A FRESH LOOK AT SCHOOL TUITIONING:
 It offers regionalization and school choice
(from Maine Townsman, June 2001)
By Douglas Rooks, Freelance Writer

With property taxes on the rise in many communities and another lengthy fight over school subsidies at the Legislature, old questions about how school districts are organized are coming to the fore again. Maine has a large number of districts for a state of its size and rural character – 285 school units compared to 493 municipalities.

Yet regionalization, seen as a means of centralizing services and containing costs, has had a difficult time gaining full acceptance in a state where local control is a jealously guarded tradition. There were a large number of school administration startups in the late 1950s through the 1960s, prompted by the landmark Sinclair Act, and a smaller number prompted by creation of the community school district option, where one school, rather than the whole system is brought under regional administration. But no new SADs have been formed since 1969, and only one CSD has been organized since 1980. The Department of Education prepared a new initiative this year for regionalization by proving financial incentives to form new districts, but the plan was never presented to the Legislature; Gov. King decided not to include it in his budget.

If towns and cities aren’t eager to undertake new regional districts, are there other means to encourage cost sharing and create efficiencies of scale? Could the tuition agreements that now exist in many parts of the state be expanded to create a de facto regionalization without diminishing home rule?

Interviews with some key state and local officials suggest that tuition agreements do have that potential, although, ironically, that potential may be limited by the same forces now working against more formal steps toward regionalization. Still, the sentiment seems to be that anything is worth trying, in light of declining enrollments, relatively high per pupil costs, and limited taxpayer enthusiasm for maintaining, let alone expanding, commitments to education.

How much potential?

Just over 14,000 students are tuitioned to public and private schools at public expense this year, or 6.7 percent of the 213,000 students enrolled statewide.  (The private schools involved are locally chartered schools that have traditionally accepted public school students, often in lieu of a local high school; the figures do not include parochial or other fully private schools.)  The percentage for high school students, grades 9-12, is much higher, however — 16.7 percent, or one in every six students. Just 2 percent of K-8 students are tuititioned.

Tuition students are increasingly sought after and could become an important part of local efforts to obtain state funding for high school additions and new buildings. The state is projecting a major increase in the need to update the state’s high schools, many of which were built 40 years ago and have reached the end of their projected lifespan. Yet declining enrollments statewide and in many districts are making it difficult to justify the expense involved in a new 800-1,000 pupil school, which may cost $20 million or more.

Could tuition agreements play a part in buttressing the case for new regional high schools? “I’d never thought of it in those terms, but now that you mention it, it could have some real possibilities,” said Evan Richert, director of the State Planning Office. Richert has been involved in the school debate since preparing an influential study showing that the state was often building new schools in the suburbs primarily to replace classrooms in older city schools, which were then closed. New state guidelines mandate a preference for established campuses when new schools are being planned – but many of these school districts, particularly in service center communities, are losing students faster than their neighbors. Tuition agreements, at least in theory, might provide a way to keep some students at a city school even after their parents have moved outward.

Jim Rier, who chairs the State Board of Education, said that tuition agreements may figure in some of the building projects recently approved for state funding. In Windham, where 900 students are currently packed into a campus that includes more than 20 portable classrooms, an addition is planned for a total enrollment of 1,000-1,100. About a third of the enrollment comes from neighboring Raymond, which doesn’t have a high school but has no formal link to Windham. “We will probably insist on a long-term tuition agreement as a condition of approving the new school plan,” Rier said. Asked what he meant by long-term, Rier said, “Ten to 15 years. Basically, what it would take to make sure the bond is paid off and the state’s investment justified.”

Education Commissioner Duke Albanese, a strong advocate of regional approaches, said tuition agreement may have some potential in such situations, but he still prefers more formal affiliations, despite the governor’s decision not to go forward with a new incentive program, estimated to have cost $3 million in the first year. “One of the limitations of tuition agreements is that the sending community has no say over how the school is run. That’s a real concern in terms of local control.”

Pitfalls of the past

There’s broad agreement that tuition agreements – particularly those not written for multiple years – can have significant pitfalls. A prolonged dispute about tuition rates and overcrowding in the mid-1990s ultimately led Auburn to terminate agreements allowing Poland, Minot and Mechanic Falls to send students to Edward Little High School, effectively leaving 700 high school students with nowhere to go. The resulting scramble consumed many hours of legislative debate and disrupted funding for other new schools.

“That isn’t something we’d want to see again,” said Jim Rier. “The state spent $18 million for a high school that it probably wouldn’t have had to build otherwise.” Because the new school, built in Poland, was considered an emergency by the Legislature, it deferred approval of several other projects that normally would have been funded, Rier said.

