The school funding bill that Gov. Paul LePage signed into law this week will deliver more state money to many of Maine’s rural school districts, at the expense of urban and suburban districts in southern and midcoast Maine.

In total, $6.3 million in state funds will be shifted. Although much of the shift will benefit districts in northern and eastern Maine, one of the biggest winners is in Cumberland County, as is one of the biggest losers.

Maine’s largest school district, Portland, will lose out on the most aid under the funding changes, while School Administrative District 61 — Casco, Sebago, Bridgton and Naples — will gain the most.

Supporters of the changes say they are a small step toward restoring fairness to a funding model that benefited larger districts. The model, called Essential Programs and Services, uses complex calculations to allocate state aid on “rational” benchmarks rather than simply giving districts money based on how much they spent the previous year. The model was instituted in 2004.

Under the new law, the formula for allocating state education money is changed by:

Removing a provision that subjects state reimbursement for school personnel benefits to the labor market index.

Adding a provision allowing a 10 percent increase in the staffing ratio for school districts with fewer than 1,200 students.

Giving more money to districts that have many students who qualify for free or reduced-price lunches yet have high property values.

SAD 61, whose rural towns have extensive lakefront property, is an example of a district that will benefit from the changes.

Since the formula was adopted in 2004, the district’s state aid has dropped an average of $1 million per year, said Sherrie Small, finance director for the district. That has driven up property tax rates in the four towns.

This year, voters have twice rejected the district’s proposed budget, in May and June. Now school officials are scrambling to come up with a third proposal for a referendum that will likely be held in August.

Sen. David Hastings, R-Fryeburg, who represents most of the towns in SAD 61, said one of the first votes he cast as a senator was against adopting the Essential Programs and Services formula, because he recognized it would be “unfairly harmful” to the school district.

The towns’ waterfront properties make the district appear wealthy, although most of its taxpayers aren’t. In the last school year, 52 percent of the students qualified for free or reduced-price lunches, compared with the state average of 44 percent.

Because of the high property valuation, SAD 61 is a minimum receiver of state aid. Minimum receivers get as little as 6 percent of their educational costs covered by the state, while some communities get as much as 82 percent.

“I have always told people in the school district, we could solve all your problems if we could drain Sebago Lake and Long Lake,” Hastings said. “Nobody’s taken me up on that.”

When the new formula takes effect, for the year that begins July 1, 2012, SAD 61 is projected to receive over $500,000 more than it did in the 2010-11 budget year.

While most districts in southern and midcoast Maine will lose funding under the new formula, the issue is complicated by the Legislature’s vote this year to boost overall state education aid by $19 million in the year the formula takes effect, so no district will actually receive fewer state dollars than it does today.

Portland, for example, is projected to receive nearly $500,000 more than it did in the most recent budget year. But if the formula had not changed, Portland would have received an additional $1.4 million.

Portland stands to lose the most dollars because it’s the largest school district and has the biggest budget. Most of the other districts in southern Maine will lose the same percentage of state funding.

All school districts will face tough budgets in 2012-13 because stimulus funding from the federal government will be gone, said Pauline Aportria, business manager for the Cape Elizabeth School District.

If the state had not changed the formula, Cape Elizabeth schools would have received an additional $300,000 for 2012-13. The changes will reduce its increase to about $100,000. That means Cape Elizabeth will have to cut school spending or increase property taxes, Aportria said.

The amount of money to be shifted statewide is a tiny fraction of the $914 million in state education aid that will be distributed in 2012-13, said Jim Rier, deputy commissioner for the Maine Department of Education.

But Sen. Justin Alfond, D-Portland, who serves on the Legislature’s Education Committee, said the changes open up the funding formula to political manipulation every year.

He noted that school districts in Washington County stand to gain the most, and that the bill to change the formula was sponsored by Senate President Kevin Raye, a Republican from the Washington County town of Perry.

“Not only are we injecting politics into the funding formula, but the Senate president used his position to whip his caucus into voting mostly for it,” Alfond said.

Raye said the old formula was “Robin Hood in reverse,” and the new law will make it more equitable. The districts that will be helped most are those that have received minimal state aid in the past because they have expensive waterfront properties but have many residents who struggle to pay their property taxes, he said.

His bill “was not about moving money from south to north,” Raye said. “It was about trying to make sure there is equity in the system.”

Staff Writer Tom Bell can be contacted at 791-6369 or at:

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