Maine Policy Review Summer/Fall 2013

Summer/Fall 2013 · Vol. 22, No. 2 · $15

Maine Policy Review

Margaret Chase Smith Policy Center

Maine Policy Review

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Volume 22, Number 2

MAINE POLICY REVIEW

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PUBLISHERS MARGARET CHASE SMITH POLICY CENTER Linda Silka, Director

MARGARET CHASE SMITH FOUNDATION Charles Cragin, Chair

EDITORIAL STAFF EDITOR Ann Acheson Margaret Chase Smith Policy Center

MANAGING EDITOR Barbara Harrity Margaret Chase Smith Policy Center

PRODUCTION Beth Goodnight Goodnight Design

WEB SITE MAINTENANCE Catherine Dickerson Margaret Chase Smith Policy Center

DEVELOPMENT Eva McLaughlin Margaret Chase Smith Policy Center

COVER ILLUSTRATION Robert Shetterly

PRINTING Penmor Lithographics

Maine Policy Review (ISSN 1064-2587) publishes independent, peer-reviewed analyses of public policy issues relevant to Maine.

The journal is published two times per year by the Margaret Chase Smith Policy Center at the University of Maine and the Margaret Chase Smith Foundation. The material published within does not necessarily reflect the views of the Margaret Chase Smith Policy Center or the Margaret Chase Smith Foundation.

The majority of articles appearing in Maine Policy Review are written by Maine citizens, many of whom are readers of the journal. The journal encourages the submission of manuscripts concerning relevant public policy issues of the day or in response to articles already published in the journal. Prospective authors are urged to contact the journal at the address below for a copy of the guidelines for submission or see the journal’s website, digitalcommons.library.umaine.edu/mpr/.

For reprints of Maine Policy Review articles or for permission to quote and/or otherwise reproduce, please contact the journal at the address below.

The editorial staff of Maine Policy Review welcome your views about issues presented in this journal. Please address your letter to the editor to:

Maine Policy Review • 5784 York Complex, Bldg. #4 • University of Maine • Orono, ME 04469-5784 207-581-1567 • fax: 207-581-1266 • mcspolicycenter.umaine.edu • mpr@maine.edu

The University of Maine does not discriminate on the grounds of race, color, religion, sex, sexual orientation, including transgender status and gender expression, national origin, citizenship status, age, disability, genetic information or veteran’s status in employment, education, and all other programs and activities. The following person has been designated to handle inquires regarding nondiscrimination policies: Director, Office of Equal Opportunity, 101 North Stevens Hall, 207-581-1226.

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Thanks to…

Major Sponsor

Margaret Chase Smith Foundation Benefactors

Linda Silka and Larry Smith Contributors

H. Allen and Sally Fernald John Gregory Merton G. Henry Roger Katz William Knowles

Samuel A. Ladd III and Nancy E. Ladd Barry K. Mills and Susan G. Mills Peter Mills

Evan Richert Mark Shibles Lee Webb And anonymous Contributors

David Hart Marge Kilkelly and Joe Murray H. Paul McGuire Ethan Miller

Sylvia Most and Alan Cardinal Elizabeth Ward Saxl and Michael Saxl

Basil Wentworth And anonymous Friends

Friends

Volume Twenty-two of Maine Policy Review is funded, in part, by the supporters listed above. Tax-deductible contributions to the journal can be directed to the Margaret Chase Smith Policy Center at: 5784 York Complex, Bldg. 4, University of Maine, Orono, ME 04469-5784.

Donations by credit card may be made through our secure website at digitalcommons.library.umaine.edu/mpr and clicking on “Donate.”

Information regarding corporate, foundation or individual support is available by contacting the Margaret Chase Smith Policy Center.

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Volume 22, Number 2

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TABLE OF CONTENTS

TO OUR READERS . . . . . . . . . . . . . . . . . 6 THE MARGARET CHASE SMITH ESSAY Lessons from Health Reform

by Trish Riley . . . . . . . . . . . . . . . . . . . . . . .

