Democrats can pretend to have made out like bandits in budget negotiations, but it’s no enigma who truly won the showdown. The Republicans, in lockstep with Gov. Paul LePage, succeeded in eliminating the surtax imposed by Question 2 and controlled negotiations throughout the process.
This is because Republicans made the first moves. LePage released his biennial budget in January, and conservative legislators were on record saying they’d accept nothing less than full repeal of the surtax by the time their counterparts released a “budget” in April. Then, House speaker Sara Gideon conceded on June 7 that liberals were willing to mince the surtax for a wheelbarrow of education cash.
In the long run, this may prove to be a brilliant play by the Democrats, as they made off with $162 million. Based on recent revenue forecasts and the funding structure of the ballot initiative, Maine wouldn’t have devoted that same figure to education, or generated revenue equivalent to what Question 2’s proponents promised, for decades. Talk about an effective surtax.
Bundles of cash will never lead to better educational results. Liberals love to bark about inadequate education funding and promise more dollars for the system, but few care to address why the state hasn’t met the funding requirement, or why we’ve routinely underperformed despite years of bloated education expenditures.
When a ballot initiative passed by Maine voters in 2004 established the 55 percent state funding requirement, the Maine Legislature adopted the Essential Programs and Services (EPS) funding model. This model, which the state uses to determine expected education costs, calculates what it should cost schools to ensure all students are meeting state education standards.
The EPS allocation for all of Maine is funded through both state and local revenues. To determine the local share of education costs, an established tax rate is applied to each individual district’s property valuations, the combination of which reflects a district’s property wealth per pupil. With this formula, the state considers districts with higher property valuations capable of chipping in more for their education, while districts with lower valuations receive more funding.
However, property valuations are not an accurate indicator of what a town can afford to pay for its schools. Maine is full of rural and coastal areas with seasonal residents that have fewer students and face economic hardships that prevent them from contributing more to their local schools.
While the system intends to ensure low-income districts receive more funding, these appropriations were not always effective for low-income districts before the budget deal.
This flaw is exactly why Question 2 was so detrimental to our students prior to its elimination. Because the local share is determined by property taxes, any revenues generated by the 3 percent surtax would have flown disproportionately to wealthier districts. A more accurate indication of what towns can afford would include the poverty rate and median household income of each district.
The town of Upton, for instance, has a poverty rate over 30 percent and a median household income of $41,250, but would have received zero additional funds from the surtax. Freeport, on the other hand, has a poverty level around 6 percent and a median household income of $73,062, but was set to receive $2.3 million in additional funding from Question 2.
This disparity represents what liberals have coined “education equality.” Luckily, a number of education reforms were included in the budget deal that send more funds directly to the classroom and cap administration costs.
Additionally, a major reason the state misses the funding mark is because sizable portions of our education expenses are excluded from the state’s share of funding. Maine pays pensions and portions of healthcare premiums to retiree’s of our education system. Despite being labor costs associated with education, the state doesn’t factor this figure into its share of spending. If counted toward the state’s share, Maine would be much closer to the 55 percent funding requirement.
If Maine truly wishes to reach the funding mark approved by voters, lawmakers must continue revising the EPS formula or scrap it altogether for something new. Additionally, they should enact legislation that includes expenditures on retiree benefits toward the state’s share of education funding. Perhaps then we can talk about additional funding.
