On a snowy day when most of Maine’s municipal and school administrative offices were closed, Gov. Paul LePage made good on his promise to curtail state spending. The Governor’s Dec. 27 order set limits on the amount of state subsidies for education and other services.
Superintendents and district business managers have been expecting the curtailment order that is projected to reduce the overall state budget by $35.5 million. Of that total almost half, $12.6 million, is projected to come from reductions in education funding.
The Dept. of Health and Human Services will see a $13.4 million cut, with reductions also expected in the budgets of the University of Maine System, the Dept. of Corrections, the Dept. of Administrative and Financial Services, the Maine Community College System, and the Dept. of Public Safety.
“With the fiscal year at its midpoint, if we were not to address this now it would become increasingly challenging to achieve the reductions required to balance the budget,” Commissioner of Education Stephen Bowen said in an email to school administrators. “The curtailment order will help schools make plans. However, it is important to remember that by the Governor’s introduction of a supplemental budget in January there may be further action.”
Bowen included a spreadsheet with his message, outlining the cuts for each administrative unit. He said the cuts were based on a combination of four factors, including expected changes in local mil rates, a reduction to so-called minimum receiver districts from 35 percent to 30 percent of the Essential Programs and Services Special Education Allocation and further reductions to minimum receivers.
Minimum receivers are communities where the assessed value of the property is at a level that the state considers high enough to reduce their need for subsidy to a set minimum amount.
In Alternative Organizational Structure 93 towns will see cuts to their school subsidies reduced as follows: Bremen – $1578; Bristol – $15,716; Damariscotta – $4474; Jefferson – $38,566; Newcastle – $5520; Nobleboro – $12,485; South Bristol – $5608. The Great Salt Bay Consolidated School District will see a $30,904 reduction in its state funding.
AOS 93 Business Manager Katherine Hunt said the budget process always starts with projected expenses that include contracted amounts such as salaries and benefits.
“We’re going with a 10 percent increase in health insurance, just to be cautious,” Hunt said Dec. 28. She said the district uses historical data to plan for the cost of heating and transportation and tries to contract over extended periods to improve savings.
Hunt said tuition paid for secondary education is predicted, based on enrollment counts over the previous year.
“Then you have your special education costs,” Hunt said, adding those can change sharply from one year to the next and without much advance notice.
“One child can make huge difference,” she said. State and federal subsidies for special education are calculated on the basis of previous attendance and may not be seen in the local budget until two years after a specific population of students has advanced to another grade or school.
“We have four sources of income,” Hunt said. Those are the state subsidy, the fund balance left from one year to the next and two sets of funds that come from local taxation.
“The local required is a figure that the state provides to us,” she said. “Any hole left over after all those are taken into account is the local additional.”
That last amount is the figure a school board sets as an additional request beyond the state-mandated local contribution, and is subject to voter approval.
Regional School Unit 40 Supt. Susan Pratt said her district is expecting to eliminate extra activities such as field trips and staff development programs that have local funding costs associated with them.
The reduction for RSU 40 was not broken down by town on the DOE spreadsheet. For RSU 40 the curtailment means a reduction of $132,704.
“It’s a lot of money,” Pratt said. “It’s not as much, however, as I anticipated. I was preparing for worse.”
Pratt said a large part of the district’s annual budget is committed at the start of the fiscal year, in July. Those fixed commitments include contractual agreements on salaries and benefits, fuel contracts and construction debt payments.
“The only thing that we are looking at is, are there things that we do in this system that we can save money on,” she said. “I’m looking to be as efficient as we can. At this point I don’t anticipate any cuts in programs.”
She said her administration would look at all options as they prepare for the future.
“We’re going to tighten our belts really tight and hope this is it for this year,” Pratt said.
Pratt said federal programs such as the local entitlement for special education come with exact commitments as to how the money will be spent.
“A big piece of our professional development at this time is federal money,” Pratt said. “It’s called Title 2. Those activities will continue to happen.”
She said a spending freeze instituted late in 2012 is part of an ongoing process of examining all budget lines and all departments, to find savings.
A major difference between RSU 40 and AOS 93 is that, while the towns in RSU 40 generally qualify for substantial subsidies based on the level of student participation in the federally-mandated free and reduced lunch program, all but two of the educational units in AOS 93 are what is referred to as minimum receivers.
“Everybody but Great Salt Bay and Jefferson are minimum receivers,” Hunt said. “That means they only get the 35 percent for special education costs.” That 35-percent figure will be reduced to 30 percent, as a result of LePage’s order. Shortly before the AOS was formed, the Legislature made a commitment to pay 55 percent of essential programs and services, a promise that has never been met.
Hunt said AOS 93 administrators will be meeting with local school boards in the first two weeks of January to explore options. She said AOS 93 Supt. Steve Bailey has already notified board members of the reductions.
Like Pratt, Hunt pointed to contractual agreements that fix some costs and said field trips and staff development programs are vulnerable. Hunt said the timing of the governor’s order makes it so districts have some information needed to project the total budget.
“We’re halfway through the year,” Hunt said. “We can calculate the costs for the next six months and get a better picture of where we stand.”
“Unfortunately it does affect the programming,” she said.
“The mid-year curtailment is especially hard for school departments as there was no time to plan, Maine School Management Association Executive Director Connie Brown said Dec. 31. “Superintendents and school boards will work hard in the next few weeks to minimize the impact on students although it will be difficult, as school budgets have been passed, many with significant programming reductions.”
“The principals have all been aware of the possibility,” Hunt said. “They’ve been pretty close to the vest, as far as keeping budgets in line.”
Total cuts to RSU 12, which includes the Lincoln County towns of Alna, Westport Island, Whitefield and Wiscasset, will be $12,617.
Dresden is part of RSU 2, which will see its state subsidy cut by a total of $132,853.
Lincoln Academy Head of School Jay Pinkerton said his school would see no immediate change as a result of the curtailment order.
“Our rates, set by the state, are always based on spending over the past two years,” Pinkerton said in an email message. “We will feel the effects in the future when the maximum allowable tuition rates are calculated. Less money spent on education means less maximum allowable tuition for schools like Lincoln Academy.”
LePage is not the first Maine governor to use a curtailment order to rein in government spending. His predecessor, Gov. John Baldacci issued curtailment orders three times in his two terms as governor, in response to a widespread recession in 2008, 2009 and 2010.
The Dec. 27 order will also reduce the budgets of the Dept. of Health and Human Services by $13 million; Dept. of Corrections by $1.9 million; the University of Maine system by $2.5 million; the Dept. of Public Safety by $427,000; The Maine Community College system by $724,000 and Dept. of Administrative and Financial services by $776,000.
