Nov. 7 referendum: Large crowd debates SAD 44 cost sharing proposal

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Jane Ryerson (standing) of Bethel speaks at Thursday's public hearing on a proposed change to the SAD 44 local cost-sharing formula.

At a public hearing Thursday that drew about 150 SAD 44 voters, community leaders and residents lined up on both sides of the question of whether the local school cost-sharing formula should be changed to shift some of the tax burden from Newry to the other three towns.

Voters will answer that question formally Tuesday, Nov. 7, in a district-wide referendum in Newry, Bethel, Greenwood and Woodstock.

Some have seen a change as a way to keep Newry from withdrawing from SAD 44, which would have a serious financial impact on the other towns, according to town and school officials.

Background

If approved Nov. 7, the new cost-sharing method would factor in student population from each member town, instead of the current method of basing town shares entirely on property valuation. The new plan would reduce Newry’s share because the town has only about two dozen students.

The current amounts paid by each town, according to the towns, are as follows: Bethel $2,828,674; Greenwood $1,052,530; Newry $3,048,744; and Woodstock $1,323,885.

The formula plan would phase in the change over eight years. It calls for a 95 percent valuation/5 percent student population ratio the first two years; a 90/10 ratio the next three years; an 88/12 ratio the next two years; and finally an 85/15 ratio beginning the eighth year.

The town managers have calculated the estimated impact over that time on their towns’ respective shares in the $11 million school budget. But they used only current budget figures to estimate, since future amounts are unknown.

With those figures, the cumulative increase (or for Newry, decrease) over the current share for each town as each ratio takes effect appears below.

For the first two years at 95/5: Bethel $92,343; Greenwood $2,672; Woodstock, $39,018; Newry -119,467.

For the next three years at 90/10: Bethel $184,686; Greenwood $5,345; Woodstock $78,035; Newry -$238,934.

For the next two years at 88/12: Bethel $221,623; Greenwood $6,414; Woodstock $93,642; Newry -$286,721.

For the final change to 85/15: Bethel 277,029; Greenwood $8,017; Woodstock $117,053; Newry -$358,401.

The plan was crafted by the town managers and selectboard chairmen from the four towns.

Regarding a potential withdrawal by Newry, the town’s effort to bring about a town vote on the question is currently in limbo. Negotiations with SAD 44 on a withdrawal agreement for Newry voters to consider are stalled. A legislative bill, LD 1336, that would allow for “binding mediation” for such situations, stalled in the state legislature. At the end of June it was sent back to the Education Committee by the legislature, to be carried over until January. The committee had originally recommended unanimously that the legislature pass the bill. Another bill, sponsored by state Rep. Fran Head (R-Bethel) would have prohibited Newry from withdrawing. That died in committee. Some committee members also said the towns should go back and come up with a local solution to their problems.

In another related issue that contributed to discontent in Newry, in 2005 the state legislature had passed a law to allow school districts the choice of factoring student population into their local cost sharing formulas, instead of basing them entirely on valuation. However, the law specifically exempted SAD 44 from that provision, a move that angered some in Newry, who said the town as a whole had not been given an opportunity to weigh in on the proposal.

New information

On Thursday residents heard a presentation from the four town managers and selectboards. They presented the above figures on the overall financial impact on the towns if the measure is approved. In addition, Bethel Town Manager Christine Landes and Woodstock Town Manager Vern Maxfield also provided estimated tax increase impacts on a house valued at $100,000 in their towns over the eight years it would take to gradually implement the tax shift. They stressed the numbers can only be based on recent school budgets because other, future increases are unknown.

Landes said that over that time the estimated tax increase on a $100,000 home in Bethel would be $108. Maxfield said in Woodstock it would be about $40. “It’s not huge, but it is an increase,” he said.

Greenwood Town Manager Kim Sparks did not provide such numbers. She said the impact on Greenwood appears to be minimal. “Greenwood can afford this,” she said, adding that the town does not expect a large influx of new students to create a cost increase under the new formula.

Newry Town Administrator Amy Bernard said she did not calculate an estimated tax decrease because town officials would expect to simply reallocate the savings to municipal expenses.

The boards also presented brief summaries of their reasons for supporting a change:
Bethel: “The change in the funding formula shifts the costs from one formula to another, that is currently used in about 30 percent (estimated) of Maine school districts. This process will allow a cost sharing proposal that will be consistent amongst all the towns in the district. If there is a change in assessment or student population, it will affect each individual town. It is a fair system; that says the four towns listened to Newry’s concerns. We were told by Augusta [legislators] to go back and rectify this issue ourselves, and this is a way to accomplish that.”
Greenwood: “We were informed by Augusta to go back and work this out amongst ourselves. Greenwood invited the towns to start discussing a plan that would be palatable for all towns involved and would help preserve our district and community. Our students and school staff deserve stability and this plan makes that possible.”
Newry: “Newry supports the refunding formula because through numerous public hearings, a majority of Newry voters expressed that the 2005 educational funding exemption was unfair; this current compromise abolishes that exemption, which says that the district communities are listening to Newry’s concerns.”
Woodstock: “The Woodstock Board of Selectmen and town manager are supporting the cost study referendum that offers a compromise to Newry in their efforts to reduce their per pupil cost of education in the MSAD #44 school district in an effort to keep the district together. We also support the School Board for voting to restructure itself, giving three votes each to Greenwood, Woodstock and Newry, and six to Bethel, thereby giving Newry more say on the board than in the past.”

