AUGUSTA — The Maine Department of Education on Friday released preliminary state subsidy figures, including specifics about teacher retirement costs that districts would be expected to pay under Gov. Paul LePage’s proposed budget.

One of the school districts that would take a hit is Regional School Unit 2 in Hallowell, which already is receiving about $334,000 less in state funding this year than last. Next year, it could experience an additional loss of $600,000, consisting of a $273,961 reduction in state subsidy and $339,151 in additional pension contributions.

Superintendent Virgel Hammonds said a funding cut of that magnitude would be “devastating.”

“The big sticker shock is that retirement cost shift,” Hammonds said Friday. “I’m still hopeful, in discussion with our legislators, that perhaps that might be pulled from being a local expectation.”

LePage has proposed shifting $28.9 million in pension contributions from the state onto Maine public schools, then offsetting half of the cost with a $14.5 million increase in General Purpose Aid to schools.

The offset that each district receives is based on property valuation. About 75 districts with the most property wealth — mostly along the coast, and about a third of which operate no schools — will receive no offset. 

In the Augusta area, that applies only to the Fayette School Department, which would be responsible for $8,706 in pension contributions.

It’s not clear how much of an offset each district is receiving, because the Maine Department of Education did not separate that figure from the projected state aid for districts.

Teachers pay 7.65 percent of their salaries into the state pension fund, and the state picks up 2.65 percent for costs related to current school employees. That 2.65 percent makes up the $28.9 million that would be shifted to local school districts.

The education department estimated the cost for each district by multiplying eligible salaries by 2.65 percent.

Six central Maine districts have estimated pension costs greater than $300,000: Augusta School Department, $360,877; Hallowell-based RSU 2, $330,098; Farmington-based RSU 9, $324,150; Oakland-based RSU 18, $403,962; Fairfield-based RSU 49: $315,403 and Skowhegan-based RSU 54: $393,645.

The pension cost for Portland Public Schools, the state’s largest district, is $1.37 million. 

The figures released Friday show $842.7 million in General Purpose Aid going to schools next year. That’s up from the $825.7 million Maine schools are set to receive this year following the approval by the Legislature this week of a supplemental budget including a $12.6 million curtailment.

The funding figures for next year don’t include an additional $9 million in the budget to distribute to schools in support of state initiatives such as the transition to a proficiency-based diploma and new teacher evaluation systems.

Among 230 school units in Maine, all but 72 are projected to have less state funding to work with next year once the retirement contributions are subtracted from their state aid.

For about half of central Maine school districts, the estimated subsidy for next year is less than they received last year.  

Deputy Education Commissioner Jim Rier said the estimates are preliminary and could change depending on the outcome of debate about the state budget. 

If the Legislature decides, for example, not to require school districts to pay retirement costs, General Purpose Aid would have to be decreased by $14.5 million so the state can use that money to make the pension contributions, Rier said, plus an additional $14.5 million to help balance the state’s budget.

The information gives local officials at least some idea of what to expect as they start to build their own school budgets. 

Sue Lambert, director of business and finance for Fairfield-based Regional School Unit 49, said it’s still hard to plan, given all that could change. RSU 49 would be one of the budget’s biggest beneficiaries, as it is projected to get a total $469,626 increase in funding.

“We’ll have to see down the road if these are the numbers we end up with or not,” Lambert said, “but when I see that last column, I’m pleased.”

Lambert also was unsure why her district would receive increased funding. That won’t become clear for most districts until their individual subsidy printouts become available later this spring.

The biggest factors are property valuation and enrollment, particularly the number of students with additional challenges, such as special-education students or English-language learners. A larger-than-average decrease in property values or increase in enrollment can earn a district a larger state subsidy.

Rier said the retirement cost was garnering a lot of attention Friday, but the state formula is complex and involves many other factors.

“There are much bigger components here affecting how much people are getting,” he said.

Rier said a change in the way career and technical students are funded is probably largely responsible for a projected $1 million subsidy increase for Augusta public schools. In the past, the state subsidy for students attending the Capital Area Technical Center went to their home districts, who then paid tuition to Augusta; but now the money will flow directly to Augusta from the state.

Susan McMillan — 621-5645
[email protected]

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