School costs squeeze towns



ELLSWORTH — Gouldsboro this year pulled $57,000 from what was once a $400,000 reserve account to help defray the cost of education.

The problem is, they’ve emptied out the reserve account.

Gouldsboro is hardly alone.

Several Hancock County municipalities are confronting the dilemma of how to keep pace with the rising cost of education when their principal source of revenue — the property tax — is not keeping up.

In Surry, Selectman Bill Matlock said his town has not depleted its municipal reserve but the school “carry forward,” what wasn’t spent the prior year, is gone.

Several years ago, the carry forward totaled $800,000, he said. Now it’s at zero.

Matlock said 89 cents of every dollar expended by the town is spent on public schooling.

For the first time in several years Surry raised its mill rate — the property tax rate — from 7.25 mills to 8.55 mills.

Property taxes are levied according to a mill rate. The mill rate is the amount property owners pay per $1,000 of property value.

For example, if someone owns a home valued at $100,000 and the tax rate is 10 mills, then the tax bill will be $1,000.

Matlock said Surry is still a property tax bargain when compared to many other communities.

“We can encourage schools to be as tight as they can,” he said. “We can hope that people will build new homes, add on to their homes.”

In terms of trying to expand the tax base beyond property taxes, Matlock said that is unlikely.

“This is really a bedroom community,” he said. “The town has no wastewater treatment plant, no community sewer or water system.”

Matlock said it would help if the state would meet its obligation under a 2004 statewide referendum to fund 55 percent of the cost of public education.

“A lot has to do with what the legislature does,” he said.

“Realistically, there is very little a town the size of Surry with 1,800 people can do, other than encouraging people to move to Surry or build new homes,” he said.

In Gouldsboro, Town Manager Bryan Kaenrath is worried about the next budget cycle.

“Next year we have zero to pull out of the reserve,” he said. “It is definitely going to be a tougher budget next year.”

“The frustrating part is we work hard to keep our municipal budget where it is, cutting $50 here, $100 there, and then we get a $73,000 increase in the school budget. That’s a big hit for us,” he said. “In late April, we get the RSU number and four months of work goes out the window.”

Regional School Unit 24 (RSU 24), which includes Gouldsboro and eight other municipalities, feels his pain.

Business Manager David Bridgham said the bulk of the school budget, some 85 percent, is administrative, teacher and staff salaries and benefits.

School officials have said they have to remain competitive in order to attract qualified administrators and teachers.

Bridgham said it’s obvious the state is not doing its share, largely because of the contentious EPS (Essential Programs and Services) formula the state uses in deciding how much each municipality will receive in state aid for education.

State subsidies under EPS have shrunk to near nothing for many municipalities because the state aid is based largely on property valuations and student enrollment.

School officials in rural Downeast Maine have long complained that urban areas, regardless of their wealth, tend to do much better under the EPS formula than their more rural neighbors because of the numbers of students and cost efficiencies available in larger districts.

Bridgham said Gouldsboro’s budget went up because the school budget, though lean, increased 2.6 percent while Gouldsboro’s share increased 2.3 percent.

He said the way in which the state has avoided abiding with the 2004 voter referendum to fund 55 percent of public school costs was by excluding certain costs that had been considered routine educational expenditures and by putting limits on what the state would pay.

Gouldsboro’s neighbor, Winter Harbor, is having its own struggles with paying for education.

The town has 66 students in kindergarten through 12th grade and the school budget is $1.09 million.

The mill rate in Winter Harbor, which for years prided itself on having one of the lowest in the state, crept up from 7.85 to 9.5 last year.

In the current budget cycle, the mill rate jumped to 10.3.

“We’re getting less and less from the state,” said Selectman Sonny Smith Jr.

“I don’t know how much longer this can go on,” said Terry Bickford, chairman of the Winter Harbor Board of Selectmen. “Maybe it’s time the towns joined together and beat the state up.”

In Ellsworth, the City Council this year reduced the school budget by more than $250,000 to avoid a tax increase.

But the councilors felt they could do that this year because the Ellsworth School Department saw an increase in its state subsidy and in tuition revenue — a scenario they said was unlikely to be repeated anytime soon.

Council Chairman Bob Crosthwaite said supporting education while not burdening taxpayers “is a balancing act like you wouldn’t believe.”

He said city officials have made do with less in other areas, such as putting less money in the local roads account to accommodate rising school costs.

“We don’t have anybody to pass it on to,” Crosthwaite said.

Like Bickford in Winter Harbor, Crosthwaite said it’s time for municipalities to join forces and make their voices heard in Augusta.

“Who’s speaking for municipalities that are hurting?” he said.

Crosthwaite said he would like to see related meetings and forums held at the county level so that officials can discuss “common pressure points that we all deal with at different levels.”

Gouldsboro’s mill rate increased from 8.13 to 8.45 last year. In the current budget year, the mill rate went up from 8.45 to 8.74.

Kaenrath said many town residents are retired and living on fixed incomes.

“How many years of property tax increases can they sustain?” he asked. “What is the long-term outlook on this?”

He said he can understand that the RSU 24 sharpens its pencils as well, but they have a bit of a buffer with taxpayers.

“The phone rings here when they get their tax bills,” said Kaenrath, as new property tax bills reflecting the increase were mailed last week.

The town’s portion of the RSU 24 budget increased from $2.48 million in 2015 to $2.72 million in 2016 and, for the coming fiscal year, $2.79 million.

The Blue Ribbon Commission to Reform Public Education Funding and Improve Student Performance in Maine was established by the Legislature in the last session to examine increasing costs throughout the public education system in Maine.

The commission, which includes Governor Paul LePage, is tasked with recommending action to reform public education funding and improve student performance.

Efforts to reach the chairman, Bill Beardsley, were unsuccessful.

Sen. Brian Langley (R-Hancock County), co-chairman of the Education Committee, said the Legislature did its best in the last session by appropriating an additional $65 million in state aid for education.

“We saw that as tax relief to the taxpayers because the cost of education was rising,” he said. “There has been a very conscious effort to try to adequately fund public education and to offset or alleviate some of the property tax burden.”

Langley said that as student enrollment declines, smaller schools will see less in state aid because the EPS formula is largely driven by the number of students.

He said there is just so much state money to go around with competing interests in the Department of Health and Human Services, the Department of Transportation and other agencies.

Langley said the Legislature is cognizant that it is not meeting the mandate of funding 55 percent of public school costs, but continues to try to work in that direction.

In the meantime, he said, rural communities have to be more innovative by considering combining small schools that are nearby and by considering distance education for courses aimed at a small number of students.

“Being able to offer your students a wide breadth of programming might have to be done with distance learning,” he said.

Jacqueline Weaver

Jacqueline Weaver

Reporter at The Ellsworth American
Jacqueline's beat covers the eastern Hancock County towns of Lamoine through Gouldsboro as well as Steuben in Washington County. She was a reporter for the New York Times, United Press International and Reuters before moving to Maine. She also publicized medical research at Yale School of Medicine and scientific findings at Yale University for nine years.[email protected]
Jacqueline Weaver

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