“That situation was difficult,” Commissioner Albanese agreed. “By the time the state was involved, it was too late to keep the two sides together.”

The Legislature has made some changes since the Edward Little controversy erupted. One of the points of contention was whether the sending towns should pay part of the costs of an expanded high school; under existing state law, only operating costs up to the statewide average tuition (currently $5,732) could be charged. Now, school districts can pass on proportional costs for new facilities to towns sending tuition students, and negotiate per pupil fees higher than state average tuition. State construction funding has also been revamped to make it easier to pay for renovations and additions, which might have helped in Auburn. “If we had the current renovation program in place back then,” Rier said, “we might not have had this problem.”

The difficulties of short-term agreements was underlined during the same period when, in the wake of the sudden closing of the Maine Yankee nuclear plant, Wiscasset terminated tuition agreements with several towns which had allowed Wiscasset to build regional middle and high schools, despite its small population (just 2,830 in 1990). Wiscasset had used its cash cow – at its peak, Maine Yankee paid 90 percent of local property taxes – to create one of the best-funded school programs in Maine, with per pupil costs over $9,000 a year. The sending towns were paying half the regular tuition rate and, without the nuclear plant’s contribution, selectmen decided the town could no longer afford the tuition agreements.

Still, Albanese termed the decision “bizarre,” since “most towns would give their eye teeth to have more tuition students.” The possibility of renegotiating the contracts was never explored, and some of the students – those from Dresden – ended up as far away as Hall-Dale, the two-municipality SAD comprised of Hallowell and Farmingdale.

Case study at Cony

One community that would definitely like to expand its number of tuition students is Augusta, which is struggling to replace historic Cony High School, a campus at the end of busy Memorial Bridge that was expanded through a 1970s addition that is now almost literally falling apart. Cony has been placed on academic probation, in large part because of the substandard physical plant, one of only three Maine high schools with that unenviable rating.

Augusta has long been planning to relocate the high school to a site on Cony Street Extension that now houses the vocational-technical center. It has been counting on a 1,200-pupil school but now has just 1,000, including 130 tuition students. Compounding the difficulty is that the capital city’s population declined by 13 percent in the last census.

Roger Levesque, the school department’s executive director for business who’s overseeing the Cony project, notes that the plan finished 29th in the state’s most recent round of funding (the top 22 were funded). In preparing for the next round later this year, he’d like to show at least stable, and hopefully increasing enrollment numbers. And the only way to do that would be to attract more tuition students – something City Manager Bill Bridgeo says will be rendered more difficult by the school’s probationary status. And even if a new Cony gets state funding, it probably couldn’t open until 2005.

Levesque is optimistic that Augusta will have one, and possibly more, tuition agreements in place for the next academic year. It currently has no written agreements, and takes tuition students on a space-available basis. The likely customers would be in School Union 52 (Vassalboro, China, Winslow) and in School Union 51 (Chelsea, Jefferson, Palermo, Somerville, Whitefield, Windsor).

Union 51 would seem to be a particularly attractive target. The six-town union, one of the largest in Maine, has considered many regionalization proposals, but has yet to agree on a particular plan. The latest effort – a regional middle school – was granted the extraordinary dispensation of being approved for state funding even though the CSD that would have built it had not yet been organized. Even that carrot proved insufficient. Of the five towns scheduled to vote on the CSD (Somerville, the smallest, had already opted out), Jefferson defeated it by a 2-1 margin, rendering the other town’s votes meaningless. “I don’t think we’ll try that again,” said Jim Rier of the unusual state funding approval.

“I’m still trying to figure that one out,” said Superintendent Lyford Beverage about the Jefferson tally. “Last year, the same question lost by only 35 votes there.” Each of the six towns in the union operates its own K-8 school, and in the wake of the middle school defeat, Windsor is expanding its existing school. Chelsea has the largest enrollment, 313; Somerville has the smallest, 39. High school students from the six towns attend 15 different schools, though the bulk of them attend Cony, Gardiner Area High School, Hall-Dale and Erskine Academy in China.

Beverage said that Chelsea and one other town, not yet been publicly identified, are the most likely to sign tuition agreements with other schools – but he said it’s unlikely any town will agree to a exclusive agreement, sending all of its students to a single school.

“The school choice movement is alive and well in Union 51,” he said. “Parents really believe in it, and my own views differ from those of many of my colleagues.” On the other hand, he sees educational advantages in providing more predictability. Contracting to have, say, 75 Chelsea students attend Cony and another 75 go to Gardiner – one possible arrangement now being discussed – would give the town more bargaining power and help eighth graders moving on to high school. “We aren’t able to do much to ease the transition now, which can be a difficult thing,” he said.