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STUDENT PERSPECTIVE Margaret Chase Library 2013 Student Essay Contest: Improving the American Educational System First Place Essay

by Samantha Leiper . . . . . . . . . . . . . . . . . 78

Second Place Essay

by Brady Davis . . . . . . . . . . . . . . . . . . . . 81

Third Place Essay

by Mariah Damon . . . . . . . . . . . . . . . . . . 84

THANKS TO OUR REVIEWERS . . . . . . . . . . . . . . . . . 86

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TABLE OF CONTENTS

FORUMS Issues in Tax Reform in Maine Richard Woodbury presents some of the features of Maine’s current tax system along with approaches to reform that have been considered in recent years. He discusses how alternative approaches to reform might be evaluated and structured to achieve different goals.

by Richard Woodbury . . . . . . . . . . . . . . . . . . . . . . .

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Policy Changes for a Nutrition Education Program in Maine: Issues and Implications Alan Majka, Janet Fairman, and Kathryn Yerxa draw on their research and state and national statistics to discuss programs addressing food insecurity and nutrition education, including their efficacy, limitations, potential, and threats to their sustanability.

The Distributional Effects of Recent Changes to Maine’s Tax System

by Alan Majka, Janet Fairman and Kathryn Yerxa . . . . . .

Joel Johnson summarizes recent changes to Maine’s income, sales, and property taxes that he argues have made the state and local tax system more regressive.

Contributions from Migrant Hispanic Workers to Maine’s Wild Blueberry Industry

by Joel Johnson . . . . . . . . . . . . . . . . . . . . . . . . . .

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The Impact of Post-Recession State Revenue Reductions on Maine’s Municipalities

by Emily Shaw . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ripples from the East Coast Stream: Vaishali Mamgain describes the vital contribution of Hispanic migrant workers in Maine’s blueberry industry and discusses the potential impact on migrant workers of current and proposed state and federal laws and policies.

by Vaishali Mamgain . . . . . . . . . . . . . . . . . . . . . . .

Based on analysis of Maine Municipal Association fiscal surveys, Emily Shaw describes how municipalities have been forced to restructure the provision and funding of local services since they have received substantially less revenue from the state in the past several years.

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Commentary:

On Maine’s First Charter Schools: Promises and Pitfalls

by Sarah Butler Jessen . . . . . . . . . . . . . . . . . . . . . .

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Improving Educational Opportunity and Equity through School District Consolidation in Maine Christine Donis-Keller, Beth O’Hara-Miklavic, and Janet Fairman analyze the impacts of Maine’s 2007 school district consolidation legislation on educational opportunities and equity within 24 regional school districts.

by Christine Donis-Keller, Beth O’Hara-Miklavic and Janet Fairman . . . . . . . . . . . . . . . . . . . . . . .

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LETTER FROM THE EDITOR

Dear Readers,

ny things thinking about the ma natural en be e I’v d an , ite te’s t passed as I wr d community; the sta Thanksgiving has jus l—family, friends, an ourcefulness. Yet, the state’s kfu an th be n ca ers for which Main resilience and res on s; and our people’s g us continue to live beauty and resource ting, and many amon of foo y ing ak be sh a ll we on e th ain to rem ies related lic po on es economy and finances icl art fid dif rie in ses revenues , we present va the edge. In this issue Several articles focus on the ways Maine rai system and the tax tax le. op nt pe rre the state and its scribes Maine’s cu Richard Woodbur y de analyzing how alternatives might be evalu cult economic times. , ars to ye s t ge en an rec ch t in en red rec at ide th ns reform approaches co hieve different goals. Joel Johnson argues al tax systems more ac loc to d red an tu te uc sta str d de an ma d ve ate ha es tax y ert and prop residents. Emily Shaw Maine’s income, sales, g on lower-income lin fal en rd bu tax avier and provision of local regressive, with a he restructure the funding past several years. to d ha ve ha ies lit ipa e discusses how munic less state revenue in th received substantially ve raha ey th as es vic ser nis-Keller, Beth O’Ha ucation. Christine Do ool district consolidaed on es us foc es icl sch Another group of art pacts of Maine’s 2007 an irman analyze the im regional districts. Al Fa 24 et in Jan d y an uit ic eq av d ikl an M ies in nit y rtu rit po ecu op ins ucational ing food tion legislation on ed d Kathryn Yerxa look at programs address d an , ns tio ita lim an icacy, Majka, Janet Fairman ucation in particular, analyzing their eff budget cuts. Sarah ed te general and nutrition stainability in the face of national and sta vement in light of su er school mo recent threats to their rs Maine’s recent chart Maine’s charter schools vary ide ns co y tar en mm co Butler Jessen’s schools elsewhere, ay ting that like charter ith Library’s 2013 ess national research, no e Margaret Chase Sm al Th . on ies ati nit uc rtu ed po n ca op d eri an s, prove the Am im uld wo in purpose, challenge ey th w ho s to propose contest asked student inning essays. the three top prize-w re he nt ese of Hispanic system; we pr s the vital contribution osed state ibe scr de in ga am M op ue, Vaishali potential impact of pr ith Essay Rounding out the iss err y industry and the Sm eb ase blu e’s Ch t ain are M arg in M ers e ers. And, th migrant work rk wo nt gra e’s experimi ain on M ies m polic rned fro and federal laws and lessons that can be lea are reform under the ng ssi cu dis ce pie ely hc