After the presentation, some selectmen and residents offered their personal views on the question. Driving much of the discussion was whether approving the formula would stop Newry from withdrawing, with some saying they wanted to see a guarantee from Newry it would not withdraw during the time the formula was implemented.

Steve Wight of Newry, a former selectman there, led off comments by saying that it would be hard for the other towns to vote themselves additional costs if they can’t be assured of Newry remaining in SAD 44.

Newry selectboard Chairman Gary Wight said the board could provide no guarantee the town would not withdraw even if the new formula is approved, but he said the board planned for the town to vote at the annual Town Meeting in March whether or not to continue the current withdrawal process.

Following is a sampling of other views, listed for those in favor, and then those against, a change:

In favor

Ron Savage, developer (Bethel): Savage said he thought Newry had been “mistreated” and he saw a formula change not as a sacrifice by the other towns but as “almost like giving [Newry] a rebate.” If the proposal is not approved, he said, “I wouldn’t blame Newry for withdrawing.” He said a smaller tax increase over time under the formula would be better than risking an estimated 25 to 30 percent increase in Bethel if Newry withdrew. He asked voters to consider what would happen to real estate in the event of a withdrawal. Potential second home builders, he said, would ask what their tax rate might be. “Imagine if they hear the taxes are going to be $4,000 in Bethel and $2,000 in Newry … The people are not going to have me build in Bethel, they’re going to have me build in Newry,” he said, and Bethel would lose out on new taxable valuation. Savage advocated for showing Newry “goodwill” by supporting the formula change and counting on them to “do the right thing.”

Kelly Scott (Newry deputy town clerk): Scott said over the three years Newry has been looking at withdrawal, she has heard “chatter” on the issue from people coming into the Town Office. She said she thinks many believe the current formula, and the recent state legislation, have been unfair. “I don’t feel the people want to withdraw,” she said. “I think this is a good compromise.”

Dennis Doyon (Greenwood businessman): Doyon said he was concerned about the financial impact of a withdrawal. Noting the state is currently undergoing a rampup in the minimum wage levels, he said that combined with a Newry withdrawal would be “disastrous” for business and the area in general.

Bob Chadbourne (Bethel businessman): While many feel Newry already has a good tax rate, he said, the risk of the town’s potential withdrawal should be considered. “It could be pretty darn tough on the other towns,” he said. “I’m coming around to the point where I’ll vote for it.”

Ron Deegan (chairman of the Woodstock selectmen): While there is nothing binding to keep Newry in the district, he said, there has been “integrity” in the Newry selectmen’s position in supporting the compromise in their town.

Brooks Morton (former Newry selectman): Morton said the other towns had tried to “subjugate” Newry with the legislative bills and quiet the “voice” of the town’s citizens. “This is a compromise. I would support this … because it’s the right thing to do, but recognizing the injustice of 2005. This will help correct it.”

Jim Largess (Newry selectman): Largesss also cited frustration in Newry over the 2005 law change. “It was great to hear some of the comments here saying, ‘We hear you.'” he said. He also noted that if the formula was approved, any of the SAD 44 towns could still consider withdrawal.

Against

Scott Cole (Bethel, former Bethel town manager): Cole said it was “a myth” that Newry had been “mistreated,” and that the same, uniform tax rate for school funding is applied to all the towns – the only fair way to do it, he said. Cole also noted the lack of a guarantee Newry would not withdraw, and he asked selectmen if they would let large amounts of money go out of their office without a binding contract, such as for paving work. Several answered “no,” but Deegan said the comparison was one of “apples and oranges” and not the same situation.

Marcel Polak (Woodstock, SAD 44 School Board member): Polak said he wished there was a “real compromise on the table” to guarantee Newry would drop its withdrawal efforts. He also expressed concern that some Newry citizens have said they plan a petition to call a Town Meeting to raise more funds for the Newry Withdrawal Committee. Polak also wondered what a change in the cost-sharing formula would mean for the remaining towns if Newry left.

Jane Ryerson (Bethel): Ryerson said Newry could raise its current mil rate and still have the best rate in Oxford County. She also said most roads in Newry are maintained privately, not impacting the town’s budget.

Michele Cole (Bethel): Cole asked for “a little more creativity” in coming up with a solution, rather than just pushing the burden onto the other towns. She said there is a symbiotic relationship among the towns, particularly between Newry and Bethel, with everyone contributing to the local economy. “Bethel has to plow the roads for people to get to Sunday River,” she said.

Senator’s input

State Sen. Lisa Keim, who represents much of the Bethel area, said the legislation in Augusta had been “pulled back” with the idea that school withdrawal issues should be solved locally. She said the legislation could be considered again in January if needed, and if not it would “go away.” “We’re waiting on you to do the right thing here,” she said.

The hearing lasted an hour.

Jane Ryerson (standing) of Bethel speaks at Thursday’s public hearing on a proposed change to the SAD 44 local cost-sharing formula.

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