 percent in transportation, facilities and maintenance, and special education, and a cut of almost 50 percent in the per-pupil allocation for central office costs.

Despite those reductions, according to Rier, the overall amount of state support for education has been increased by $43.5 million, or 4.4 percent.

He acknowledged that not all districts will see a 4.4 percent increase in their subsidies. Some school officials, as they work on reorganization, anticipate the overall impact of the law will be a reduction in those subsidies, and in some cases, significant cuts.

Based on the estimated impact on existing budgets, RSU 10 on the Blue Hill Peninsula would lose about $500,000 for the new district’s nine towns. SAD 28 in Camden-Rockport is predicting subsidy cuts of $900,000 in special education alone, although Superintendent Patricia Hopkins noted that loss will be eliminated if the Legislature adopts the department’s proposed law changes.

The impact will be less in some districts such as Bangor, which, according to Superintendent Robert Ervin, already has achieved low system administration costs, and is not required to consolidate because of its sufficient student population. Their per-pupil costs for system administration, for example, are about $213, very close to the new subsidy levels, and Ervin said he does not anticipate a large impact on the school system.

“I think we will face some challenges in funding,” he said, “but we run a very efficient ship.”

But even some districts that are not required to consolidate will be affected.

For SAD 3 in Unity, which will not be required to consolidate because of its geographic size, finding those efficiencies will be difficult.

“We’re staying by ourselves, but we still have to find the same kinds of savings as those that are consolidating,” said Superintendent Joseph Mattos. “And that’s based on the assumption that there are some efficiencies in place where we can save this. It’s like saying everybody has to lose 20 pounds. There may be some who can afford to lose 20 pounds. Other systems are pretty lean and can’t afford it.”

The SAD 3 planning committee identified areas in transportation and facilities where there may be some savings, but had difficulty finding savings in special education. Part of the difficulty is that many special education programs are mandated and the state cuts appear to contradict federal requirements under a policy of “maintenance effort,” which requires continuing programs to be funded to at least the same minimum level from year to year.

The impact on the central office would be the most severe.

“To get under what the state is projecting for [Essential Programs and Services], the only ones left in the office will be myself, my secretary and the business manager. We’ll have no one doing the payroll, accounts receivable, no [Human Resources], no curriculum coordinator,” Mattos said.

The process, he said, is all about money and not about quality. The school districts, meanwhile, are trying to balance efficiency with quality, expending the minimal amount of money and still getting the quality they want.

Although Mattos has not begun budgeting for the coming school year, he said that budget will require increases in local taxes.

“If you have cuts in subsidy and still maintain the same programs, it’s going to have to come in the local share. A lot of this is just shifting the cost from the state to the local towns. It saves state taxes, but you get an increase in the local taxes if you want the same programs.”

Higher salaries

Merging multiple school districts, each with its own salary structure and independently negotiated contracts, will create inequities in salary and benefit packages among the newly combined teaching and support staffs. Eliminating those inequities, according to school officials, will create a huge increase in costs.

“The process will be complicated and likely expensive and will result in cost increases as the districts with lower salary and benefit scales are brought up to the highest paid levels in the new district,” said Steve Fitzpatrick, superintendent of schools at SAD 29 in Houlton. “I don’t see any cost decreases in regard to the largest employment group you have.”

Those costs won’t be felt immediately since the law requires that existing contracts be honored until they expire. But eventually those costs will be significant, according to Superintendent Webster of Union 76.

Equalizing salaries and benefits in the school departments in the towns of Deer Isle, Stonington, Brooklin and Sedgwick, assuming that employees with the best benefits and salaries are kept at their current levels, will cost about $350,000 based on initial estimates, Webster said. For Union 93 in Blue Hill, the costs have been estimated at about $90,000. If all contracts in the new RSU 10 were brought up to the highest levels, the costs would be even higher, he said.

Those increases would wipe out an estimated savings of about $300,000 from consolidating the central offices of the two unions.

“We’ve got two areas off-setting each other,” Webster said. “It appears to me that there alone, there will be an increased cost of between $100,000 and $150,000.”

Disparities in salaries already exist in the school districts across Union 104, 106 and 107, which would become part of RSU 5, according to Jim Underwood, superintendent of Union 106 in the Calais area.

“There is a disparity in the current teachers’ salaries, a difference of up to several thousand dollars between one district and the best-paid teachers, up to several thousand dollars on any given step,” he said. “There’s going to be a tremendous expense to bring everyone up to the best of the salary packages. The costs are there and the costs are going to be very high.”

Most contract negotiations start from an existing contract, so there is a basis for starting the talks. This process, some superintendents say, will start from scratch. It won’t be easy and likely will require legal assistance.

“I don’t think an individual superintendent will want to negotiate without professional help,” Fitzpatrick said. “This is a whole new ball game. There are a lot of different components and it will be a lot of work.”

The increase in teacher salaries is a needed and welcome byproduct of the law, according to Connerty-Marin.

Many school districts, he said, now spend less than they should on curriculum and instruction, based on the EPS allocation formula. Of the existing districts, 150 are spending less than is called for in that formula.

“We do anticipate that salaries will go up,” Connerty-Marin said. “Both the commissioner and the governor support that.”

Despite the anticipated increases, Connerty-Marin said, there still will be overall savings from consolidation and more funds will be directed toward instruction.

“If units are spending less on administration, more of that can go into the classroom,” he said. “We support that.”

