OXFORD – SAD 17 will be getting a bigger increase in the state education subsidy than projected.

Superintendent Mark Eastman told the school board Tuesday that instead of $116,500, the projected increase in state subsidy in year one will be more like $549,000 under Essential Programs and Services, the state’s new formula for determining state aid for schools.

EPS, passed by the Legislature last year, is expected to be phased in over two years. Initially the district would have seen the bulk of its increase in year two. Eastman, however, said he convinced state officials to spread the increase more evenly over the two years, to lessen the impact on taxpayers.

Gov. John Baldacci unveiled his $5.7 billion budget proposal recently.

“Baldacci took a lot of heat on the plan from superintendents,” Eastman told the board. “I asked him, how do I explain the property tax relief to the taxpayers” that EPS promised to deliver, he said.

The total increase in state subsidy over the two years would be around $1 million, from $15.8 million in fiscal year 2005 to $16.8 million in fiscal year 2007.

“It isn’t like the $1.8 million we’ve been seeing, but it’s significant,” Eastman said.

Eastman said he filed an appeal Tuesday with the state Department of Education over the agency’s interpretation of the district’s transportation funding needs. He said the district has taken steps to regionalize transportation, as the state wanted, yet it now appears the district is being penalized for those efforts.

Eastman said that another problem with the EPS formula is that doesn’t take into account the dramatic jumps in property valuations some so-called “property rich” towns have experienced.

Otisfield property values jumped 19.6 percent from 2003 to 2004, while Harrison’s property values rose 14.83 percent.

Overall, said Eastman, the eight-town district has experienced a 9.8 percent increase in valuation, which is under the state average of 10.8 percent.

SAD 17 is spending $1 million below EPS targets, and Eastman said the district will need to meet those targets before every town will realize property tax relief.

The good news, he said, is that in 2009, when EPS is fully funded, “it appears to have the potential for significant property tax relief.”