by Trish Riley is a tim ht of national healt althcare reform in lig he o rig Di th wi ce en umed increased Affordable Care Act. rbara Harrity has ass Ba s. ge an ch of er th a revised layout ve a numb redesigned interior wi e hope that you Here at MPR we ha a ve ha e W r. ito ed naging more modern look. W responsibilities as ma for thought ink give the journal a th we at th s ge an inue to provide food ch nt co ll wi s and other ue iss re tu that this and fu like what you see, and Maine. on policy issues facing

6 MAINE POLICY REVIEW Summer/Fall 2013



Best,

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

My Creed . . .

is that public service must be more than doing a job efficiently and honestly.

It must be a complete dedication to the people and to the nation with full recognition that every human being is entitled to courtesy and consideration, that constructive criticism is not only to be expected but sought, that smears are not only to be expected but fought, that honor is to be earned but not bought.

Margaret Chase Smith

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THE MARGARET CHASE SMITH ESSAY

The Margaret Chase Smith Essay

Lessons from Health Reform

by Trish Riley

A

s full implementation of the Affordable Care Act (ACA) unfolds, it’s hard not to reflect upon Maine’s experiences with health reform. Certainly Maine’s Dirigo Health reform is a microcosm in this sea of change, but a full decade after its enactment the similarities are striking.

Both reforms created subsidized, private health insurance, negotiated by an independent entity; both expanded Medicaid and included strategies to improve quality and lower cost; and both met with strong, well-organized conservative opposition.

States have long experimented with health reform, and in 2003 Maine led the next wave, enacting Dirigo Health Reform.

A campaign promise in John Baldacci’s race for governor, it became law his first year in office, after considerable work and compromise that won strong bipartisan support but only by changing the underpinnings of the program.

Always controversial, Dirigo survived numerous assaults. Governor Paul LePage campaigned to end the program, but instead the program continued and accepted new enrollees, albeit with reduced funding. And, just as Baldacci’s bipartisan advisory group recommended, Dirigo will sunset on December 31, 2013, as enrollees transition to the ACA’s health exchange.

A quick review of Dirigo’s accomplishments: • Covered 40,498 people and 994 businesses with affordable commercial insurance and annually funded MaineCare coverage for about 6,500 low-income parents.1 • Established an independent agency, like Massachusetts and the ACA

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that followed, that negotiated with insurers and bargained on behalf of members for more affordable and quality products.2 • Brought new competition to the market—the nonprofit Harvard Pilgrim Health Plan routinely ranked best health plan by the National Committee for Quality Assurance, became the Dirigo insurance carrier.

• Responded to the market, establishing a voucher program, helping low-wage, part-time workers buy their companies’ insurance and programs for displaced workers and those with pre-existing conditions. Unlike Massachusetts or the ACA, Dirigo subsidized workers in small businesses, not just individuals and families.

