By Ward Peck
Editor
    How will the new state school district consolidation law passed last week affect South Portland and Cape Elizabeth? The short answer is not very much. Both school systems fall under exemptions that allow them to opt out of consolidation without a significant reduction in their state education subsidy. For the long answer, you may want to grab a cup of coffee and a highlighter.
    To help explain the ramifications of the new law, the Department of Education will hold a series of presentations and question-and-answer sessions over the next month. Those interested in learning how the law will affect Cape Elizabeth and South Portland are encouraged to attend a presentation at 7 p.m. on Tuesday June 19 at the Deering High School Auditorium in Portland.
    The School Administration Reorganization was enacted on June 7 as part of the state’s two-year budget and takes effect immediately. The purpose of the law is to reduce school administrative costs and inefficiencies by cutting the number of school districts and administrative units from the more than 200 currently in existence to no more than 80, according to information provided by the State Department of Education. The law is a response to a more sweeping proposal floated in January by Gov. John Baldacci, known as “Local Schools, Regional Support” (LSRS) that would have reduced the number of school districts to 26.
    The new law not only increases the number of allowable school districts, but also changes the process from a top-down to a bottom-up approach. Where LSRS dictated how and with whom districts would consolidate, the new law places that responsibility at the local level. According to a summary of the law provided by the Dept. of Education, “Existing school units should aim to form regional school units of at least 2,500 resident students, except where geography, demographics, population density, transportation challenges and other obstacles make 2,500 impractical. Where 2,500 is impractical, the units must aim to create units of at least 1,200 students.”
    South Portland, with more than 2,500 students already meets this first test and will therefore not be required to consolidate. Cape Elizabeth, with less than 2,500 does not.
    Rep. Cynthia Dill (D-Cape Elizabeth) submitted an amendment that creates an exemption for so-called “high performing, efficient districts” defined as a district that have “administrative costs…less than four percent [of the total] and who have at least three high performing schools, as defined in the May 2007 Maine Education Policy Research Institute report,” according to the summary.
    According to Dill, this exemption is only applicable to five school districts statewide, Brunswick, Yarmouth, SAD 22 (Hamden), SAD 75 (Topsham) and Cape Elizabeth.
    “It makes the case [for exemption] based upon a very narrow and specific definition of high performing and efficient,” Dill said.
    While she was the one who submitted the amendment, Dill characterized the effort to get it included in the law as a team effort.
    “Tons of people were working on this and did the lobbying,” she said.
    Even as exempted school districts, Cape Elizabeth and South Portland will still be required to draft a plan between now and Aug. 31 that demonstrates steps to reduce administrative, transportation, special education and operations and management costs.
According to Dept. of Education spokesman David Connerty-Marin, those cost reductions could come from consolidation of services between districts, even if those districts will remain distinct.
    Cape Elizabeth School Supt. Alan Hawkins and South Portland School Supt. Wendy Houlihan said they have been discussing the possibility of sharing some services such as food service even before the new law was drafted. Houlihan said South Portland already partners with neighboring districts in several areas including English as a Second Language programs it shares with Scarborough.
    Dill said Cape Elizabeth’s alternative plan will be able to show existing efficiencies it has achieved from the town and school’s long-standing cost-sharing partnership. She said it would be unfair to hold Cape Elizabeth, which is already operating an efficient school system, to be held to the same cost cutting standards as less efficient school systems.
    The administrative, transportation, special education and operation and maintenance cut will be needed because, according to Jim Rier, management information systems team leader at the Dept. of Education, the law requires that the per student allocation in those areas that is used to calculate the state’s “Essential Programs and Service” (EPS) education funding formula will be reduced, beginning July 1, 2008.
    EPS is a complex set of formulas the state uses to determine how much it should cost per student to ensure that every student in the state can reach standards based on the Maine Educational Assessment. The Dept. of Education then apportions that cost among school districts based on the number of students and other factors, according to Rier. EPS only recognizes certain school expenditures and is not intended to fund “non-essential programs such as sports.
The state then provides a subsidy to each municipality according to its ability to pay for providing those essential programs and services based on property tax valuations.
    According to Rier, for FY2008, beginning July 1, the state determined each municipality would pay no more than $7.44 per $1,000 of assessed value (the mil rate) to provide essential programs and services with the state subsidizing the difference.
    In South Portland the cost of EPS was determined to be $28.4 million. Because South Portland has a high valuation, it could raise the entire EPS amount without exceeding the maximum mil rate of $7.44. Therefore South Portland is only eligible for the minimum state subsidy, which covers 84 percent of the EPS special education cost or $4.7 million, Rier said.
    Cape Elizabeth’s EPS costs for FY2008 were calculated as $14.6 million, but because its per student valuation is lower, $7.44 per $1,000 of assessed value only covers $11.8 million. The state subsidy represents the $2.8 million difference. In both cases local property tax payers pay for nonessential programs and services.
    Because the law assumes savings from consolidation, the EPS funding formula will reduce the allocation for administration, special education, transportation and operations and maintenance. For instance, the current allocation for administration is $350 per student in the current year but will be reduced to $204 per student next year.
    According to Rier, how this will affect South Portland and Cape Elizabeth remains to be seen, but the communities will be affected differently. Because South Portland only receives the minimum special education subsidy it will not be affected by cuts to other allocation areas. (There is a separate debate in the legislature about reducing the state subsidy for special education however, according to Rier).
    Because Cape Elizabeth is eligible for the full subsidy it is less insulated from cuts to the EPS allocation. Rier said it is impossible to predict the effect because there are too many variables. In addition, as the cost of EPS is expected to come down, the legislature may also increase it’s share of those reduced costs to fulfill its obligation to provide 55 percent of the state’s education costs, Rier said.