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PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:. THE HISTORY OF THE FUNDING FORMULA AND HOW IT WORKS….
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THE HISTORY OF THE FUNDING FORMULA AND HOW IT WORKS… • THE LAW CREATING THE MDI HIGH SCHOOL CSD INVOLVING THE TOWNS OF BAR HARBOR, SOUTHWEST, MOUNT DESERT AND TREMONT WAS CREATED BY A PRIVATE AND SPECIAL ACT OF THE MAINE STATE LEGISLATURE IN 1963 • ASSESSMENTS WERE AGREED UPON AT THAT TIME, BY ALL FOUR TOWNS, TO BE BASED ON 33% ENROLLMENT AND 67% VALUATION FROM EACH MUNICIPALITY • THE FORMULA WAS AMENDED IN 1997 TO CHANGE THE VALUATION CALCULATION FROM A 1 YEAR TO A 3 YEAR AVERAGE TO SOFTEN THE EFFECT OF RAPIDLY CHANGING VALUATIONS IN ANY OF THE TOWNS
IS THE PRESENT FUNDING FORMULA FAIR AND EQUITABLE TO ALL TOWNS AND THEIR TAXPAYERS? • There is basically two ways to look at this issue: • From a per pupil perspective where the formula is considered fair only if the cost per pupil is the same for every student from every town regardless of the town’s taxpayers ability to pay… • From a cost per “equivalent ability to pay taxpayer” in each town perspective based on the full value of the property the taxpayer owns…in this model a property owner with a higher valued property pays a greater proportion of the cost for each student enrolled at the high school from their town From either point of view all taxpayers in a particular town share in the cost of educating secondary students from their town regardless of whether they have students in school or whether they are a seasonal or summer only resident
How is an “equivalent ability to pay taxpayer” in each town determined? • During the 2005-2006 school year a study was conducted on the most recent home sales of similar dwellings in each town to determine a figure for the 100% valuation of that home for tax purposes. A full-value tax rate was then calculated in order to determine the relative total tax burden on similar properties from all four towns
LOOKING AT THE ISSUE THROUGH THE LENS OF PER PUPIL COST FROM EACH TOWN…
PER PUPIL COST AT THE HIGH SCHOOL STRICTLY BY ENROLLMENT ONLY…
LOOKING AT THE ISSUE THROUGH THE LENS OF AN “EQUIVALENT ABILITY TO PAY TAXPAYER IN EACH TOWN”…
TOTAL TAX BURDEN PER “EQUIVALENT ABILITY TO PAY TAXPAYER” IN EACH TOWN FOR A HOUSE WITH A FULL TAX VALUATION OF $336,000
THE COST TO RUN THE HIGH SCHOOL PER “EQUIVALENT ABILITY TO PAY TAXPAYER IN EACH TOWN…
TAX PAYMENT TO THE HIGH SCHOOL PER “SIMILAR ABILITY TO PAY TAX PAYER” FROM EACH TOWN ON A $336,000 FULL VALUED HOME USING THE PRESENT FORMULA BASED ON 33 % ENROLLMENT AND 67% VALUATION?
TAX PAYMENT TO THE HIGH SCHOOL PER “SIMILAR ABILITY TO PAY TAX PAYER” FROM EACH TOWN ON A $1,000,000 FULL VALUED HOME USING THE PRESENT FORMULA BASED ON 33 % ENROLLMENT AND 67% VALUATION?
TAX PAYMENT TO THE HIGH SCHOOL PER “SIMILAR ABILITY TO PAY TAX PAYER” FROM EACH TOWN ON A $8,000,000 FULL VALUED HOME USING THE PRESENT FORMULA BASED ON 33 % ENROLLMENT AND 67% VALUATION?
WHAT WOULD IT LOOK LIKE FOR THE “SAME ABILITY TAXPAYER IN EACH TOWN IF THE FORMULA WAS BASED ON ALL ENROLLMENT FOR A $336,000 FULL VALUE HOME?
WHAT WOULD IT LOOK LIKE FOR THE “SAME ABILITY TAXPAYER IN EACH TOWN IF THE FORMULA WAS BASED ON ALL VALUATION FOR A $336,000 FULL VALUE HOME??
WHAT WOULD IT LOOK LIKE FOR THE “SAME ABILITY TAXPAYER IN EACH TOWN IF THE FORMULA WAS BASED ON 50% ENROLLMENT AND 50% VALUATION FOR A $336,000 FULL VALUE HOME???
WHAT IS THE RELATIVE COST PAID BY TUITION STUDENTS TO ATTEND MDIHS?
ARE THE TUITION TOWNS PAYING THEIR FAIR SHARE OF MDIHS COSTS PER PUPIL? • All sending towns now pay the maximum amount established by State law for the per pupil cost of their tuition students • Towns are allowed to agree to pay higher than the maximum established amount if they so choose • All sending towns now pay a 10% surcharge, which is the maximum allowable by law, to help with the debt service on the high school building project • All sending towns now pay a surcharge for students with special needs based on a usage formula • All sending towns now pay the full amount for all program costs for students with extraordinary special needs such as 1:1 educational technicians • All sending towns are now paying for, or have agreed in concept to pay for, the cost of the 1:1 laptop computer program for their students • The amounts listed above bring the amount paid by the sending towns for their tuition students very close to the amount per student paid by the town of Bar Harbor which contributes the most local students to the high school enrollment
WHAT IS THE PROCESS OF CHANGING THE FUNDING FORMULA? • All four towns would have to agree to a change in the formula and then petition a local legislator to sponsor a bill to amend the private and special act which created the high school CSD to reflect the new change to the funding formula
HOW DOES AN INDIVIDUAL TOWN WITHDRAW FROM THE HIGH SCHOOL CSD IF THEY ARE UNSATISFIED WITH THE FUNDING FORMULA? • A 2/3’s vote in favor by the residents of a town at a regular or special town meeting would be required in order to withdraw • The withdrawal of a town would have to then be approved by a special act of the legislature • No withdrawal would be permitted by a town while it had outstanding indebtedness
CONCLUSIONS??? • If one looks strictly at per pupil costs then the present funding formula is inequitable and penalizes towns with decreasing enrollment and increasing property values… • If one looks through the eyes of the “equivalent ability to pay” taxpayer in each town then the present formula of 33% enrollment and 67% valuation appears to be the fairest of any of the alternative scenarios
LET’S WORK TOGETHER TO KEEP MDI HIGH SCHOOL THE HIGH QUALITY EDUCATIONAL INSTITUTION IT IS TODAY!!!
