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PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:. THE HISTORY OF THE FUNDING FORMULA AND HOW IT WORKS…. - PowerPoint PPT Presentation

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Page 1: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

Page 2: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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

Page 3: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

IS THE PRESENT FUNDING FORMULA FAIR AND EQUITABLE TO ALL TOWNS

AND THEIR TAXPAYERS?• There is basically two ways to look at this

issue:1. 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…

2. 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

Page 4: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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

Page 5: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

LOOKING AT THE ISSUE THROUGH THE LENS OF PER

PUPIL COST FROM EACH TOWN…

Page 6: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

PER PUPIL COST AT THE HIGH SCHOOL STRICTLY BY ENROLLMENT ONLY…

Per pupil cost per formula at 33% Enrollment and 67% Valuation

-

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

years

Bar Harbor

Mount Desert

S.W. Harbor

Tremont

average

Page 7: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

LOOKING AT THE ISSUE THROUGH THE LENS OF AN “EQUIVALENT ABILITY TO PAY TAXPAYER IN EACH

TOWN”…

Page 8: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

TOTAL TAX BURDEN PER “EQUIVALENT ABILITY TO PAY TAXPAYER” IN EACH TOWN FOR A HOUSE WITH

A FULL TAX VALUATION OF $336,000tax burden per similar taxpayer

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

year

s

Bar Harbor

Mount Desert

S.W. Harbor

Tremont

Page 9: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

…FOR A HOUSE WITH A FULL TAX VALUATION OF $500,000

tax burden per similar taxpayer

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

year

s

Bar Harbor

Mount Desert

S.W. Harbor

Tremont

Page 10: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

…FOR A HOUSE WITH A FULL TAX VALUATION OF $1,000,000

tax burden per simila r taxpayer

$-

$5,000

$10,000

$15,000

$20,000

$25,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

year

s

Bar Harbor

Mount Desert

S.W. Harbor

Tremont

Page 11: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

…FOR A HOUSE WITH A FULL TAX VALUATION OF $8,000,000

tax burden per simila r taxpayer

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

year

s

Bar Harbor

Mount Desert

S.W. Harbor

Tremont

Page 12: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

THE COST TO RUN THE HIGH SCHOOL PER “EQUIVALENT ABILITY TO PAY TAXPAYER

IN EACH TOWN…

Page 13: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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?

MDI HS T ax Per 3 Bdrm avg home

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Year

Bar HarborMount DesertS.W. HarborTremontLinear (Tremont)Linear (Mount Desert)Linear (S.W. Harbor)Linear (Bar Harbor)

Page 14: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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?

MDI HS Tax Per 3 Bdrm avg home

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

Year

Bar HarborMount DesertS.W. HarborTremontLinear (Tremont)Linear (Mount Desert)Linear (S.W. Harbor)Linear (Bar Harbor)

Page 15: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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?

MDI HS Tax Per 3 Bdrm avg home

$0

$5,000

$10,000

$15,000

$20,000

$25,000

Year

Bar HarborMount DesertS.W. HarborTremontLinear (Tremont)Linear (Mount Desert)Linear (S.W. Harbor)Linear (Bar Harbor)

Page 16: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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?

MDI HS T ax Per 3 Bdrm avg home

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

Year

Bar HarborMount DesertS.W. HarborTremontLinear (Tremont)Linear (Mount Desert)Linear (S.W. Harbor)Linear (Bar Harbor)

Page 17: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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??

MDI HS T ax Per 3 Bdrm avg home

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

Year

Bar HarborMount DesertS.W. HarborTremontLinear (Tremont)Linear (Mount Desert)Linear (S.W. Harbor)Linear (Bar Harbor)

Page 18: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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???

MDI HS Tax Per 3 Bdrm avg home

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Year

Bar HarborMount DesertS.W. HarborTremontLinear (Tremont)Linear (Mount Desert)Linear (S.W. Harbor)Linear (Bar Harbor)

Page 19: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

WHAT IS THE RELATIVE COST PAID BY TUITION STUDENTS TO ATTEND MDIHS?

$9,5

04

$18,

374

$10,

530

$10,

071

$12,

119

$8,6

71

$-$2,000$4,000$6,000$8,000

$10,000$12,000$14,000$16,000$18,000$20,000

1

INDIVIDUAL TOWNS

MDIHS COST PER STUDENT

bar harbor

mount desert

southwest

tremont

avg/student

tuition wbuilding/laptop surc

Page 20: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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

Page 21: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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

Page 22: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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

Page 23: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

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

Page 24: PUTTING THE MDI HIGH SCHOOL FUNDING FORMULA IN PERSPECTIVE:

LET’S WORK TOGETHER TO KEEP MDI HIGH SCHOOL THE HIGH QUALITY EDUCATIONAL INSTITUTION IT IS

TODAY!!!