A bill that would shift some teacher retirement costs back to the state after several years of being paid by local communities received a committee’s endorsement on a party-line 7-5 vote Thursday.
“When it passed, it represented a whole new burden on property taxes,” said Sen. Rebecca Millett, D-Cape Elizabeth, chairwoman of the Legislature’s Education and Cultural Affairs Committee. Democrats on the committee voted in favor of the bill, L.D. 427, while all Republican members were opposed.
The costs, known as normal teacher retirement costs, had been paid 100 percent by the state until the LePage administration shifted half the costs to local school districts in the 2013 two-year state budget.
Since then, local municipalities have paid about $114 million for their share of the retirement costs in Maine.
The total cost is about $50 million this year, split between the state and districts. If the bill passes, the state will have to shift $25 million per year from the General Fund to the teacher retirement plan starting in the next two-year budget.
Since school spending accounts for half of the typical municipal budget – which is funded largely with property taxes – shifting teacher retirement costs onto school districts has pushed property tax rates higher while reducing pressure on the state budget. Conversely, if the bill becomes law, pressure on the property tax would be reduced but more money would be needed in the state budget, which is funded largely with sales and income taxes.
In Portland, local taxpayers have paid $11.3 million in teacher retirement costs since the shift. Retirement costs currently account for $2.4 million of Portland’s $110 million budget
The committee also voted 7-5 in favor of a bill that would add $25 million in General Fund money to the state’s existing school revolving renovation fund. The fund, which currently has $6.5 million in it, can be used to make upgrades to schools, such as a replacing a roof, but not for major overhauls or building replacements. Those larger projects can be funded through another construction fund, known as the major capital school construction fund.
The committee unanimously rejected a bill, L.D. 557, that would have created a third school construction fund, with $30 million from the General Fund, to help schools pay for minor school infrastructure needs.
Also Thursday, the committee unanimously rejected a bill by Rep. Larry Lockman, R-Amherst, that would have prevented public school teachers from political, ideological or religious advocacy in the classroom. Instead, the committee said the Maine School Management Association would communicate with all school boards on the substance of the debate surrounding the bill and ask them to hold conversations at the local level about it.
“This legislation goes against a core belief that politics like this is local. It needs to be handled by the administration,” said Rep. Gary Drinkwater, R-Milford.
Noel K. Gallagher can be reached at 791-6387 or at:
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