• Provided financial incentives for members to select a primary care physician and make appointments for wellness visits—a precursor to the “medical home” supported through the ACA today.

• Covered preventive services with no co-pays required, a provision now part of the ACA. • Bucked national trends by reducing the number of uninsured in Maine, despite the deepest recession since the Great Depression, when employer-sponsored health insurance was waning. In 2003, America’s Health Rankings listed Maine 18th among the states lacking health insurance; in 2011, Maine was sixth best in the country.

• Linked access to health coverage with efforts to limit costs and spur quality. Dirigo established voluntary targets that limited hospital costs to a three percent growth rate; created a state health plan to guide decisions about the health system and to limit how much new technology, equipment and buildings Mainers needed and could afford; and launched the Maine Quality Forum, advocating for high-quality health care and helping consumers make informed healthcare choices.

The ACA establishes a new Patient Centered Outcomes Research Center to improve quality of care nationally. Dirigo also limited how much insurers could spend on marketing, profit and other administrative expenses, a provision now included in the ACA Despite these accomplishments, Dirigo remained controversial. Why? First, the reform established public subsidies for private coverage, anathema to those seeking purely market-based solutions.

Second, Dirigo’s initial funding strategy, including a plan to use significant federal Medicaid funds, was not fully implemented. Insurance companies were expected to trim their costs, negotiate better rates with providers and reduce overall cost growth so that a fee assessed on insurers could be absorbed by cost savings and not passed on to premium payers.

Today, the Institute of Medicine reports that the U.S. wastes $750 billion annually in avoidable health care spending.

In 2003 the public and policymakers were not convinced that the system was capable

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THE MARGARET CHASE SMITH ESSAY

of cost reductions and the insurance industry enjoyed strong support among key policymakers from both parties. As a result, the industry succeeded in allowing the fee to be passed on to premium payers.

The Chamber of Commerce raised concerns about the cost of the pass through and, with insurers, challenged the assessment up to Maine’s Supreme Court where it was upheld. But, just as with the ACA, a favorable court decision does not end controversy.

Each year the Dirigo Health Agency was required to document and prove savings in the health care system before collecting the assessment. That process was costly and contentious; each legislative session saw bills to alter or repeal the program. Even bills correcting problems were amended to add language to weaken Dirigo. The 2008 legislature enacted new funding for Dirigo, a beverage tax, but conservative organizations launched a successful “no new taxes” citizen referendum campaign that rolled back the funding.

Like the ACA, Maine built its coverage initiative on a Medicaid foundation. Although the original plan to use federal Medicaid dollars was revised, Dirigo did support the expansion of Medicaid to cover parents of Medicaideligible children, using program revenue to match federal dollars. And like the ACA, Dirigo included reforms intended to reduce costs. For example, Dirigo proposed a global budget to hold hospitals to fixed rates of growth in exchange for more authority over how to best deliver care. Rather than the fee-for-service system that rewards procedures, this proposal would pay for good outcomes. Hospitals argued, correctly, that they could not be held to a global budget unless it included physicians and other key players who directly influenced health care costs. The global budget was replaced with voluntary targets and a new law allowed hospitals to work together, free from antitrust constraints, to develop systems of care,

laying a framework for the Accountable Care Organization—integrated systems of care, supported by the ACA. The Dirigo reforms were not all successful, but the controversy, like that surrounding the ACA, created a challenging environment. A strong tea-partylike group declared Dirigo a failure before it had a chance to prove its mettle. Much of the criticism focused on Dirigo’s enrollment rates, even though the compromises that won bipartisan support resulted in less funding to meet the original enrollment targets. However, the program failed to recalibrate and project new enrollment goals, allowing critics to claim the program overpromised. But the program continued, thanks to a strong board and staff, political leadership and support from enrollees.

Several years after Dirigo launched, Massachusetts created a similar plan, providing subsidies and linking eligible individuals to private coverage or Medicaid.

Why was Massachusetts able to pull off their reform—much of which mirrored Maine’s—without the controversy Maine experienced? First, Massachusetts had enacted a law decades earlier that required employers to either provide health insurance or pay a fine. Although repealed before implementation, it undoubtedly provided lessons for the new proposal.

