AUGUSTA, Maine — A November ballot question to raise taxes on high-income Mainers to increase public school funding has encountered deepening opposition in recent days, including the formation of a political action committee to work against it.
Among the No on Question 2’s officers is Jim Rier, who is among the state’s foremost experts on Maine’s public school finance laws. Former Education Commissioner Steve Bowen, who served under Republican Gov. Paul LePage during his first two years in office, often quipped that he’d like to wrap Rier in bubble wrap to protect his skills and institutional knowledge.
Rier took over when Bowen resigned in 2013, but his leadership of the Maine Department of Education was brief. He stepped down after a medical episode in November 2014.
Rier of Topsham is a former member of the State Board of Education who joined the Department of Education as director of finance and operations in 2003. Two years later, he was one of the chief architects of an overhaul of the state’s school funding law.
Rier’s role on the No on Question 2 PAC, which is headed by the Maine State Chamber of Commerce, is as its treasurer and as a technical adviser.
So what is Rier’s argument? And what is the Stand Up for Students campaign’s reaction?
What is the initiative? The Stand Up for Students initiative , which is the result of a citizen petition, would create a 3 percent surcharge on household taxable income in Maine above $200,000. In the first year it would generate an estimated $157 million, which by statute would be earmarked to raise the state’s funding of education to at least 55 percent — a requirement enacted by another citizen initiative in 2004 that has never been met.
The question on the Nov. 8 ballot will read as follows: “Do you want to add a 3% tax on individual Maine taxable income above $200,000 to create a state fund that would provide direct support for student learning in kindergarten through 12th grade public education?”
Rebuilding to pre-recession levels. John Kosinski is the initiative’s campaign manager and the director of government relations for the Maine Education Association, the state’s teachers union and one of the organizations that spearheaded the initiative. He is a mainstay lobbyist on education bills in the Legislature and an outspoken advocate of the state achieving its voter-approved funding obligations.
He said the intent of the initiative is to reverse some of the income tax cuts on high earners that have taken place under LePage and to increase state funding for education, which at $983 million this year is at the same level it was when the recession hit in 2008.
“If you adjust for inflation, we’re actually $83 million short,” Kosinski said. “On top of that, the cost of transportation has gone up, the cost of curriculum has gone up, we now have laws about proficiency-based diplomas, Common Core and new teacher evaluation systems. At the same time we are funding education at the same level we were in 2008.”
Easing upward pressure on property taxes. After the state pays its share, local property taxes cover rest of the tab for public schools, and there are wide variations between what communities can afford. Regardless, the state sets a number every year called the minimum expected tax rate, which is the minimum amount the state demands property taxpayers pay to receive state education funding. More money in the formula on the state side would push that number — which is $8.30 for every $1,000 in property value — down, Kosinski said.
“The 55 percent was always meant to be the floor, not the ceiling, of state education funding,” Kosinski said. “It’s the Chevette model of public education funding, not the Cadillac, and it’s pushing more onto local communities and property taxpayers.”
The initiative would exacerbate existing inequities. The Legislature and state government have been debating for years whether the funding formula is equitable. In other words, does a student from Maine receive the same quality education regardless of where she lives?
The answer is no, and it’s because some communities can afford to spend more than others. Every community is required to pay for the items in the state’s Essential Programs and Services, or EPS, model, which is what the state thinks a school should include, at minimum, but many go above and beyond.
“There are such wide variations today in what school units are spending,” said Rier, who estimates that school districts collectively spend about $158 million above EPS. “While some communities struggle to raise the minimum [required by the state], there are many, many school systems that are exceeding EPS today by 20 to 40 percent.”
Pay more, receive more. Rier used the Lewiston and Portland school districts as examples. Both are property-rich communities, but incomes in Portland are much higher. Rier said Lewiston, which receives about 75 percent of its EPS funding from the state, does not spend any local money beyond the EPS benchmark. Portland, which receives about 19 percent of its EPS funding from the state, exceeds it by some $12 million.
“This initiative, the way it’s written, will flow $3 million to $4 million to Lewiston and about $11 [million] to $12 million to Portland,” Rier said. “It will help Lewiston reach some of their goals, but it will continue increasing Portland’s spending.”
That, Rier said, is why the initiative would widen inequality.
“If you’re looking to equalize education opportunities for students, pushing more money into the funding formula we have now is not an equalizer,” Rier said.
Same issue, different argument. Kosinski said Rier’s argument actually supports the merits of the initiative and that funding levels and distribution formulas are separate issues. The 2004 citizen initiative also called on the state to pay for 100 percent of special education costs. The state is currently paying about 30 percent, which according to Rier is some $40 million short — more evidence that the initiative wouldn’t have the overall impact proponents say it will.
“That’s not a reason to vote against the initiative; that’s a reason to vote for it,” he said. “For 15 years, politicians in Augusta and people like Jim Rier have had the chance to fix this, and they haven’t.”
Funding formula woes? Despite the arguments made by Rier, Maine’s school funding formula is arguably among the most equitable in the country. That was the core finding of a $450,000 study commissioned by the Legislature in 2013. The study by Lawrence O. Picus and Associates recommended that Maine increase tax relief programs for poorer property owners and that the state increase its annual education spending by $260 million or more. Since that report, the state has doubled the Homestead Property Tax Exemption, which is designed to help low earners.
But inequity is clearly present. When the LePage administration enacted an A through F grading system for public schools in 2013, it proved what many have known or suspected for years: There is a direct correlation between schools in poorer areas — as measured by the number of students who qualify for free or reduced-cost lunch — and student achievement.
Directly to the students? Rier has doubts that the initiative would guarantee reduced pressure on property taxes or that the money would be spent as intended — on programs that directly benefit students as opposed to infrastructure or administrative spending.
“We don’t distribute money to schools in that way,” Rier said. “Spending decisions will lie completely with the school board at the local level. … That state doesn’t have control or success at all with targeting money. … Schools hate the idea that they have to target their money for particular purposes.”
Kosinski said this is dealt with in the initiative language and is another way it goes beyond just new funding.
“These school districts are going to have to report every year how they’re using these supplemental funds,” he said. “When this is implemented we’ll have annual reporting to see how the funds are being used and we’ll have a public approval process that has worked well so far.”
It’s hard to vote against schools. Rier acknowledges that voting in favor of the Stand Up for Students initiative might be a “popular choice” for voters, but it’s becoming clear the initiative will have to endure criticism from on high. In addition to Rier and the No on Question 2 PAC, LePage has made his opposition part of his core messaging.
The big question looming for policymakers is whether voters who enacted the 55 percent law in 2004 will flinch or pour on their support, now that it’s connected to a tax increase.