Districts draft legislation to stave off big tax hikes

REGION — Legislation that excuses school districts from state requirements may be the only way to prevent crippling tax increases next year, according to superintendents currently drafting bills.

The state's Essential Programs and Services funding model requires school districts to provide 45 percent local share to the school budget. Local districts need to provide 100 percent of the 45 percent local share in order to receive state aid.

Since 2010, however, a waiver has allowed locals to raise only to the percentage the state raises for EPS. Currently, the state only raises about 83 percent of its required share.

That waiver runs out in June and a handful of large school districts, including SAD 17, Auburn and Lewiston, are facing the possibility of substantial tax increases to meet EPS requirements.

According to SAD 17 Superintendent Rick Colpitts, the districts are considering two options for legislation – one would keep the current waiver in place and the other would allow districts to “ramp-up” the amount they raise over a few years.

Oxford Town Manager Michael Chammings says the districts should focus on an extension of the current waiver.

Even a year's extension of the waiver could give the district valuable time to design and promote legislation, Chammings says.

“We need one of those options passed in order to prevent ourselves from falling off that cliff,” Colpitts says. “It would be devastating.”

EPS

More than 30 school districts around the state raise less than the EPS requirements, but SAD 17, Auburn and Lewiston are among the few that raise substantially less than required.

Last year SAD 17 was $1.8 million below the requirement. Auburn raised $1.4 million less and Lewiston around $851,000 less.

Since the waiver excused districts from paying the full amount, the gap between the required amount and the actual amount raised grew between 2010 and this year. 

The state also did not provide its full share and federal money from the American Reinvestment and Recovery Act was used to fill the gaps.

Now, even though the state is still not paying its full amount, local districts are being required to provide the entire local share or face penalties, Colpitts explains.

“It's shifting the burden for education from state to local, at a time when locals are struggling,” Colpitts says.

In December, Colpitts informed the school board that the district would need to raise local assessments by 11 percent next year to fill the $1.8 million gap between current funding and the required level.

Lewiston Superintendent Bill Webster estimates local taxes may go up around 10 percent to meet the district's own funding gap.

Harsh penalties may result if districts don't raise their required share. Deputy Education Commissioner Jim Rier explains that the proportion of state aid districts stand to lose is equal to the percentage by which they fail to meet the EPS requirement.

Therefore, if SAD 17 fails to meet its required local share by 9 percent this year, it stands to lose 9 percent of state aid, Colpitts says.

Districts raising far below required EPS are caught in a bind – they risk losing significant state funding, but cannot reasonably expect their tax base to sustain a large sudden increase.

"Absent something, the additional tax requirements would be so significant ... that I think we would soon be having a crisis where either local taxes would skyrocket or ... there would be such a reduction in support of education there would be a significant detrimental impact on students," says Webster.

Colpitts agrees – although SAD 17 needs an influx of funding, local taxpayers and municipalities can't sustain such a sudden jump.

"I know this is probably not the time to get up to the minimum local share," Colpitts says.

"To do it all in one year, which the current statute requires, is impossible for our towns to accomplish."

Legislation

Although extending the waiver for another year would stave off crippling tax increases, Colpitts says permanent legislation is the only way to prevent a repeat of the scenario in a year's time.

 He, along with Webster and Auburn Superintendent Katie Grondin, are currently working on two options to provide to lawmakers.

The first option would simply drop the "sunset clause" in the current statute, allowing districts to raise an equivalent percentage of the local share as the state raises its share.

That's only fair, Colpitts says – if the state isn't raising 100 percent of what the law requires, then local districts shouldn't either.

The second option would allow districts to gradually "ramp-up" its percentage of local share over a period of a few years, avoiding a jarring increase.

Legally, the district should be raising its full share, even if it takes a few years to get there, Colpitts says –  in theory, EPS is meant to determine the resources that are necessary to meet Maine's learning standards.

"The argument could be made that we're not raising what we need to ensure kids are meeting those standards,” Colpitts says, “and that's not good.”

The ramp-up option may also have a better chance of passing in the state house. A majority of the state's school districts pay the required local share and many fund over the requirement. An attempt to excuse districts like SAD 17 from the EPS requirements could meet political opposition.

Colpitts admits it's difficult to advocate paying less than the requirement – SAD 17 could certainly use more local and state funding.

“The only reason I advocate for it is because I ... don't think our communities can swing it this year. And I don't think it's fair to bankrupt them in order to ensure our program succeeds.

“I don't think we do have the resources to adequately meet Maine learning standards, I know we don't. But I think we offer a fairly good program, despite that.”

Next steps

The districts are working against the clock to draft permanent legislation and put it in the hands of lawmakers – the deadline to submit a bill for consideration is January 18.

Colpitts and Webster say they have already been in contact with local state representatives. Generating support for passage is the next step, and Colpitts is encouraging municipalities and taxpayers to contact their legislators and lobby for a statutory change.

Whether temporary or permanent, legislation may be the only chance the districts have to stave of sudden tax increases or face a cut in state funding.