Second, the Massachusetts plan did not include cost-containment proposals as Maine did and it won important business and provider support.3 A significant, longstanding federal payment to supplement Massachusetts’ hospitals was ending.

Without it, the state’s hospitals would experience a budget hole of $385 million—a loss that would shift costs to the private sector. Massachusetts needed to retain those dollars and proposed to do so by reinvesting them to subsidize health coverage.

The state requested and received a waiver from federal rules that allowed those funds to be used to fuel the reform and save hospitals and business from big losses.

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So what are the lessons of Dirigo Health?

Separate the facts from the rhetoric: For Dirigo, the compromises that changed and reduced funding were obscured by rhetorical attacks. Little attention was given to Maine’s benefit design, its highly successful system of enrollment and eligibility for subsidies or its still unique ability to provide those subsidies to employees of small businesses. Similarly, few early reports about the ACA discuss successful state exchanges—in October half of the ten states reporting enrollment were exceeding federal enrollment targets.4 Nor do reports make clear that the federal government had a much bigger job than originally intended. Historically states seek flexibility and control to run federal programs. In the case of the ACA, having so many states cede authority to the federal government to run the exchange placed a far greater demand on the federal apparatus.

Controversy and complexity can be the enemy of political will and challenge effective implementation: Elected officials listen to the drumbeat of criticism and, balancing numerous demands before them, grow quickly frustrated with implementation challenges.

That leads to calls for oversight and change. Attending to those calls requires precious time of administrators trying to run the program and fuels public perception about problems without providing balance about what may be going right.

The oversight role is a critical check and balance; keeping elected officials engaged is essential but not always easy. In Maine, some legislators who railed against the program and regularly voted against it, in practice used the program and accepted its subsidies to insure their small businesses. In the Congress, many of the same members who criticized the ACA and repeatedly tried to repeal it now raise sanctimonious voices decrying the web

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THE MARGARET CHASE SMITH ESSAY

site delays that keep their constituents from getting coverage Keep going and stay flexible: Ideological fights will continue, but the focus needs to be on the program and the facts. Is the web site improving? If not, are workarounds in place? Is it increasing coverage? Is it affordable? A program as significant as the ACA is bound to have implementation problems; Medicare and Medicaid did, as did the rollout of Medicare’s drug benefit. Program implementers need to be flexible to respond to problems, and Congressional leaders need to allow the time for that to occur.

Expect the criticism to continue: The rollout of the ACA has been challenging. The high call and web volume facing the new federal exchange may not be a good baseline against which to measure enrollment, but expect to hear the naysayers declare the program a failure because it enrolled far fewer than those who visited the web site. Of course, when the national exchange opened, it wasn’t just interested customers who visited. The press, researchers, students, and possibly people eager to crash the system, logged in to the site.

Medicaid matters: Some Dirigo funds provided the state dollars needed to generate federal matching funds. Because of the federal contribution, Medicaid was a cost-effective way to serve the lowest-income enrollees. The Supreme Court ruled that states could not be required to expand Medicaid under the ACA, but without that program—and its shared federal and state financing—the ACA cannot reach its goals

ACA is landmark legislation designed to redress those problems. To do so requires significant change across the health care system and for all of us. And change is not easy.

Maine’s Dirigo reform reflects the challenge of change and the value of moving forward. The controversy died down, and the program operated smoothly, demonstrating how a subsidy program for private health insurance can be run. While many in Maine think the program ended, it quietly and effectively brought health coverage to nearly 1,000 Maine businesses and at least 47,000 individuals. The ACA deserves the opportunity to reach its goals of making more people eligible for subsidized health care, supporting innovation in how care is delivered and paid for, investing in public health and prevention, and beginning a national conversation about how best to achieve a high-performing, affordable health care system for our nation. -

Trish Riley is a senior fellow at the Muskie School of Public Service, University of Southern Maine and a lecturer at George Washington University. She held appointed positions under five Maine governors and was the principal architect of Dirigo Health Reform. She served as executive director of the National Academy for State Health Policy and is a member of the Kaiser Commission on Medicaid and the Uninsured and of the Medicaid and CHIP Payment and Access Commission.