Nor does he think Union 51 has finished its discussion of regional issues. At a recent meeting of school boards and town officials from all six communities, he asked whether the existing administrative structure would be adequate in 10 years, “and the almost unanimous answer was no.” But whether that would mean breaking up the union, creating a regional district, or simply adding more administrators is as yet unclear. Despite the dissatisfaction with the loosely organized union, no one has yet come up with a solution people can agree on.

Incremental change

Though Duke Albanese’s plan for regionalization didn’t make it to the Legislature, he still believes financial incentives are the way to go. “That’s what the Sinclair Act did. It favored regional districts with extra state money, for a time, and gave them preference for school building funds.” His plan would have granted the additional subsidy to new SADs and CSDs for six to seven years – enough time to provide the actual savings he’s convinced regionalization of schools can provide. After attending a lot of meetings where towns have discussed, but ultimately rejected, forming regional districts, he’s convinced that “only financial incentives will change those results.” Ultimately, he foresees not only combinations among now-separate towns, but mergers between existing SADs, particularly those in sparsely populated Aroostook County.

Tuition agreements, meanwhile, are easier to adopt and much less controversial. With the recent changes in state laws, some disincentives to tuition agreements have been removed. Districts are free to negotiate fees both higher and lower than state average tuition, and to include facility costs in what they charge. It also appears likely the state will require the security of long-term agreements whenever school building projects receive substantial state funding.

But will school districts seek out tuition partners in an entrepreneurial way? In Augusta, Roger Levesque says he would. “I’d be in favor of a CSD with neighboring towns, if that allowed us to build a better school and provide better services to our students,” he said.

Yet in cities the size of Augusta – where schools are a department of municipal government – tuition agreements still seem a more likely option than a regional district.

Tuition agreements are an important tool in a state like Maine, which has several long-established secondary schools that span the boundary between public and private. But more widespread use of tuition will probably depend on local circumstances – and perhaps on a resolution of the long-running debate between the state’s preference for regional districts, and most municipalities’ equally strong preference for independent schools.

 

Tuition Students in Maine
      October 2000

                   K-8                  9-12               Total

          Students             Students            Students

Public Schools                 2,701                   5,742                   8,473

Private School         0                         4,986                    4,986
(with 60% or more public-funded students)
               

In-state private schools      227                       439                       666

Out-of-state private schools  25                        79                      104

Totals     2,983                  11,246                  14,229

 

Local Cost Sharing Within SADs

       Sometimes, state legislation can have an effect even before its enacted by the Legislature. When the board of directors in SAD 60 (Berwick, North Berwick and Lebanon) heard that a commission headed by Jim Rier, chair of the State Board of Education, was proposing legislation to deal with cost-sharing within SADs, it voted to delay appointing a committee that many believed could result in the dissolution of the district (see TOWNSMAN, December 2000).

       SAD 60 was formed by private and special legislation in 1967, and was one of the first regional districts to share costs on a basis other than straight property valuation; it splits assessments 50-50 between student enrollment and valuation. North Berwick, home to Hussey Seating and Pratt & Whitney, has a much higher valuation per pupil than the other towns, and Lebanon and Berwick had threatened to use their voting weight within the SAD to impose a formula based more on valuation. North Berwick responded by asking the Legislature, unsuccessfully, to change the district’s charter to require all three towns to agree to any change. It also pledged to seek withdrawal from the district if the other two towns changed the formula unilaterally. That possibility set off alarm bells with the state; the district is now building a $34 million facility to replace Noble High School.

       Disputes over cost-sharing formulas have become more frequent in recent years. The state has received nine inquiries from SADs and one from a CSD over cost-sharing studies that could lead to withdrawal petitions; several formal withdrawal requests have been filed, although none have yet been approved.

       While Rier was at pains to ensure that the new legislation not apply to any existing disputes – such as the one in SAD 60 – the board of directors there was eager to take a look at the new legislation, according to Superintendent William Bourbon.

       The board voted in February to postpone any action until the Legislature determined what it would do. Both houses have approved the bill, LD 1301, as well as an amendment that would waive the local mandate provisions of state law – meaning that district using the legislation would be required to pay for the services of a facilitator.

       Bourbon said the board “embraced the prospect of new legislation whole-heartedly. They realize what’s at stake here.” The legislation, he believes, will “provide a valuable tool box.” While “the three towns were at odds” over cost-sharing, Bourbon said the SAD board “works well as a team. They were looking for anything that might help us resolve this.”

       LD 1301 would enable districts to construct agreements outside of existing state-approved formulas. These have included arrangements where towns were credited for the state subsidies they would have earned had they been getting state aid on their own, rather than in concert with their SAD partners – one of the “tools” that might be useful in SAD 60. One provision of the new law might prompt more debate, however: If the district uses the new legislation, each town in the district must approve any formula change.