An independent review of Maine’s public school funding mechanism recommends some significant changes, including a reduction in class sizes and using the now defunct state “circuit breaker” program to lessen the funding formula’s burden on low-income residents of school districts with high property values.

The 256-page report by California-based consultant Picus & Associates will be reviewed Tuesday by lawmakers on the Legislature’s Education Committee. The report was commissioned by the Legislature last year as part of a $450,000 review of the state’s Essential Programs and Services funding formula, which has been criticized by some as inequitable.

The report is the second and final part of the Picus study. The first part, presented in August, recommended the state increase education spending by about $230 million a year, reduce class sizes in kindergarten through fourth grade, implement universal pre-K and increase staff development by five days a year.

In recent months, the Picus team has held a series of forums in communities around the state to discuss education funding and gather opinions on various proposals. In addition to ideas about the funding formula itself, people at the forums: suggested adding resources for economically disadvantaged students; agreed the state should meet its obligation to fund 55 percent of the cost of education; and favored adding transportation as a state obligation.

Attendees also expressed concern that the formula, originally based on the “minimum” amount needed, has become the “maximum” support available, the report said.

The Picus team said it supported several suggestions from teaching professionals, including the state’s funding 100 percent of “high cost” students with disabilities, continuing support for career technical education and adopting a “newcomer” program for English language learners.

The Picus team also recommended the committee consider lowering class size in grades 4-12, adding nursing staff, increasing funding for gifted and talented students, adding administrative staffing and computer technicians, and increasing state support for health care costs, although the team did not necessarily support those moves.

Because the report touches on many major education issues, it is being closely watched by lawmakers in both parties, and by associations representing teachers and education professionals.

“We’re very happy the Picus report shines a spotlight on teacher professional development and making sure resources are funneled to low-income students. That’s been a clear theme through all the presentations,” said Connie Brown, executive director of the Maine School Management Association.

An ongoing issue with funding is the perceived inequities for residents of communities with high property values.

The current funding formula, adopted in 2004, is calculated on prescribed staff-to-pupil ratios, geographic factors and enrollment. Property values determine how much each community should contribute, and the state pays the rest.

Maine is one of more than 40 states that use property valuation to calculate school funding. Districts with higher property values often receive less state aid, which critics say doesn’t always reflect low-income residents’ ability to pay property taxes if a town increases taxes to pay for school funding.

The Picus report found that changing the existing formula “would likely be very expensive and a better approach would be to seek a system that targeted aid more directly to low income households, wherever they are located in Maine.”

Picus & Associates suggested providing direct property tax relief to low- or fixed-income residents through Maine’s homestead exemption, which subtracts $10,000 from the assessed value of a Mainer’s home for the purpose of assessing property taxes, and the circuit breaker program, which provided up to a $1,600 credit to Mainers whose property taxes exceeded 4 percent of their total household income.

Lawmakers repealed and replaced the program in the last session in response to Gov. Paul LePage’s proposal to limit the circuit breaker to people 65 or older and veterans, and to generate additional revenue to balance the biennial budget.

Acting Education Commissioner Jim Rier said Monday that his staff was “anxious to completely review the report,” although it was too early to know how it will play out since much of it consists of recommendations for consideration.

State officials and lawmakers have long debated aspects of the formula, he said.

“It helps to have someone else raising some of these points we’ve looked at before,” Rier said. “There will be a lot of discussion.”

Earlier this year, Picus & Associates reported that Maine’s per-pupil expenditures for K-12 education were among the highest in the United States, but low compared with the rest of New England. It also found that while school funding has grown in recent years, students’ performance has remained relatively flat.

Test scores compared with the rest of the country are relatively strong, the report said, but about average in New England.

According to recent U.S. Census data, from 1999-2000 to 2009-2010 state and local revenue for public K-12 education in Maine grew from $1.62 billion to $2.35 billion, or 45 percent.

During the same period, state and local revenue for K-12 education in all 50 states increased by 49.4 percent.

From 1999-2000 to 2009-10, Maine’s per pupil expenditures grew from $7,595 to $12,259, an increase of 61.4 percent. Average per pupil expenditures on a national level increased from $6,836 to $10,600, a 55.1 percent increase.

Noel K. Gallagher can be contacted at 791-6387 or at:

ngallagher@pressherald.com