ENDNOTES 1. Dirigo Health Agency, Oct. 2013.

2. However, the Dirigo Health Agency, poised to become the state’s exchange, will be phased out as the state elected to have the federal government take on that work in Maine.

3. However, in 2012 Massachusetts enacted legislation that will limit the overall growth in health care costs to growth in the state’s economy.

4. “The Mixed State of Health Care Exchanges,” New York Times (October 27, 2013). The table also includes the District of Columbia, which was not meeting enrollment targets, and other states not yet reporting enrollment.

Keep your eyes on the prize: The U.S. spends twice what other developed nations do for health care, yet we leave millions of citizens without coverage and get no better health outcomes. The 10

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MAINE TAX REFORM

Issues in Tax Reform in Maine

by Richard Woodbury Tax reform has been prominent in public policy discussions in Maine for many years. However, there has yet to be comprehensive reform. Richard Woodbury notes that critics have described Maine’s tax system “as some combination of imbalanced, burdensome, unfair, uncompetitive, complex, archaic, and volatile.” He presents some of the features of the state’s current tax system and the approaches to reform that have been considered in recent years.

He discusses how alternative approaches to reform might be evaluated and structured to achieve different goals, and highlights different ways to distribute taxes between residents and nonresidents.

I

n a 2009 study for the Federal Reserve Bank of Boston, “The Struggle for Tax Reform in Maine, 2003–2009,” I described the motivations for tax reform in Maine and reviewed the tax reform initiatives that were considered over this seven-year period (Woodbury 2009). My aim in this follow-up paper is to update the tax-related data from the earlier study, accounting for the tax policy changes that have been enacted since 2009, and to elaborate on the differential impact of alternative approaches to reform.

The last major statewide commission on tax reform completed its work in 2003. Made up of a former governor, former chief justice, former speaker of the House, business leaders, tax accountants and economists, the commission recommended substantial changes to a system they characterized as outdated.

For the past 20 years, the general public and the private sector have voiced concerns about the impact of state and local tax structures on Maine citizens and businesses. While the Maine economy has been undergoing substantial change from a natural resource based and manufacturing economy to a service based economy over the last 25 years, Maine’s tax structure has not changed significantly since Governor Curtis reformed it 33 years ago (Speaker’s Advisory Committee on Tax Reform 2003).

In the decade since their report, tax reform has remained a prominent topic of policy discussion and advocacy. Though changes have been made to aspects of Maine’s tax structure, reforms have been piecemeal rather than comprehensive. Maine’s tax system continues to be described by critics as some

combination of imbalanced, burdensome, unfair, uncompetitive, complex, archaic, and volatile.

Although support for some type of tax reform is nearly universal in Maine, there is no clear agreement on what it should entail, or even on the problems tax reform is designed to fix. To some, the key problem is the burden of property taxes. To some, it is the total of all Maine’s taxes that is the problem and its relationship to the size of government. To some, the key issue is how the system treats lower-income versus higherincome taxpayers—the progressivity (or regressivity) of taxes (see Johnson, this issue). To some, the key problem is economic incentives that drive people or businesses to locate elsewhere. To some, the problem is too many complicating exemptions, deductions, exclusions, credits, and reimbursements. And to still others, the problem is revenue volatility and its disruptive impact on state spending.

In discussing the differential impact of alternative approaches to tax reform, the distribution of taxes between residents and nonresidents is among the issues highlighted in the study presented here. This has particular relevance for Maine because of the many nonresidents who spend time in the state. Since some taxes are imposed on residents only, while others are collected from both nonresidents and residents, there are opportunities through tax reform to change that distribution. Tax relief measures can also be administered in ways that disproportionately benefit residents over nonresidents.

