Education Committee: notes from briefing on funding formula

Wednesday, February 24, 2010: Maine Education Policy Research Institute (MEPRI) briefing:
* Implications of GPA Subsidy Distribution Shifts, including Impact on Minimum Subsidy Receivers
* Review of Income as an Indicator of Ability to Pay

Ed Committee briefing and work session on EPS funding formula

David Silvernail is reporting on ability to pay as a function of property value. Then will get to relation to income.

Critical question: As overall subsidy is function of absolute enrollment, how has per-pupil subsidy changed over time?

Rep Nelson: As statewide subsidy increased (2005-08), should compare local increases against mean state increase. .

Rep Johnson observes that state increased components of GPA over this period, appears artificially to add to state contribution .

Rep Finch: How will new reorganized configurations change this analysis? Should be cautious making changes based on these figures

Silvernail: Largest changes will result from curtailment of GPA, rather than reorg.

Sivernaiil: Problems attributed EPS may, in fact, instead be result from fluctuations in valuation.

Minimum receivers in 2005: 54 districts, 7400 students, $2.4M total subsidy

In FY08, Minimum receivers were up to 81 districts (out of 278), 20K pupils, $18M in subsidy.

Silvernail is presenting the case that subsidy to min receivers, although tiny, did not decrease in proportion to val increases as elsewhere

Rep Johnson: Within min receivers, there are differences in ability to pay. Compare Ogunquit to Greenville

Phil McCarthy corrects Silvernail: State has never fulfilled 100% SpEd reimbursement to min receivers. .

Rep Johnson, Minimum subsidy may have increased due to SpEd%, but still remained under $1K per pupil, small proportion.

Silvernail: So, what is correlation between valuation & income? A: 0.714 (i.e. 49%)

Rep Finch: But that's just residents, not non-resident property owners. Would change be a break for wealthy nonresidents?

Silvernail: Small percentage. Variation in prop value across state is much greater than variation in income.

Silvernail: Modeled 3 different formulas blending valuation and income e.g 85% valuation, 15% income. .

Silvernail: Would need to increase income factor to well over 15% to see significant differences.

Silvernail: If idea is to isolate and benefit units with lower income and high valuation, best method is altering val by inc. % .

Rep Nelson: Interesting - under income models, 'winners' and 'losers' are not necessarily where one would expect.

Rep Lovejoy: Why, under income-weighted models, does Waterville lose subsidy under all three methods while Yarmouth gains?

Silvernail: That just shows that state variations in valuation are more significant that variations in income.