BETHEL — Noting that the parties are at an impasse, the SAD 44 School Board last week wrote to the Commissioner of Education asking that the district and Newry suspend negotiations over Newry’s potential withdrawal from SAD 44, and instead pursue a local funding formula change to shift a percentage of Newrys school budget share to the other towns.

Unfortunately, the parties remain far apart, and further negotiations seem very unlikely to be productive, board Chair Lainey Cross and Subcommittee on Withdrawal Chair Marcel Polak wrote to the Commissioner of the Department of Education.

But the chairman of Newrys Withdrawal Committee sees the boards move as a stalling tactic.

The School Board considered in January whether to formally establish a committee of representatives from the four district towns to craft a proposal for a formula that would take student population into account in calculating each towns budget share.

Currently town shares are based entirely on property valuation. Newry has few students and a high valuation, and such a change would lower its share and, some believe, appease at least some Newry residents who otherwise favor withdrawal.

But a majority of directors were concerned it would be difficult to pursue a formula change at the same time the district was negotiating a withdrawal agreement for Newry to vote on.

The board tabled the issue in favor of focusing on preventing Newrys withdrawal by convincing town voters to reject it. The board did say then it could potentially consider a formula-change committee at a later date.

Polak said Tuesday that if the two processes happened at the same time,

Newry voters could override anything the committee and district voters might decide. The formula change committee, he said, “could spend lots of time on it, the district could vote, and Newry could still trump it rather quickly.”

Polak said that in order for a formula change process to work now, a suspension of the withdrawal process (which Newry voters approved last fall) would for all practical purposes have to be a termination.

WITHDRAWAL NEGOTIATIONS

A withdrawal proposal from SAD 44 in February included a plan that Polak described then as having the intent to have Newry pay SAD 44 overall (through a Stabilization Fund originally proposed by the town) the same amount as it does now for 10 years.

For this fiscal year, Newry will pay about $3 million of the approximate $8.2 million local contribution to the budget.

If Newry withdrew and simply tuitioned its students back to SAD 44 beginning the year after withdrawal with no stabilization contributions, the town would pay, according to estimates, between $250,000 and $300,000 a year to SAD 44, leaving the other towns to immediately make up the difference or cut the school budget significantly.

The Newry Withdrawal Committee most recently proposed a 10-year stabilization fund agreement, which would have Newry’s payments gradually decrease and the other three district towns’ gradually increase over that time, according to NWC Chair Jim Sysko. The goal would be by the end of the period to have all towns paying the average per pupil cost for SAD 44.

Polak said Tuesday that even if a shift of costs from Newry to the other towns were to be spread out over a period of years, that change would still total about $2.5 million in today’s dollars. He said other changes in school funding or student population over time could make the financial situation worse for SAD 44.

According to Polak, all four towns are currently paying the same educational tax rate on a $150,000 home, and with the additional municipal taxes the owner of a home in Newry has the overall lowest taxes in the district. He said the School Board feels “that it is not fair to shift the tax burden from second home owners, all of whom we feel can afford to pay taxes, to primary residents and businesses.”

The situation with Newry and SAD 44, he said, is unique in the state.

The School Board letter to DOE states, “The financial consequences of Newry’s withdrawal impede progression of the current negotiations. Under the NWC’s proposal, MSAD 44 estimates a tax shift to its remaining towns of over $3 million annually, only a fraction of which could be recovered by a tuition contract. A withdrawal on such financial terms will create an unsustainable tax shift to Bethel, Greenwood, and Woodstock, the remaining member towns. The tax shift would decrease the taxes from second homeowners and Sunday River Ski Resort and shift the burden mostly to primary homeowners in Bethel, Greenwood and Woodstock. This financial burden inevitably would erode MSAD 44’s ability to provide a quality education to students of the Telstar region.”

Polak said Newry’s withdrawal would, in effect, create a change in the local funding formula without going through a formal district-wide process.

“We’re proposing to pass the decision to determine changes in the funding formula and the future of the district, where it belongs, back to all the citizens of Bethel, Greenwood, Woodstock and Newry,” he said. “Unlike the Andover withdrawal, the Newry withdrawal proposal creates a major change in the funding formula. Our committee does not believe it is appropriate for them to negotiate a new funding formula. In the current withdrawal process, when a change in the funding formula becomes part of a finalized agreement, only Newry voters will have the ability to vote on the agreement. The other towns will not.” 

FORMULA PROCESS

If the School Board did form a district-wide committee to create a new local funding formula proposal, it would be voted on by all four district towns. A majority of the fourtown voters would have to approve, according to district officials. An alteration in the formula could range from changing it to 100 percent based on student population to percentage splits between population and valuation, such as 50/50, 75/25, 85/15, etc.

In January the DOE provided estimates for such theoretical funding changes.

Based on the current all-valuation method, the estimated costs were: Bethel $2,776,555; Greenwood $1,002,645; Newry $2,892,245; Woodstock $1,041,208.

Basing funding 100 percent on student population, the shares were: Bethel $4,315,489; Greenwood $1,098,138; Newry $359,624; Woodstock $1,939,401.

If the formula were based equally on valuation and student population (50/50): Bethel $3,546,022; Greenwood $1,050,391; Newry $1,625,934; Woodstock $1,490,305.

In January Polak said at a School Board meeting that “every possible scenario for changing the funding formula creates an issue for this district in terms of money.”

ROLL THE DICE?

In March Newry elected Jim Largess, who has said he favors improving education in SAD 44 and does not see withdrawal as accomplishing that, to replace incumbent Selectman Brooks Morton. The town also recently voted in favor of the next SAD 44 budget, after voting against it last year shortly after the withdrawal effort began.

Polak was asked if that could be seen as an indication that townspeople might not vote in the required 2/3 majority to leave SAD 44, and whether the School Board has considered a withdrawal agreement with a complete cost shift in one year, in order to put the reality of an immediate, full impact before Newry voters.

He said such a scenario was considered, but that elections can be unpredictable.

“Sometimes when you roll the dice, you lose,” he said. “I would never want to be responsible for that. It would be irresponsible to do a crap shoot.”

NEWRY CHAIRMAN’S REPLY

Sysko said Tuesday his committee had been led to believe last week that a withdrawal agreement counterproposal was on its way from SAD 44, but instead they received the DOE letter.

The Newry negotiators, including Sysko, William Andrews and consultants Dr. Mark Eastman (educational) and Dan Stockford (legal) met Friday, Sysko said.

He said the NWC would not take a formal position on the funding formula change proposal because it is not the panel’s charge.

And, he added, the withdrawal process is spelled out in law and the DOE commissioner does not have the authority to change it.

Sysko said NWC members are still going on the assumption they will continue to negotiate, but “we’re running out of time and money.”

He said a potential withdrawal by Newry will likely now have to be delayed until 2017, and he believes SAD 44 is deliberately trying to delay the process to force the town to use up its time and money.

“They said they would do whatever they could legally to prevent withdrawal,” said Sysko.

About half of the $50,000 approved by Newry voters for the process has been spent, he said.

Sysko said Polak’s description of withdrawal as a funding formula change in itself is “semantics.”

And if the district were to look at a formal change in the formula, he said, Newry’s only leverage would be to keep the withdrawal process going. Otherwise, he said, “Newry will be outvoted.”

But Sysko said the primary focus among withdrawal supporters is the quality of education.

He said a written reaction to the district’s proposal is in the works, and the NWC plans to also send a letter to Newry citizens updating the withdrawal process and mentioning the SAD 44 funding formula request.