CHELSEA — For nearly 10 years, school districts that have sent their students to some Maine private high schools have underpaid a portion of what they owed, perhaps by millions, due to a recently discovered state Department of Education error.

In a Jan. 17 priority notice, the Maine Department of Education noted the recently discovered error.

The mistake cost the private schools millions that the schools could have used toward their buildings and grounds, while taxpayers will have to pay for a portion of the mishap starting in the upcoming budget year.

Because some school districts, like the Sheepscot Valley school district, don’t have a high school, the district pays for its students to attend a public or private school of their choice. If students choose one of the schools in the Maine Association of Independent Schools, what those schools are paid is spelled out in state law.

“All of the schools in the Maine Association of Independent Schools are sensitive to this,” Jeffrey Burroughs, MAIS president, said. “No one expected this to happen. We are not using the money to add positions, but using the money to get facilities up to date. The public enjoys the facilities and it’s an asset to us. By using that money, it’s not a debt to us.”  

What happened?

Across the state, an estimated 9,000 students attend schools in the Maine Association of Independent Schools, with 4,500 students receiving state tuition, according to information Burroughs provided.

“Our town academies provide wonderful benefits for the communities that they have served. Access to world-class facilities, educational opportunities and being key members of the economy in the regions in which they exist, town academies have been reflective of and responsive to the constituents,” Burroughs said.

These independent schools, including town academies, are funded and operate differently from public high schools.

Enrollment at schools like Erskine Academy in China, Lincoln Academy in Newcastle and Thornton Academy in Saco is made up of at least 60% of students from public school districts.

Although private schools are outside the jurisdiction of the Maine Department of Education, the department calculates the maximum allowable tuition that districts like the Sheepscot Valley school district pay to send their students to Erskine Academy.

Town academies do not take federal funding but may participate in state initiatives like the Free School Lunch Program.

Maine’s education department also calculates the insured value factor, which provides funding to independent schools to maintain and improve their facilities, which are used by all students.

The balance of the enrollment at these schools is made up of students whose families pay the cost of tuition.

When originally instituted by the state, the insured value factor was set at 10% of the base tuition, but was reduced to 5% in the 2009-10 school year. Bipartisan legislation in 2013 pledged to bring the amount back up to 10% over time, starting at 6% for the 2016-17 school year, and increasing over time. But that didn’t happen.

“The Maine DOE recently discovered that the calculation of the IVF that appeared on its website did not account for a statutory amendment that took effect in 2016, changing the method by which the IVF is calculated,” the priority notice said. “In short, the IVF should have been growing from 6% to a statutory cap of 10% of the tuition rate.”

While the education department is not required to post the amounts on its website, it historically has and the amounts posted did not accurately reflect the change.

A spokesperson for the department said its officials became aware of the issue earlier this year and have met with the affected superintendents and schools.

What’s the local impact?

Nearly every school department without a high school that pays tuition for secondary education for its students is affected.

For the town academies and several private schools, the loss over time was substantial.

Erskine Academy Headmaster Jamie Soule’s business team estimated the loss over the 10-year period to be around $1.5 million, according to a letter he sent to RSU 12 Superintendent Howard Tuttle.

The 23 schools that make up the Maine Association of Independent Schools are not expecting the towns to foot the entire bill, but to build it into budgets starting with this year’s.

MAIS schools include: Berwick Academy, Fryeburg Academy, Washington Academy, Lincoln Academy, Hebron Academy, Bridgton Academy, North Yarmouth Academy, Thornton Academy, Foxcroft Academy, Kents Hill School, Gould Academy, Lee Academy, Maine Central Institute, Erskine Academy, George Stevens Academy, Waynflete School, Chewonki Foundation, Cheverus High School, John Bapst Memorial High School, Hyde School, The Bay School, Carrabassett Valley Academy and Maine Coast Waldorf School.

Thornton Academy Headmaster Rene Menard was out of the office Friday and unable to answer questions, according to a spokesperson for the Saco school.

For RSU 12, taxpayers will see the impact starting this year, with $200,000 added to the current year’s budget. But because Tuttle can’t add the amount to the current budget without overspending, the amount for this year and next year will be added to next school year’s budget, totaling $400,000.

“It’s a $200,000 increase in this year and next year’s budget. So, that’s almost a $400,000 increase because of a mistake,” Tuttle said. Had the error been realized initially, the funds “would have been phased in over time and wouldn’t have been such a hit to taxpayers. This is a big increase that the board can’t control. It’s built into statute.”

Burroughs said most of the heads of schools agree that towns should pay the future costs rather than the amount owed over time. He is also unsure what the impact has been for other independent schools.

“We are proud of the work we do in these communities. We have been a part of the communities for hundreds of years, so we want to be a part of the educational landscape that provides access to quality programming. We appreciate that the DOE fixed this issue and appreciative of the money and it’s going to go to the best use,” Burroughs said.

Press Herald staff writer Gillian Graham contributed to this report.