March 18, 2013

Teacher retirement cost-shift foes line up in protest at Monday hearing

By Michael Shepherd
State House Bureau

AUGUSTA -- Maggie Stokes, an Oakland fifth-grader, told legislators Monday that she's seeing the effects of stretched budgets in the classroom.

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Maine Commissioner of Education Stephen Bowen presents the projected state subsidies for school districts on Monday, during a hearing of the Legislature's Appropriations and Education committees in Augusta.

Staff photo by Andy Molloy

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RSU 2 Superintendent Virgel Hammonds listens to Maine Commissioner of Education Stephen Bowen present projected state subsidies for school districts on Monday during a hearing of the Legislature's Appropriations and Education committees in Augusta.

Staff photo by Andy Molloy

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The Maine Department of Education on Monday released figures showing how much each school district would pay into the teacher pension fund under Gov. Paul LePage's proposed biennial budget. The budget shifts the required contribution from the state to the districts, then subsidizes the districts' costs based on property valuation.

After the subsidy, the wealthiest 65 districts would pay 100 percent of the cost, 23 districts would pay zero percent, and most fall somewhere in between. Working school employees also pay into the pension fund.

Below is listed how much local districts would pay, as both a total percentage and the dollar amounts.

Fayette: 100 percent ($8,707)

RSU 49 (Albion, Benton, Clinton, Fairfield): 60 percent ($189,426)

Waterville: 60 percent ($175,503)

RSU 11 (Gardiner, Pittston, Randolph, West Gardiner): 55 percent ($162,886)

Winslow: 56 percent ($111,105)

RSU 18 (Belgrade, China, Oakland, Rome, Sidney): 53 percent ($213,065)

RSU 4 (Litchfield, Sabattus, Wales): 51 percent ($114,458)

RSU 2 (Dresden, Farmingdale, Hallowell, Monmouth, Richmond): 46 percent ($154,494)

RSU 9 (Chesterville, Farmington, Industry, New Sharon, New Vineyard, Starks, Temple, Vienna, Weld, Wilton): 43 percent ($139,381)

RSU 59 (Athens, Brighton Plantation, Madison): 43 percent ($62,868)

RSU 38 (Manchester, Mount Vernon, Readfield, Wayne): 41 percent ($84,388)

RSU 54 (Canaan, Cornville, Mercer, Norridgewock, Skowhegan, Smithfield): 38 percent ($149,978)

Augusta: 37 percent ($133,050)

RSU 12 (Alna, Chelsea, Palermo, Somerville, Westport Island, Whitefield, Windsor, Wiscasset): 33 percent ($93,994)

Vassalboro: 29 percent ($19,279)

Winthrop: 23 percent ($26,423)

"A few of the plastic chairs we have are broken," she said. "Others are chipped and damaged, and everyone is careful where they sit so they don't get hurt."

Stokes helped set the tone of a legislative hearing on education changes in Gov. Paul LePage's proposed budget, which featured students telling of rising student-teacher ratios and school administrators lamenting what they have already lost or are planning to cut. A proposed shift of liability for teacher retirement costs from the state to school districts drew the most reaction by students, residents, superintendents and other education advocates who spoke before the Legislature's Appropriations and Education committees on Monday.

About 70 people signed up to testify, according to the committee clerk, and the afternoon hearing ran into the evening.

The proposed retirement change shifts nearly $29 million of the state's $201 million teacher retirement liabilities -- now paid fully by the state -- to districts, which are supported primarily by property taxes. Half of the shift is offset by a $14.5 million increase in general purpose aid.

"The state made a promise decades ago to fund (retirement contributions)," said Lewiston Mayor Robert MacDonald. "Simply put, the state needs to honor its promise to teachers and community."

But according to Department of Education spokesman David Connerty-Marin, "The choices are: do the retirement shift, find the $14.5 million some other way," or convince the Legislature to look outside the department for cuts.

LePage's budget document proposes essentially flat-funding general purpose aid to Maine schools at approximately $895 million in each of the next two years. That would mean keeping education funding at the level reached earlier this year after a LePage-proposed curtailment order reduced the level by $12.6 million.

At the same time, the LePage proposal suspends revenue-sharing to municipalities, which would cost communities just under $200 million over the two-year period.

All told, Sanford Superintendent David Theoharides said Monday, changes in LePage's budget could add up to about a $1 million hit against his York County school district.

"I anticipate I will have to cut 25 teaching and staff positions, significantly reduce our athletic program, eliminate technology purchases for our high school and curtail all of our after-school busing," he said.

Theoharides was among the education advocates who told lawmakers that the retirement change and other proposals amount to a large cost shift to municipal taxpayers.

Legislative Republicans and the governor's office have defended the proposals, saying they ask cities and towns to exert local control to find efficiencies.

The Maine Department of Education released estimates Monday of how each school district would be affected by the retirement changes. The impact on individual districts is based on municipalities' mill rates, or the amount of tax paid per dollar of assessed property value, so that districts that need more support get it, according to the department.

Connerty-Marin said the current system that has the state bearing all retirement costs amounts to taking money from the poor to give to the rich.

The state argues that districts that would receive no state help with the cost of retirement contributions under LePage's plan -- such as the Wells-Ogunquit Community School District in York County -- can afford to bear the cost more than RSU 68, serving four towns in rural Piscataquis County, which the state will still pay for entirely under the plan.

"Because the state currently funds these retirement costs for every school district in Maine regardless of their local funding capacity, it was felt that (sharing the cost) and providing state support through the funding formula is a fairer way of achieving needed savings," said Education Commissioner Stephen Bowen at the hearing.

(Continued on page 2)

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Additional Photos

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Sen. Emily Cain, D-Orono, asks Maine Commissioner of Education Stephen Bowen questions about projected state subsidies for school districts on Monday.

Staff photo by Andy Molloy


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