2017-02-17 / Community

Board keeping an eye on construction bill

Proposed by Sen. Amy Volk,the legislation would adjust school funding formula for district’s that forego state process and move ahead with building projects
By Michael Kelley
Staff Writer

Members of local boards of education and school leaders are closely paying attention to the legislation state lawmakers are debating in Augusta. One LD129: “An Act To Include Locally Funded School Construction Projects in the School Funding Formula,” could have big implications for the area.

The proposed bill, presented by state Sen. Amy Volk (Buxton, Gorham and Scarborough) and co-sponsored by Scarborough state Reps. Heather Sirocki and Karen Vachon and state Sen. Nate Libby (Lewiston), “amends the definition of debt service costs to include, for purposes of the school funding formula, the cost of locally funded major capital projects for school construction that are not approved by the State Board of Education.”

“It doesn’t say how to do it, but it asks the board of education to take into account, somehow adjust the school funding formula to accommodate districts that felt the need to take on a school construction project independent of the state,” Volk said last Thursday, a week and a half after the Committee on Education and Cultural Affairs held a public hearing on the topic.

“When communities decide to forego the state approval process, which can be lengthy and burdensome, they are effectively penalized in the funding formula. The result is that they have a debt they alone are responsible for and they receive even less state funding,” Volk said at the Jan. 30 public hearing. “Districts I am aware of which have had this issue include Scarborough, Kennebunk, South Portland and Lewiston. I believe that finding a way to avoid penalizing districts which are ultimately saving the state construction money is an issue that should be considered.”

The state funding formula is the way the state determines how much aid the state gives public schools toward the cost of educating students across the state. Student enrollment, school and community demographics, operating costs, state-approved debt, and other items are used as factors in the funding formula.

Volk, who was reelected to her second term in the state senate in November, submitted a similar concept as an amendment to the budget last session, but the idea didn’t pass. Volk hopes it gets support this time around, but isn’t overly optimistic.

“It is not a bill that will likely pass because the department of education said it could cost $47 million. They are looking at it as all or nothing in terms of compensating school districts,” Volk said.

Her hope is there might be some willingness to consider some sort of middle ground, such as a credit or at least acknowledgement of the local debt communities have taken on.

Volk said Scarborough saw a drop in its state funding last year in part because the town had paid off the debt associated with the middle school construction and didn’t have that state-approved debt any longer. Over the last few years, Scarborough’s general purpose aid, has dropped from $7 million in 2009-2010 to $3.5 million this school year.

If the bill passes, the debt associated with the construction of Wentworth School would be factored in the state funding formula. Because Wentworth Intermediate School rated so low on the state’s revolving renovation fund priority list and the needs at the school were so great, the new Wentworth School was constructed through local funding.

“I believe the list of qualified capital projects submitted for approval to the Department of Education every year, far exceeds the state’s capacity or willingness to fund them,” Scarborough Town Councilor Chris Caiazzo said before the cultural and education committee Jan. 30. “This leaves so called ‘wealthy’ southern communities such as Scarborough to balance the risk of doing nothing and hoping we will make the approved list in time versus fulfilling the immediate need and taking the initiative on our own, at no further expense or risk to the state.”

Caiazzo, who was testifying on his own and not as a town councilor added, “to be clear Scarborough is not asking for special relief from its obligation to adequately fund education in our town or even special consideration for Scarborough alone. What we are asking for and what this bill will provide, is a more fair and equitable way of giving credit to communities where credit is due.”

On Feb. 1, the day after testifying herself, school board member Jackie Perry alerted the town council of the pending bill, telling them, “if this passes, it will be a boom to this community because it suggests any community that builds a school without state funding could get reimbursement.”

Scarborough Superintendent Julie Kukenberger indicated in her testimony that the bill could have meant an additional $700,000 in general purpose aid for this school year.

“Currently in Scarborough, our debt service is almost $6 million dollars a year. If this amount were included as a directly subsidized expense in our FY17 EPS allocation, we could potentially see a $700,000 increase in GPA subsidy for our district, and more importantly for our students,” she said at the Jan. 30 session. “This bill has the potential to reward our local taxpayers for their support of our students and schools, instead of penalizing them by not including our outstanding debt service in the current EPS formula. This is key for our town. I believe it will allow us to garner more community support as we work to address our current facility needs and allow us to move forward in enhancing public support for education in Maine.”

The district does indeed have facility needs it will need to address in the coming years, space concerns at the middle school and three primary schools. The school district is in the process of applying to potentially receive state funding to do a renovation project at the middle school and/or build a new consolidated primary school somewhere on the town campus.

“LD129 is important because we receive no credit in our state allocation for the expenditures we have made in construction/ renovation. We have applied for state funding, and will continue to do so, for construction projects, but are in a long line with many other communities. Our latest facilities audit demonstrates that we have four schools in need of significant upgrade and renovation,” Perry said in her testimony. “The question we have posed to our legislators, and thus LD129, is how much debt must a community incur without support from the funding formula? We believe that towns building needed facilities with local tax dollars, should be given monetary credits through the funding formula.”

Joanne Allen, director of school finance and operations for the Maine Department of Education, does not feel the proposed bill is the right approach.

“If this bill were adopted today, the state’s to- tal cost of education would increase by over $47 million in year one of the budget, with the potential to grow exponentially with future spending on unapproved projects. This bill bypasses the statutorily set debt ceiling limit, which provides a control structure for how much bonding the state should responsibly incur for school construction projects,” she told legislators last month. “This bill would transfer the results of the local decision to incur debt and increase the state’s commitment for debt payments without restrictions. The result from adopting such policy would certainly be an increase in the required local share (mill expectation) for all school units, should no new funds be available to be added to the state appropriation for General Purpose Aid to cover this increase.”

“The higher mill expectation,” she added, “would mean that all school units would participate in paying for local decisions made by other units which have chosen to incur more local debt, with no limits, input or regard for resources of all taxpayers, and the added incentive of knowing that the debt will be transferred to the state.”

C.J. Betit, the director of collective bargaining and research for the Maine Education Association (MEA), said his organization, which represents teachers and school staff across the state, is not advocating for or against LD 129. MEA does however support the state meeting its obligation to fund 55 percent of the cost of education.

“There is no doubt there is and has been a pent-up demand for school construction projects in the state at well above current state funding levels. A real policy/funding discussion is needed to find a way forward to make sure construction funding is both adequate and equitable,” Betit said.

Betit noted a measure passed by voters in November that would create a fund for additional school aid by taxing incomes more than $200,000 by an additional three percent, may be an avenue to do that.

“With that milestone in sight, MEA urges the Committee to continue its robust consideration of formula changes stemming from recommendations in the Picus report and subsequently the Commission to Study the Adequacy and Equity of Certain Cost Components of the School Funding Formula, including the issue of debt service,” he said

Volk said the next step, should the proposed bill continue on, is a work session, which is open to the public, but not for public debate. Then the topic would be debated by the Senate and then the House of Representatives.

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