In 2007, Maine's Legislature passed the legislation — Title 20-A, Chapter 103-A — that now governs public schooling.
The substance of the law comes in point 6: “Effective use of public funds, ... [through ... cost efficient organizational structures [sic.]; [and] Administrative structures and efficiencies ... [etc.].” The chief goal of the law is, then, not to reduce school costs (no one expects that) but to reduce the rate at which those costs rise.
The Maine State Department of Education officially reports that all is going pretty well: “school administrative units” down to 179 from 290. On “statewide and local savings,” MSDE says, “by requiring efficiencies in non-classroom functions ... the state is able to reduce annual commitments by ... $30 million annually.”
It all sounds wonderful, on average, but in any massive, statewide program there are bound to be sharp differences between statewide results and local impacts.
In my own town of Buckfield, now a part of RSU 10, I find a completely different story. Under RSU 10's four years of budgets with three episodes of increases, Buckfield's annual expenses for education, have risen from $1.142 million to $1.422 million, with various ups and downs — an increase of $280,000 over three years' experience.
Statistics can help one understand what is going on with scattered data, and the data shows that the average rate of increase for Buckfield under RSU 10 has been $89,400 per year.
The whole point of consolidation is to reduce the rate of increase of spending, so one must look at the history of Buckfield's spending for the previous school regime, SAD 39.
The data available cover six school budgets representing five increases. In that data set, Buckfield's expenses for SAD 39 rose from $0.874 million to $1.074 million — an increase of $199,000.
The SAD 39 data show several strong excursions, one due to lengthy contract negotiations with MEA, with a retroactive salary increase. Linear regression assigns an average rate of increase of $42,800 per year during the SAD 39 regime. Yes! With the help of the state program to reduce the rate of increase in school costs, Buckfield has experienced a doubling of that rate.
There is another serious aspect of this situation. Nearly everyone thinks of and speaks of increases in budgets as a percentage of the current budget: “well, its only an xx percent increase.” This is the path to exponential growth. In fact, that is how exponential growth is defined. And most of us recognize that exponential growth cannot be sustained.
So, I examined the SAD 39 expense record and the RSU 10 record separately for evidence of exponential growth.
For SAD 39, even with its strong excursions in data, I found that school expenses for Buckfield had been growing exponentially; each subsequent year's expense was 1.045 times the previous year's expense: that is compounding at about 4.5 percent. That is a very strong and unsustainable rate of exponential growth in school costs.
Much of Maine was having a similar experience, and thus came consolidation with its goal to reduce the growth rate of spending. But for RSU 10, the figures are these: each year's expense under RSU 10 has been 1.0725 times the previous year's expenses: exponential growth at the rate of 7.25 percent. Seven and a quarter percent. In perspective, exponential growth at 6.99 percent doubles in 10 years.
Clearly something is wrong.
Undoubtedly, schools need more effective financial management; they have for years. But the Legislature thought up this program and then placed a maze of twists, turns and readjustments into school finance.
For example, just as the state's economy began its steep decline due to the national real estate collapse, Buckfield's valuation was jacked up by 48 percent over three years, and the state “contribution” to education correspondingly declined by 6 percent. That decline, often cited by school officials, cannot explain the bizarre perversion of effect that Buckfield is experiencing under the consolidation program: evidence of school administrators' financial naivete.
Note that this perversion of school financing for Buckfield has come with a declining student population and generally problematic student performance. How many other towns are in this fix?
So what is the matter?
It is bad management. School administration officials are seldom, if ever, trained in any aspect of management, not even accounting. Yet the state has embarked on a program to transform the management of public education without doing anything concrete to improve financial management in the schools' standards, training, whatever. I believe it is right to hold the school administrators' feet to the fire: learn or leave.
Doubling in 10 years is neither acceptable nor feasible.
Also, recognize that school boards need leaders; find leaders who grasp the financial facts of education, and elect them.
And for legislators – those up for re-election now — demand they put school finances on a sound managerial basis, whatever that may take.
Charles A. Berg of Buckfield, a professor of mechanical engineering emeritus at Northeastern University, is retired from the faculty of the Massachusetts Institute of Technology and is a former chief engineer of the U.S. Federal Power Commission.