Expenses up more than revenue in state K-12 budget proposal

The governor’s proposed biennial budget targets new funding for some key K-12 initiatives, including teacher evaluations and help for struggling schools, but also puts more burden on local property taxpayers because costs are going up higher than increases in state aid.

K-12 cost projections could come down over the next month when the Department of Education refines its estimates, but right now the total cost of education is estimated to go up by $68 million in 2015-2016. At the same time, state aid in the budget is increasing by just over $20 million.  That means local property taxpayers will be asked to pick up the rest, with the required mill rate projected to go from 8.1 to 8.44.

Department officials say the mill rate could and likely will change since the budget numbers driving it had to be submitted in December based on available data. New projections are not expected until sometime in February.

Projected increases, largely based on inflation of current costs, include:

• At least $10 million more for special education.

• A $38 million increase in so-called operating costs covering teachers and other staff that are driven by student counts and the population served, including the economically disadvantaged.

• A $7.5 million increase in the amount districts have to put in for their working teachers’ retirement in 2015-2016; and $8.8 million in 2016-2017.

• $6 million to allow the state to pick up the local share of charter school tuitions – a proposal that will reduce the local tax burden for charter schools in some communities by spreading the cost out across the state.

In addition to those costs, there are increases in some ongoing programs paid for out of the “miscellaneous costs” portion of General Purpose Aid and some new targeted initiatives in what the governor’s office is calling the “Enhancing Student Performance and Opportunity” fund, which also comes out of General Purpose Aid.

In miscellaneous costs those include:

• More than $2 million for data and management support of Essential Programs and Services.

• More than $1 million in 2015-2016 and $1.8 million in 2016-2017 to allow regionalization of services provided by the Maine Center for the Deaf and Hard of Hearing.

• An $800,000 increase for the Maine School of Science and Math in 2015-2016 and $1 million in 2016-2017.

• Increasing a one-time allocation of $650,000 for Bridge Year in the current school year to $1 million in each year of the biennium to expand the program.

Additions to the Enhancing Student Performance and Opportunity fund include:

• $1.5 million in both years of the biennium to help struggling schools.

• $1.5 million in both years of the biennium to help CTE centers attain national certification by acquiring new equipment and having more training for staff.

• $2.5 million to help districts implement new teacher and principal evaluation systems.

The budget also creates outside of General Purpose Aid a special fund to encourage consolidation of administrative services. Specifically the budget provides $5 million each year of the biennium to pay up-front costs for efforts that reduce school administrative costs long term. Districts would have to apply for the funds.

The K-12 education budget is part of the governor’s overall $6.3 billion biennial budget, which is attracting attention largely for its proposed reduction of the state income tax by broadening and increasing the sales tax. The budget is being reviewed by the Appropriations Committee, which can and will make amendments to the proposal before it goes to the full Legislature for a vote.

Contact: Cornelia Brown, executive director cbrown@msmaweb.com
Victoria Wallack, director of government relations and communications vwallack@msmaweb.com
Telephone: 207-622-3473 or 1-800-660-8484

 

LePage’s ridiculous corporate tax giveaway will face legislative scrutiny

By Mike Tipping

Yesterday, the Maine Legislature referred the tax conformity package proposed by Governor LePage to both the Appropriations and Taxation committees for further consideration and initial votes. There, it will face its first real scrutiny.

As I explained in a recent column, the bill includes a ridiculous $6-$10 million tax giveaway to large, mostly out-of-state corporations through a complicated mechanism called “bonus depreciation.” Basically, the provision allows certain large firms to get a tax benefit by pretending that business equipment they purchased in the last year is depreciating at a faster rate than it actually is.

The idea behind the policy, when it’s applied proactively, is to stimulate corporate investment, but the legislation as proposed would apply the bonus retroactively, only benefiting companies who already spent money this way in 2014. LePage’s proposal is, therefore, purely a multi-million-dollar corporate handout with no potential return for the state.

While the measure seems mostly to be flying under the radar (other than my column, there’s been virtually no mention of the handout in the media, and no opposition has been voiced so far by legislative leaders), some lawmakers are gearing up to oppose the giveaway.

“When we’re looking at totally eliminating revenue sharing to towns in the governor’s budget and massive cuts to drugs for elderly, we should be thinking about what’s a higher priority for us,” said Representative Matt Moonen, a Democrat from Portland who serves on the Taxation Committee, when asked about the bill. “Is it towns, cities, drugs for elderly or giving away something in the range of $10 million to big corporations?”

“You’d be hard pressed to find a small business that made $2 million in business equipment purchases last year. This bill benefits big businesses, almost all of them out of state. Is that where we’d want our tax dollars to go?”

Moonen also noted that because the bill is being submitted as emergency legislation, requiring two-thirds support for passage, it would take the opposition of only a bit more than one third of the House or Senate to prevent it from becoming law.

 

 

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LePage proposes under-the-radar corporate tax giveaway

This indefensible idea makes a mockery of the chief executive’s claims of fiscal responsibility.

