Under the administration of Republican Gov. Paul LePage, local school officials cried out that state policy was inflicting pain on cities and towns by forcing schools to rely more heavily on property tax revenues.
Now the funding picture is changing under the budget submitted to the Legislature by Democratic Gov. Janet Mills, who proposes pumping an additional $126 million of state money into school funding over the next two years.
Some districts, like Saco, will use increased subsidies to expand pre-K. Here, Connor Labbe, left, and William Wilson, both 5, share a chair at Saco Community Center. Derek Davis/Staff Photographer
But just because there’s more state money for education, don’t expect local property tax bills to go down. None of the school officials interviewed for this story said they would use the higher state funding awarded to their districts to develop a budget that would reduce property taxes.
In some cases, extra state funding means a district won’t have to ask for as much money locally, but it will still have to ask for some, and that means property tax demands will hold steady or possibly increase.
School officials say that’s because personnel and benefits costs, which make up about 75 percent of most school budgets, are constantly increasing, even with declining enrollments. Districts are continually adjusting their offerings and, for some, years of belt-tightening measures means any additional state subsidy is quickly absorbed into the overall budget.
In Portland, the school budget has increased the school portion of the property tax rate between 2 percent and 5 percent over the last three years, for a cumulative tax increase of $102 for each $100,000 of the assessed value of a home.
“The premise of all we need to do is spend more money at the state level and we’ll see municipal taxes go down is false,” said Jacob Posik, a spokesman for the conservative Maine Heritage Policy Center. “No doubt for some districts (the additional funding) will make a difference, but I don’t think the effects are as universal as it sounds.”
Districts recently got detailed statements on what they could expect in their allocations for fiscal year 2020, which reflect $41.3 million in additional education funds in the first year of Mills’ biennial budget. There is an additional $85 million budgeted for fiscal year 2021.
RETHINKING SOME DECISIONS
Superintendents, who generally present their budgets to school boards in March, are using those figures to make budget decisions. With the change in administration in Augusta, most based their budgets on an expectation that they would get about the same subsidy as fiscal year 2019 – but many saw an increase.
Pre-kindergarten student Ellie Campbell, 4, makes an imaginary phone call at Saco Community Center. (Derek Davis/Staff Photographer)
In School Administrative District 6 in Buxton, an extra $1 million over last year’s allocation is enough to halt plans to close an elementary school that serves about 100 students. Superintendent Paul Penna told parents the money is “causing me to re-think some of the decisions I made in developing the 2019-20 district budget.”
Penna said he was excited but cautiously optimistic about the governor’s budget, which will inevitably change over the course of the legislative session.
“Although we are certain that we cannot anticipate the same level of annual increase in subsequent years, the proposal does provide an opportunity to reconsider and delay some of the budget decisions without the burden of significant tax increases to our communities,” Penna wrote to residents after Mills’ budget was released. “As a result, I have reconsidered the decision to close Steep Falls Elementary School for the 2019-2020 school year and will utilize our unexpected increase in state allocation as well as other cost reductions to mitigate the initial proposed tax increases to our communities.”
Penna did not return several calls seeking additional comment.
It is still early in the budget season, for both the Legislature and local governments. Whenever a new biennial budget is proposed, particularly when there is a change in administrations, local school boards do the bulk of their budget work before knowing the final education subsidy amount.
Education Commissioner Pender Makin has not yet released the details of the Department of Education budget, so how the state money is divvied up – or whether it’s earmarked for particular programs – is unclear. One of the few specifics to emerge is that there is $10 million in the second year of Mills’ budget to support raising the salaries of starting teachers to $40,000 – but that has yet to be approved by the Legislature.
Makin is scheduled to unveil the details of the education budget Monday, in testimony before the Appropriations and Financial Affairs Committee.
NO INCREASE: ‘A BIG DIFFERENCE’
The state has a complicated school funding formula that considers several factors, including the value of a district’s property tax base, the percent of low-income students it serves and the district’s special education costs.
Pre-kindergarten student Lauren Pahigian, 5, chases Toran Riggs, 5, at Saco Community Center. School districts will have more money thanks to changes in education funding from the state, and Saco is planning to expand its pre-kindergarten program. (Derek Davis/Staff Photographer)
In SAD 51 in Cumberland, the state allocation has declined by $1 million over the last three years, forcing the district to dip into reserves each year while still asking for roughly 6 percent tax increases annually for the school portion of the budget, Superintendent Jeff Porter said. The district gets an increase of $1 million under Mills’ budget: “A nice little surprise and good news for us,” Porter said.
He plans to use the money to offer a budget that requires little to no property tax increase.
“We’ve had to have years of increases in taxes,” Porter said. “So this year, to go from 6 to 6.5 (percent) to zero or just above zero will make a big difference.”
EXPANDING PRE-K PROGRAMS
Other districts said the extra money will help fund ongoing program initiatives, including expanding pre-K programs in Saco and Portland.
Saco Superintendent Dominic DePatsy said an extra $1.2 million over last year’s state allocation “really helped us out.” In addition to helping expand the pre-K program, more revenue means being able to fill positions that were left vacant “during the lean years,” he said.
In Saco, the overall tax rate increased from $18.58 in 2014 to $19.38 last year – almost entirely because of higher education costs. For a home valued at $300,000, taxes climbed $240, from $5,574 to $5,814.
Sarah Stanton reads to her pre-kindergarten students at Saco Community Center on Thursday. (Derek Davis/Staff Photographer)
Portland school officials, expecting a state subsidy cut of up to $2.5 million, have been engaged for months in multiple cost-cutting studies, including controversial proposals to combine high schools and close schools.
Instead, Portland, which has a $110 million budget, is now expecting an increase of about $700,000 from the state, from $16.9 million in the 2018-19 school year to $17.6 million. The rest of the budget must be raised locally.
Superintendent Xavier Botana said the additional funding “didn’t change our thinking (on the budget) but it did make it more realistic for us to move forward with programmatic priorities” such as expanding pre-K, reorganizing services for students with behavioral and emotional needs, and overhauling core academic programs, particularly math.
“Those are all easier to do from a place of having additional state funding,” Botana said. “I’m not changing anything because of the governor’s budget, but I feel more optimistic about that conversation.”
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