While school officials try to figure out why preliminary state subsidy figures for almost all AOS #77 schools are showing such dramatic cuts in funding, Eastport and AOS school officials are making it clear that even if the city loses 75% of its state funding, as currently projected, Shead High School will definitely remain open. While efforts have begun to plan for alternatives if state funding is significantly reduced, AOS #77 Superintendent Jim Underwood says he is "anxious and hopeful" that the subsidy numbers will be revised, following a meeting with Maine Department of Education officials to find out why the district was cut by so much. There will be two more calculations of school subsidy figures when final figures are released, probably in May.

Cost to close Shead would be more
     At a February 17 special workshop of the Eastport School Committee concerning the proposed subsidy cuts, Underwood presented figures showing that it would cost local taxpayers significantly more to close Shead than to keep it open. He shared two draft budgets, based on the two scenarios, if the preliminary subsidy figures do not change. If the high school is kept open and if the total budget is reduced by about $100,000 through some staff changes, the additional amount to be raised in local taxes would be $188,000. Closing Shead, though, would require $480,000 more to be raised locally. The total school budget would be lower, but the local tax burden would be higher. The main reason for the $292,000 difference in the amount raised locally is that nearly $650,000 in revenue from Shead would be lost, including over half a million in tuition income from about 70 out-of-town students. Tuitioning the 37 Eastport students to other high schools would cost more than $380,000, plus transportation and special ed costs. Underwood noted that, because the AOS #77 schools have among the lowest operating costs in the state, tuitioning students out will cost the towns more.
     Board member Will Bradbury pointed out that at least $1 million of the school budget that is currently spent in Eastport would be spent in other towns if the high school is closed. The school system is "about the biggest industry in town," and the loss of jobs and other revenue would be "a lot of money to kiss away," he commented.
Board Chair Shannon Emery said people will need to get the word out that "we're not closing Shead. We're trying to revitalize Shead." Another board member, Meg McGarvey, said she would be suggesting that a committee be formed to help develop programs to make Shead more attractive.
     Bob Peacock, president of the city council, noted, "The last thing I want to see is the high school close. It's the heart and soul of the community and a major employer." Councillor David Morang asked if both the elementary and high schools could be combined in one building. Underwood guessed that move would result in the loss of a significant number of the high school tuition students.
     To work with the state to address the funding crisis in AOS #77 schools, Shead Guidance Counselor Leah McLean said that Washington County towns "need to start being really good neighbors with each other. We need to start talking and working with other communities."

Developing alternative plans
     The newly formed Parent-Teacher-Communities Organization (PTCO) for Eastport schools also held a special meeting to discuss the budget crisis on February 16. Jon Calame of the PTCO suggested that an alternative plan should be developed in case the subsidy figures do not change. He believes that energy costs can be reduced significantly and noted that zero-interest bonds are available to Maine schools for capital improvements and curricula expansion. Teacher David Consalvi suggested the PTCO could help provide information about the benefits of the schools to the community. The group then decided to form, along with an existing bylaws committee, two other subcommittees to develop a range of budget options and to provide information about the benefits of having the schools in the city.
     Teacher Trudy Newcomb noted that the cutting of funding can lead not only to the closing of schools but the closing of towns. Members urged that people contact state legislators, particularly members of the Education and Appropriations committees, about the devastating effect of the cuts.

Reasons for loss of funding
     Senate President Kevin Raye of Perry says he and others are trying to figure out why AOS #77 districts "are taking it on the chin." An additional $19 million is being added to the EPS formula for this coming year, with LD 1274, which was enacted last year, shifting $6 million to districts that had been hurt previously by the formula, including an additional $1 million for Washington County towns. Without that change in the law, Eastport would have lost even more in state subsidy.
     At a meeting on February 15 in Augusta called by Raye, Commissioner Stephen Bowen and Deputy Commissioner Jim Rier of the Department of Education (DOE) explained the reasons for the reductions in subsidies and listened to the concerns of a number of legislators, including all of the Washington County delegation; several superintendents, including Underwood, Barry McLaughlin of AOS #90, which includes Baileyville, and Ron Jenkins of Maine Indian Education; school board members, including AOS #77 chair Shannon Emery; and municipal officials, including Bob Peacock of the Eastport council and City Manager Jon Southern. "They did give us more than three hours of dedicated attention," says Underwood, noting that he believes the legislators and DOE representatives are sincere in wanting to help. They also are willing to meet with local school boards and town officials in this area to discuss the issue.
     As for why 10 towns in the AOS are losing funding, Raye says the factors include the huge cut in special education costs, which is a cost-based reimbursement by the department. Eastport lost about $235,000 because of the decrease in special education costs. Transportation also is a cost-based reimbursement, and Eastport lost another $58,000 because of a reduction in those costs. "If the cost of providing education is down by that much, it should be a wash," says Raye.
     Underwood notes there are a great many variables in the state's Essential Programs and Services (EPS) funding model, which is why some towns received much greater cuts in the preliminary figures than others. "We reduced budgets across the board," he says, in order to get budgets approved by voters in different towns. "We were compelled to cut special ed costs tremendously and central office administration costs. The result is we get considerably less money back." He notes that "every dollar we cut leads to less subsidy. It's a spiral that's just a disaster."
     According to Underwood, there is a difference of about $120,000 between the figures that the AOS office and the department show for the Eastport special education costs for this year. He hopes that recalculation will make a significant change in the subsidy figures.
     The department also is puzzled by the Medicaid reimbursement figures for AOS #77. Across the state, school districts saw reductions of about 85% in Medicaid reimbursement, but AOS #77 reported an increase. Reductions in the reimbursement help districts receive more funding under the state EPS formula, Raye says. The state will be checking to see if both the special education and Medicaid figures are accurate for AOS #77.
     Underwood believes the decision on providing additional subsidy is up to the legislature. "It a matter of priority -- to make sure all of the children in the state have equal and fair funding or not," he says. "The legislature does control putting in the factors to help out students and to give fair and equal education dollars in communities where we're not getting them."
     "Let's hope they're able to do something," he says. "The answer has to be in the legislature. It's just not fair."
     The legislature's Education Committee on January 24 did give an "ought to pass" recommendation to a bill, LD 958, directing the Department of Education to contract for an independent review of the EPS model. The bill now will be considered by the full legislature. The review would include an analysis of whether the EPS formula is providing sufficient funding to meet the actual cost of providing K-12 education in the state and an assessment of the funding formula's effect on municipalities. The results would be presented to the legislature by January 31, 2013.