In the remainder of this paper, I consider issues in property tax reform, income tax reform, and sales tax

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MAINE TAX REFORM Figure 1: Gross Property Tax Burden as Percentage of Income

across Maine Households, 2013

PROPERTY TAX REFORM

40%

P

roperty taxes differ from most other forms of taxation because they are imposed on an 30% asset value rather than on a payment stream, such as income or spending. As a result, property 25% taxes may represent a small, moderate, large, or 20% very large fraction of income, depending on the circumstances of the individual homeowner. The 15% wide variability in tax burdens across house10% holds, the very high burden imposed on some households, and the payment of the tax in large 5% annual or semiannual billings make property 0% tax burdens particularly visible. Figures 1 and <3% 3–6% 6–10% 10–20% >20% 2 illustrate the degree to which property tax Tax Burden (% of Income) burdens vary across the population, as estimated Source: Maine Revenue Services estimates, October 2013

by Maine Revenue Services for 2013.

An estimated 38 percent of resident homeowners pay Figure 2: Percentage of Households with High Property less than 3 percent of their

Tax Burden, by Income, 2013 income in property taxes, and 35 percent pay between 3 100% percent and 6 percent of their 90% income. Some 28 percent of households pay more than 6 80% Tax > 6% Income Tax > 10% Income percent of their income; 11 70% percent of households pay more than 10 percent of their 60% income; and 3 percent of 50% households pay more than 20 percent of their income. The 40% proportion of households with 30% high property tax burdens is particularly high at lower 20% income levels, as illustrated by 10% Figure 2.

Though property taxes are 0% collected and spent locally, rather than by the state, there are several things that the state can do to relieve property Income Range taxes. One is to provide Source: Maine Revenue Services estimates, October 2013 targeted property tax refunds to taxpayers who face a particularly high property tax reform, respectively. Specifically, I examine how alternaburden. These are often referred to as property tax tive approaches to reform might be evaluated and struccircuit breaker programs. A second is to create a proptured to achieve different goals, such as progressivity, erty tax exemption, such as the current $10,000 growth, revenue stability, and exportability. exemption on primary residences in Maine. In Maine, 12

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MAINE TAX REFORM

such exemptions generally require the state to reimburse municipalities for at least half of their lost revenues from the exemption. A third approach is to transfer more of the revenues from statewide sources (primarily income and sales taxes) to local governments and local school districts, lessening the amount that needs to be made up through local property taxes.

Each of these approaches has costs to the state. Their distributional effects differ.

Property Tax Circuit Breakers Property tax refund programs, or circuit breakers, are the most narrowly targeted approach to property tax relief, because the funds allocated to them are concentrated entirely on resident taxpayers with the highest individual burden of property taxes. This includes renters, who qualify by apportioning a certain percentage of their rent as the “property tax equivalent” cost of their housing. Some form of circuit breaker program has been in effect in Maine for decades, though program modifications have been frequent.

The most significant circuit breaker expansion was enacted as part of the LD 1 reforms in 2005. The amount of the refunds has been cut back since 2005, and the program was replaced by a much smaller program in 2013. Maximum property tax refunds reached a peak of $2,000 following LD 1, and are just $300 (or $400 for those over age 70) now.

In earlier work with Michael Allen (Allen and Woodbury 2006), we demonstrated the potential for circuit breaker programs to offset the very high property tax burdens imposed on some households in Maine.

Specifically, we analyzed the impact of the LD 1 reforms enacted by the legislature in 2005, including an increase in the maximum refund to $2,000, expanded eligibility to middle-income households, and a phasing out of the benefit at higher income levels. Our study looked at the proportion of households with a high net burden of property taxes—first, without circuit breaker benefits; second, based on the circuit breaker program in effect before LD 1; and third, based on the reformed program after LD 1.

The results of our study, reproduced in Figures 3 and 4 and based on data from the early to mid-2000s, examined the program’s potential tax relief if all eligible households applied for benefits. We showed dramatic potential reductions in the proportion of households with high property tax burdens when using a generous circuit breaker refund program. The reductions in tax

burden were particularly significant among lowerincome taxpayers, as shown in Figure 4. As a frame of reference, the cost to state government of the LD 1 circuit breaker program was about $45 million annually following its enactment in 2005.