By Mike Tipping

Over the past couple of weeks, you’ve probably heard a lot about Gov. LePage and his plans for this legislative session. Perhaps you watched his blustery and boisterous inaugural address, or read an analysis of what’s to come in his new budget proposal.

What you probably didn’t hear about, however, is his stealthy attempt to advance one of the most blatantly unnecessary corporate handouts of his governorship.

At 4:09 p.m. on New Year’s Eve, the LePage administration sent out a news release announcing that it would “propose legislation which would conform Maine’s income tax law to federal tax law.” Buried in the fourth paragraph was a note that this package will include “the extension of bonus depreciation.”

Bonus depreciation is a policy that was enacted at the federal level in 2008 as a temporary measure to bolster the economy during the Great Recession. It’s somewhat complicated, but basically it allows large corporations to get an up-front bonus on the amount they deduct from their taxes for wear and tear on equipment and buildings that they’ve just purchased.

The bonus depreciation tax giveaway affects only large corporations – those making purchases of more than $2 million. Smaller businesses making smaller investments are eligible for a different business expense deduction instead.

BIG HANDOUT FOR BIG CORPORATIONS

Thanks to this up-front deduction on their capital spending, along with all the other subsidies they already get for this kind of investment, these large firms are often able to deduct from their year-end taxes more than they actually spent on any new equipment.

There’s significant debate over whether this corporate handout actually does help boost the economy. The available research shows that most corporations just make the same purchases they would anyway and pocket the bonus money.

LePage can’t even try to make this economic argument, however, because his proposed legislation would affect only the 2014 tax year – the one that ended on the day he issued his news release. There is no possible way that his plan will increase business investments in the future, because it rewards only investments that have already been made. It’s an unnecessary windfall for companies that happened to engage in that kind of spending last year.

So how much money is LePage planning to hand over to these corporations? A Maine Revenue Service fiscal impact statement for a similar provision two years ago estimated that it would cost the state $11.6 million in the first year. This is a different year, and the deduction may be structured somewhat differently, but a conservative estimate for the cost of this handout might be somewhere between $6 million and $10 million.

This money would basically be given as an interest-free loan to these corporations – to be paid back, if at all, over the full course of the depreciation of their business assets, which could be decades. If the tax break continued, it would cost that much again every year.

TAX BREAK’S COST EXCEEDS SAVINGS FROM GOVERNOR’S AID CUTS

To put those numbers in perspective, that’s more than LePage has claimed to have saved from all of his cuts to public assistance programs put together.

LePage’s cuts to Temporary Assistance for Needy Families – which went into effect in 2012 and cut off support for 3,000 families – saved the state just $2.5 million a year, according to the governor’s own projections.

The cuts to General Assistance for immigrants that LePage made a centerpiece of his re-election campaign are due to affect 1,000 desperate families and save just $1 million, according to his office’s estimates.

To justify these and other cuts, LePage has often claimed that Maine’s budget is stretched to the limit. How then can he possibly justify this kind of handout to corporations, many of them out-of-state, while gaining absolutely nothing in return?

He can’t. This proposal simply can’t be justified or defended. It makes a mockery of LePage’s claims of fiscal responsibility and shows exactly where his true priorities lie.

Short of shoveling cash into a pile and burning it, it’s hard to think of any budgeting decision less intelligent than just giving money away to corporations that were already well enough off to make more than $2 million in capital expenditures last year.

Will the Republican-controlled Senate and Democratic-controlled House stand up for fiscal sanity and work together to block this ridiculous giveaway, or will LePage be allowed to slip it through? What happens could tell us a great deal about what to expect in Augusta over the next two years.

 

 

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Washington State Democratic Party Committee Votes to Reject Common Core

By djournednthony Cody.

The Central Committee of the Washington State Democratic Party has passed a resolution that roundly condemns the Common Core standards. This is the first time a statewide Democratic Party committee has taken a public position against the Common Core, and it happened in the back yard of the Gates Foundation, which has provided the funding that made the national standards project possible. This could signal a sea-change for the beleaguered standards, because up until now, political opposition has been strongest in the Republican party.

Resolution Opposing Common Core State Standards

WHEREAS the copyrighted (and therefore unchangeable) Common Core State Standards (CCSS) are a set of controversial top-down K-12 academic standards that were promulgated by wealthy private interests without research-based evidence of validity and are developmentally inappropriate in the lowest grades; and

WHEREAS, as a means of avoiding the U.S. Constitution’s 10th Amendment prohibition against federal meddling in state education policy, two unaccountable private trade associations–the National Governors Association (NGA) and the Council of Chief State School Officers (CCSSO)–have received millions of dollars in funding from the Gates Foundation and others to create the CCSS; and

WHEREAS the U.S. Department of Education improperly pressured state legislatures into adopting the Common Core State Standards and high-stakes standardized testing based on them as a condition of competing for federal Race to the Top (RTTT) stimulus funds that should have been based on need; and