New positions

One of the key goals of the consolidation law is to reduce administrative costs by reducing the number of top administrators. However, some planning committees, particularly in smaller, rural districts, are predicting central office expenses actually will increase due to the need to create new “middle management” positions.

“The hidden costs come in the minute details, in working to see that the functions and services to students are not diminished,” Fitzpatrick said. “I believe we’re going to have to create a whole new level of middle management.”

He is not alone.

In smaller systems, Webster said, superintendents wear many hats, often overseeing such areas as building maintenance, transportation, food services and curriculum in addition to their superintending duties.

In a new, larger district, they will have to hire new directors to oversee those activities, he anticipates.

“There’s going to be an increase in expenses,” he said. “And we don’t know what kinds of other positions will be needed.”

Underwood said the increases in central office expenses will be significant. The equivalent of 3.5 superintendents are now serving in the proposed RSU 5, he said. If 2.5 superintendent positions are eliminated, the union will have to hire a full-time assistant principal, director of facilities and transportation, a business manager, and a curriculum director, he said.

It will cost more in the end to replace the 2.5 superintendents positions with five middle level administrative posts, Underwood said.

“It’s simple math,” he said. “It’s going to cost more to staff the central office. There is no way it’s not going to be more expensive.”

Cost shifts within districts

One of the issues facing the regional planning committees is the potential shifting of costs within the proposed RSUs. Based on the funding formula provided by the Department of Education that allocates the overall costs for running the new RSUs, the result has been a shift whereby some towns see savings, while others will have to spend more.

“This shifts the cost from certain towns to other towns,” said Scott Porter, Union 102 superintendent. “It has been very problematic for the process.”

Some of those cost shifts have been significant, with high valuation towns contributing more to the budget and as a result paying more than they would have if they had remained on their own.

Within Unions 76 and 93 and CSD 13 on the Blue Hill Peninsula, the total cost shift could amount to about $1 million. While towns such as Brooklin, Brooksville, Penobscot and Castine might see some savings in creating RSU 10, Blue Hill would see an increase of about $500,000, Sedgwick $100,000, and Deer Isle-Stonington $310,000.

“It’s hard to tell those towns that this is going to save them money,” Webster said. “It’s a question of who saves the money. It’s not distributed evenly.”

Underwood compared two neighboring towns – Calais and Baileyville – in the proposed consolidation of 20 communities into RSU 5. Under the formula, Baileyville, a high valuation town, would have about 15 percent of the students in the region, but would pay about 37 percent of the regional budget. Calais, on the other hand, with 26.6 percent of the students, would pay just 15 percent of the regional budget.

This cost shifting as much as anything could dissuade communities from joining a proposed RSU, despite the penalties associated with rejecting consolidation, Underwood suggested. The state has recognized this “unintended disincentive” to consolidation and the legislation proposed last week is an attempt to resolve that issue.

That measure would change existing law to allow reorganized school districts to decide themselves how they will share costs within the districts.

Some, however, question whether the cost shifting issue can be resolved. While cost-sharing formulas have been in use among SADs for years, Superintendent Scott Porter noted that they are difficult to develop, they change frequently as student populations and valuations change, and they often create divisions within an administrative unit.

“It is a very contentious process,” Porter said. “There is always someone that feels that they are not being treated fairly.”

Other concerns

The proposed legislation also would restore special education subsidies to minimum receiving towns, which under the existing law would lose those subsidies as a result of consolidation.

“The legislation would change that aspect, so that if they consolidate, they will not lose that minimum subsidy,” said Rier, the DOE director of finance and operations. “That will be a huge difference.”

The proposal also would eliminate the requirement in the original law that all towns raise a minimum of 2 mills for education.

The hope, he said, is that the changes will eliminate what have been seen as significant obstacles to consolidation.

The proposal is scheduled to go to the education committee in December and would be set for a vote very early in the next Legislative session, Rier said.

For school districts, other concerns include:

. School choice. Some fear the combined regions will have to pay tuition for students from member towns where school choice currently exists.

. Legal fees. Some towns anticipate significant costs to prepare detailed deeds transferring municipal facilities to the new RSU.

. Validation votes. Costs will be incurred to meet the requirement for a validation vote on the RSU budget once it has been adopted.

. Transfer of balances. School districts have been allowed to accumulate a certain amount of their budget surplus each year and regularly use those funds to reduce local taxes. Under the law, Underwood said, all balances must be completely expended in the first year. While that will reduce taxes that year, it will eliminate those backup funds and leave no safety valve fund for any of the local districts, he said.

“I’m advising everyone not to rush into this, not to feel rushed to complete it,” Underwood said. “You have to know and see what really is underlying all this. You need to know what you’re really working on.”

Although some school officials acknowledge the process has some merits and is forcing school districts to take a closer look at how and where they spend money, they also warn that ultimately the costs involved in consolidation will force many districts to reduce teaching staffs and close schools.

“We will be faced with less money for education, and will have to ask, ‘Can we raise that money locally?'” Underwood said. “You’ll see fewer teachers in the classrooms, and ultimately schools will have to be closed and teachers will be [laid off].”

While districts may be able to find some savings, Mattos, the SAD 3 superintendent from the Unity area, agreed that the result of consolidation will be some school closures.

“The savings are going to come by increasing class size, which means fewer teachers, or closing schools,” Mattos said. “We can find a little here and there, but to get the big numbers you’re going to have to close schools. I don’t know how to get it other than that. Where else do you find the big numbers?”