The state should close small schools, merge neighboring SADs and totally revamp the way it doles out money.

Otherwise, educational quality and equity are likely to be lost, says a new report by the Maine Center for Economic Policy.

In a 29-page report released this week, the independent research organization based in Augusta looked at the state’s school funding formula and the nearly constant fight for more money.

The formula was established to fairly distribute state money to schools, but the center found that it has become complicated, inefficient and inequitable.

Currently, school systems receive state money based on enrollment, property values and household income. They receive some reimbursement for special education, transportation and debt service and can apply for additional aid to repair old buildings or build new ones.

Big changes

Among 11 recommendations, the center said the state should stop using median household income as part of the funding formula because there are too many anomalies and some poor towns can actually lose aid. The center suggested quickly implementing Essential Programs and Services, which looks at the basic services each school should provide, the number of teachers needed and the number of low-income and special needs students, when deciding funding.

It suggested averaging student enrollment and property valuation over several years to reduce the wild swings of state aid.

It proposed getting rid of the multi-million-dollar “cushions” that soften the blow to districts that lose money.

The center also recommended closing small schools and reorganizing small school districts into larger ones.

It said Maine should phase out school unions, in which towns share a superintendent but little else and instead encourage towns to form school districts, in which they share schools, school boards and administrators.

With declining enrollment across the state, such consolidation might be the best way to save Maine and its school systems money, the report said.

“We don’t suggest just jamming school systems together willy-nilly,” said Christopher St. John, executive director of the Maine Center for Economic policy. “But we’ve got to look at reasonable alternatives.”

St. John believes that the current funding system simply isn’t working. Taxpayers are fed up. School leaders are running into constant financial problems. Lawmakers are continuously arguing over who gets what from the state.

“While I don’t rate this yet at the revolt level, it is getting at a level of concern,” he said.

Still debating

The report’s harsh analysis has so far done little to settle arguments among lawmakers.

Those who saw the report this week applauded it for its analysis of an increasingly complex problem. But they continued to argue about the solutions.

“(The report) fails to acknowledge service centers who would gain from keeping income in the funding formula,” said State Rep. Glenn Cummings, a Portland Democrat and house chair of the Education Committee.

For years, Cummings has fought to increase the weight given to income in the school funding formula. A community may have high property values, he has argued, but “if people don’t have the money to pay those taxes, it’s irrelevant.”

If income were considered as 30 percent of the funding formula – double the 15 percent considered now- Portland, Lewiston, Auburn and SAD 17 in Oxford would would gain money.

Cummings said he would also rather see school systems consolidate “back-end services,” such as payroll and professional development, before school closures or the merging of whole districts. He said that since the state is already looking at implementing Essential Programs and Services, the report contains “old news.”

On the other side, Democratic State Sen. Neria Douglass of Auburn called the report “interesting.”

She liked the center’s proposal to stop factoring income into the formula.

“I don’t think income is really measuring what we want in the funding formula,” she said. “I’m pretty comfortable eliminating it.”

According to the Maine Department of Education, Monmouth, Lisbon, Mechanic Falls and SAD 9 in Farmington would gain money if income was taken out of the formula.

She also liked the idea of regionalizing some schools and merging selected school districts.

“I think we need a long-term plan,” she said.

Douglass, Cummings and other lawmakers said the report is likely to be the topic of debate for a long time, just as state aid will continue to be.

Said St. John, “This is by no means the last word on the subject.”

ltice@sunjournal.com