March 19, 2013

LePage's teacher retirement proposal draws fire

School districts say paying part of the costs will force them to lay off staff and cut other services.

By Michael Shepherd mshepherd@centralmaine.com
Staff Writer

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

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Education Commissioner Stephen Bowen testifies Monday in favor of the state’s plan to have local districts pay a portion of teacher retirement costs.

Andy Molloy/Kennebec Journal

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"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 hearing before the Legislature's Appropriations and Education committees on changes to education funding in Gov. Paul LePage's proposed two-year budget.

Getting the most attention, however, was a proposal to shift some of the liability for teacher retirement costs from the state to school districts.

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

The proposed retirement change would shift nearly $29 million of the state's $201 million in teacher retirement obligations -- now paid fully by the state -- to districts, which are supported primarily by property taxes. Half of the shift would be offset with 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 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 would suspend revenue sharing to municipalities, which would cost communities just under $200 million over the two-year period.

Sanford Superintendent David Theoharides said the changes 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 varies based on equalized property tax rates, meaning 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, which serves four towns in rural Piscataquis County, for which the state will continue to pay the entire obligation.

"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.

In many cases, the proposed cost shift to local taxpayers would be less pronounced than expected, based on the data released Monday.

(Continued on page 2)

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