Most area school districts received some good news with the release of preliminary state subsidy amounts on January 31. The subsidies are based on $1.1 billion in funding allocated to education in the 2018/19 state budget that was enacted last year by the legislature, and a 3% increase for school districts' essential programs and services has resulted in over $42 million in additional funding for education. The budget also included a number of changes in the funding formula.
     "The overall news is good for the AOS," says AOS 77 Superintendent Ken Johnson of the state subsidies for the nine municipalities in the administrative unit, including Eastport and Lubec. However, he notes, "Some towns may see a net loss because their valuation increased or they lost students." He says those towns can either cut their budgets and reduce their additional local funding or use more carryover funds that the districts have in their budgets.
     Johnson points out that the required local share has increased in some towns, particularly Eastport, Lubec, Alexander and Perry. Eastport is projected to receive $32,461 more in state subsidy, to a total of $167,407. However, the required local share is increasing by nearly $47,000, to a total of $1,049,871. Johnson says the required local share increased because of a $5.3 million jump in the city's valuation, now up to $140 million.
     Lubec's subsidy amount is projected to increase by $73,451 to $245,458, mostly because of an increase in the special education adjustment, from 33% to 40%, for minimum-receiver districts.
     Johnson says the subsidy numbers will be welcome news in Pembroke and Perry, which saw reductions last year. Perry is projected to receive $45,516 more in subsidy, for a total of $420,748, and Pembroke will receive $44,083 more, for a total of $520,969. For other AOS towns the subsidy difference from the current year and the projected amount for the coming year are as follows: Alexander -- $23,644 more to $191,187; Baring -- $82,351 more to $240,900; Charlotte -- $57,837 more to $452,242; Crawford -- $1,551 more to $4,801; Dennysville -- $12,705 less to $172,794.
     Johnson notes that the subsidy calculations had previously been based on a three-year averaging of municipal valuations but this coming year will be based on a two-year average. "We could see more erratic numbers" in subsidy numbers for towns, as the three-year averaging provided more consistency and less fluctuation.
     The superintendent points out that the municipal valuations used in the state's Essential Programs and Services (EPS) school funding formula are not accurate reflections of towns' ability to pay for educational costs. A good example is provided by comparing the subsidies and valuations for Calais and Lubec. Lubec's valuation, at $176.4 million, is higher than that of Calais, at $173.2 million, because of the large amount of waterfront shoreline in Lubec. However, Johnson notes that "anyone who's been to the two towns knows that Calais' ability to pay is greater," with Lubec having little industry and not many jobs. Calais, though, will receive over $4.5 million in state subsidy, while Lubec, as a minimum receiver district, only will get $245,458, under the proposed subsidy amounts. Lubec taxpayers will provide 82% of their funding for education, or over $1.14 million, with the state providing just 18%. The inverse is true for Calais, where the state provides 89% of the funding, or $4.5 million, while the local share of $1.47 million is only 11% of the budget.

Calais may receive more funding
     Ron Jenkins, superintendent of the Calais school system, says he is still making sure the subsidy numbers, which show a $374,774 increase to $4,526,603 for Calais, are correct. One of the changes in the subsidy formula concerns the career and technical education (CTE) funding, with a new line showing $896,908 in funds for the St. Croix Regional Technical Center. Although the state already has been providing CTE funding, the allocation will now be based on a program-driven cost model based on projected enrollment. Jenkins says the new CTE funding model is based on a legislative bill that he says has "a 95% chance of passing." Calais will receive "a small benefit" from that change, Jenkins says.
     Two other bills currently being considered also could affect subsidies. One would eliminate the $46-per-student penalty for districts that have chosen not to partner with other districts to develop regional service centers, an initiative launched in response to an executive order issued by Governor LePage last year. None of the school districts in Washington County are forming the service centers, and Jenkins says Calais would lose between $27,000 and $30,000 this year for not doing so. He says the penalty is annoying because the Calais schools already partner with other districts to share resources and had tried consolidation previously in AOS 77 but decided to get out of the AOS. According to Jenkins, a second bill would not remove the penalties but would give credit to districts like Calais that are already partnering with other districts, similar to the regional service centers. Either bill would provide more funding for Calais, and Jenkins hopes one of them will pass, although subsidy numbers would have to be refigured then. While it appears there will be a majority vote in the legislature for the bill to repeal the penalties, it's uncertain whether there are enough votes to provide the two-thirds majority needed to overturn the likely veto by Governor LePage.
     As for the local contribution, Jenkins notes that the Calais schools have had flat funding for the past two years and this year is a negotiations year for the teachers. "My best guess is we will be asking the city to support some additional local funding," he says. "At some point, I think the budget will have to go up some." He expects, though, that any proposed increase will be a modest amount.

Boosts for Machias area schools
     AOS 96 Superintendent Scott Porter says the Machias Bay area schools also will be seeing subsidy increases under the preliminary figures that were released. However, he notes that the $227,279 increase for Machias is misleading, since $50,000 of that amount is based on the change in CTE funding. Machias hosts culinary arts and building trades programs, but it also manages a satellite criminal justice program at Narraguagus High School. While the state funding has been sent directly to Narraguagus, the change in the CTE allocation will have the amount pass through Machias. Machias' actual subsidy increase is thus only $177,000.
     Like Jenkins, Porter points out that the CTE funding change bill, LD 1016, has not yet been approved by the legislature. He's concerned that the change will end up hurting rural areas of the state, since the driver for funding will be based more on student enrollment than on actual costs, which is the current funding model. While for three years the state will be holding schools harmless, meeting the costs for the programs, in the fourth year funding could drop significantly in rural areas, since student numbers are less.
     Porter says the change in the EPS funding formula calculations for special education will help some towns, including East Machias, which will see a $112,400 increase in subsidy, but he notes that their special ed costs have increased.
     Five of the 11 districts in AOS 96 -- Machiasport, Northfield, Roque Bluffs, Wesley and Whiting -- are minimum receiver districts, and Porter notes that the 2011 legislation that had been sponsored by then Senate President Kevin Raye to ensure a minimum level of state funding has been "a big help" to those towns. With state funding for education increasing to $1.1 billion this coming year, Machiasport, for instance, will see a $27,060 subsidy jump and Whiting a more modest $3,499 increase. "A lot of places got a little boost," he says, while agreeing with his fellow superintendent, Ken Johnson, that the state's EPS funding model is not fair to towns in rural areas of the state with low student enrollments and high valuations caused by coastal and lakefront properties.