WHEREAS as a result of Washington State Senate Bill 6669, which passed the State legislature on March 11, 2010, the Office of the Superintendent of Instruction (OSPI) adopted Common Core State Standards (CCSS) on July 20, 2011; and

WHEREAS this adoption effectively transfers control over public school standardized testing from locally elected school boards to the unaccountable corporate interests that control the CCSS and who stand to profit substantially; and

WHEREAS the Washington State Constitution also calls for public education to be controlled by the State of Washington through our elected State legislature, our elected State Superintendent of Public Instruction and our elected local school boards; and

WHEREAS implementation of CCSS will cost local school districts hundreds of millions of dollars to pay for standardized computer-based tests, new technology, new curricula and teacher training at a time when Washington is already insufficiently funding K-12 Basic Education without proven benefit to students; and WHEREAS some states have already withdrawn from CCSS;

THEREFORE BE IT RESOLVED that we call upon the Washington State legislature and the Superintendent of Public Instruction to withdraw from the CCSS and keep K-12 education student-centered and accountable to the people of Washington State.

Submitted by Sarajane Siegfriedt, Resolutions Chair.

Who Is Profiting From Charters? The Big Bucks Behind Charter School Secrecy, Financial Scandal and Corruption

What we know about the financial incentives offered by charter schools:

More than any other single company, K12 has provoked national outrage on both left and right for poor school performance and questionable financial practices. A 2011 report, for example, showed that K12 had been spending millions in taxpayer funding every year on private advertising rather than actual education. And strangely enough, they were marketing to the Christian homeschooling crowd, not the inner city children for whom these online charters are allegedly being set up. The company has stayed true to its roots, in any case; K12’s base has always been Christian homeschoolers, not actual public education.   READ MORE….

The Reality Tale of Two Education Systems: One for the Poor, and One for the Rest

 

New data reveals our public—not private—school system is among the best in the world.

By Paul Buchheit / AlterNet – January 11, 2015

 

In fact, except for the debilitating effects of poverty, our public school system may be the best in the world.    READ MORE….

 

 

Photo Credit: Jorge Salcedo/Shutterstock.com

Report recommending EPS changes now available

The commission charged with recommending changes to the Essential Programs and Services (EPS) funding formula has released its final report, which offers proposals for expanded pre-kindergarten programs, help for economically disadvantaged students, and teacher professional development.

The report will now go to the full Education Committee for its review.

Click here to see the report: http://sparkflashgap.net/EPS%20Commission%20Final%20Report.pdf

There is a price tag for most of the recommendations made by the commission including:

• Expanded summer school programs at $15 million.
• Teacher professional development and collaborative time at $39 million.
• Phasing out the practice of subtracting how much federal Title I money districts get from their overall EPS allocation. Districts get $44 million in Title I funds, which are aimed at helping lower-income students. Changing how that money is treated under EPS would create winners and losers statewide, if additional funding is not put into GPA to hold losers harmless.
• Increase pre-kindergarten slots so they could be offered to all students who want one. More analysis is needed on exact costs.

The report recommends no change to the controversial Labor Market Areas that affect state aid for teacher salaries.

A phased-in change is recommended for minimum receivers of state aid that currently get 30 percent of their special education costs covered even though 100 percent was promised. The proposal says that special education funding for minimum receivers should increase by 10.3 percent for each 1 percent increase the state makes toward its required 55 percent share of the cost of K-12 education. The state currently is just under 46 percent.

The report also recommends that when calculating that 55 percent the state should not count what it contributes to the unfunded liability for teacher retirement.

Contact: Cornelia Brown, executive director cbrown@msmaweb.com
Victoria Wallack, director of government relations and communications vwallack@msmaweb.com
Telephone: 207-622-3473 or 1-800-660-8484

 

More money for K-12, but costs rising

Home > MSMA News > More money for K-12, but costs rising

The governor’s proposed biennial budget includes an additional $20 million for public schools, but also reflects rising costs and targets some funding to special initiatives like help for implementing standards-based diplomas and teacher evaluation systems.

The rising costs in the K-12 budget include normal retirement costs for teachers, which are going up by $7.5 million. The biennial budget passed in 2013 shifted those costs, which at the time were all paid by the state, onto school districts.  This coming year they are projected at just over $37 million.

The budget also includes the cost of having the state fund 100 percent of charter school tuitions, thereby eliminating the local share. While the cost is not broken out in the budget, it is estimated in the $5-$6 million range based on current enrollments. Language to make that change in state law is not included in the budget, but is expected.

The budget also creates outside of General Purpose Aid a special fund to encourage consolidation of administrative services. Specifically the budget provides $5 million each year of the biennium to pay up-front costs for efforts that reduce school administrative costs long term. Districts would have to apply for the funds.

The proposed budget is just the first step in a long process where the governor’s proposal goes to the Appropriations Committee, which can and does make amendments, and then to the full Legislature. Estimated costs in the budget also will be adjusted as more up-to-date information becomes available.

 

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