Education officials are closely watching a bill that would give more state aid to struggling mill towns but would force the state to reallocate education funds – again.
Gov. Paul LePage signed a bill on March 10 giving an extra $15 million to schools, allowing local districts to move forward with their budgets, which must go out to voters for approval in the next few months.
But L.D. 281 would shuffle the state education appropriation amounts again. Since it’s the same pot of money, it means that cities and towns such as Portland and Scarborough, which saw their state aid drop significantly but recover slightly in recent weeks, would see their state education aid decline again.
“At this particular point, it would represent a jerking around on the part of the local towns trying to figure out exactly where their school budgets are,” said Rep. Richard Farnsworth, D-Portland, who sits on the Legislature’s Education and Cultural Affairs Committee. He is advocating for the Appropriations and Financial Affairs Committee to find up to $3 million in extra funds to add to the education funding formula to help the struggling towns without taking money away from other districts.
The bill is in response to several mill towns losing employers, most recently Madison Paper Industries, which will close in May.
Initially L.D. 281 identified four towns for extra aid – Jay, Madison, Millinocket and Skowhegan – but Friday the bill was being rewritten to strip out the names of the towns and replace them with a numeric trigger that could apply to any town facing a big dip in tax value, according to Sen. Rodney Whittemore, R-Skowhegan, who has helped to craft the bill.
Whittemore said state officials were still calculating what percentage drop in tax value should trigger the change in the funding formula for that municipality.
Normally, the Maine Department of Education uses a three-year average to determine valuation. But for a town identified as having a sudden drop in value under L.D. 281, the state would use only the most recent valuation – the one reflecting that drop – which will result in the town getting more state aid.
Education officials said they understand that towns losing a mill or facing a catastrophic financial loss need more state funding, but they suggested additional money should go to those towns – and not be taken away from other districts.
Whittemore said the governor rejected the idea of adding extra money to the education funding formula.
“To be honest with you, the governor is being very, very steadfast about expending any more revenue. He does not want a supplemental budget and that is exactly what would have to take place,” Whittemore said.
Acting Portland Superintendent Jeanne Crocker said any change to the state allocation would hurt the district, possibly causing staff cuts.
“The process is well down the road and this would create a great hardship,” she said. “I would hope there would be additional monies to support these communities and that the final figures provided to the other communities would not be changed.”
Whittemore downplayed the idea that redirecting education funds would have a big impact, because it’s spread out over all the state districts. But he acknowledged that he didn’t even have a ballpark number for how much money would be redistributed under the bill.
“Every town would feel some sort of impact,” he said. “I don’t think the amount of difference in any one town is going to be even a fraction of a percent. It’s not going to be big dollars.”
Whittemore said he hoped to get final language on the bill by early this week. The bill is currently in the appropriations committee and would then go to the Senate.
Rep. Jeff McCabe, D-Skowhegan, is also working on the bill’s language. He said the changes are necessary because small towns are vulnerable to major tax swings.
“Often people don’t recognize the reality that we face in rural towns where we have one or two major taxpayers. I’ll give the governor credit for recognizing that Madison and Skowhegan did the right thing by trying to scale back the valuation of the mills,” he said. On Tuesday, Skowhegan reached a deal with Sappi Fine Paper under which the town will lose about $1.2 million in tax revenue next year.
“We saved those jobs, but there’s a hit to the taxpayers,” McCabe said. “At the same time, this is a great argument for why we need to increase school funding across the board.”
Like Whittemore, McCabe noted that the bill is being written so any town in trouble will have a safety net.
“I encourage people to look at this bill and say it may not be our town now, but folks should really look at the 10,000-foot-view of Maine and really look at what could be impacted next,” McCabe said.
Noel K. Gallagher can be reached at 791-6387 or at:
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