Despite a significant scaling back in the circuit breaker formula for 2014, including much smaller maximum refunds, the estimated annual cost of the program is still projected by Maine Revenue Services at about $35 million annually. There are at least two reasons for this. One is that the application process for property tax refunds will be integrated with the filing of state income tax returns. Formerly, only about half of households eligible for circuit breaker refunds applied to receive them. With an integrated and simplified application process, higher participation is projected in the reformed program. Second, the income measurement used to determine program eligibility now conforms to Maine’s definition of adjusted gross income, which excludes Social Security and other previously counted income sources. Under the reformed program, more Social Security beneficiaries in particular are likely to qualify for property tax refunds.

… circuit breakers are the most narrowly targeted approach to property tax relief because [funds] are concentrated entirely on resident taxpayers with the highest … burden of property taxes.

Homestead Exemptions Homestead exemptions, though not means tested, are another form of property tax relief that targets Maine residents only. It is available to resident homeowners on their primary residence, but is not available to renters and does not apply to vacation property. As noted, the current homestead exemption in Maine exempts the first $10,000 in the value of one’s principal residence from being taxed. The level of Maine’s homestead exemption has also been

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MAINE TAX REFORM Figure 3: Effect of Circuit Breaker on Percentage of Maine

Households with Higher Property Tax Burden

today’s $10,000 homestead exemption reduces by just 1 percent the taxable value of a $1 million homestead, but it reduces by 20 percent the taxable value of a $50,000 homestead. Second, the exemption is worth more in communities that already burden taxpayers with high property tax rates. In a community with a high property tax rate, say 25 mils for example, Maine’s current homestead exemption translates roughly into $250 in property tax relief. In a community with a low property tax rate, say 8 mils, the relief would be just $80. Third, because the homestead exemption is only partially reimbursed, non-homestead property owners may pay higher taxes to make up for lost revenues that are not reimbursed.

Higher taxes will generally be paid on property owned by nonresidents, commercial property, and vacation property.

To summarize, the homestead exemption provides more concentrated property tax relief to resident homeowners (relative to nonresident and comAfter LD 1 mercial taxpayers), to lowervalued homes (relative to higher-valued homes), and to communities with higher tax rates already.

35% No Circuit Breaker Before LD 1 After LD 1

25% 20% 15% 10% 5% 0%

>6%

>8%

>10%

>12%

>15%

>20%

Tax Burden

Source: Allen and Woodbury 2006

Figure 4: Percentage of Maine Households with Property

Tax Burden above 6 Percent of Income

90% No Circuit Breaker

Before LD 1

70% 60% 50% 40%

School Funding and Municipal Revenue Sharing

30%

Income Range

Source: Allen and Woodbury 2006

adjusted in past reforms, reaching a level of $13,000 following the LD 1 reforms.

There are at least three distributional implications of the homestead exemption. First, it is worth proportionately more to owners of lower-valued homes than it is to higher-valued homes. For example, 14

MAINE POLICY REVIEW

Summer/Fall 2013

75K

K

K $60 K– $50

–$ 50K

$30 K–

K– $20

$40 K

K $40

K $30

K $20 K– $10

<$

10K

0%

$75

10%

Transfers from state revenues to municipalities and school districts are a broader form of property tax relief. The way the schoolfunding formula works, the state first determines the total amount that it will transfer to local school districts in general purpose aid to education (GPA).

Based on that allocation, the state then calculates a statewide property tax “mil rate expectation” that will raise sufficient additional funds to fully support “essential programs and services” (EPS) at all of Maine’s public schools. When more state resources are allocated to school funding, the statewide mil

K–

20%

$60

Percentage of Households

80%

>$

Percentage of Households

30%

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MAINE TAX REFORM Figure 5: State Expenditures Related to Property Taxes

($ millions, inflation-adjusted)

rate expectation is reduced, thereby lowering property taxes. $1,200 A similar substitution of state funds for local funds occurs $1,000 when the state allocates money for municipal revenue sharing. $800 Given a fixed local budget, more municipal revenue sharing translates into less being required from $600 local property taxes. Of course, the dollars spent by the state on $400 school funding and municipal revenue sharing need not all $200 translate into property tax relief.

It may also allow municipalities $0 and school districts to spend 1996 1998 more than they otherwise would.

There is no broad consensus on the extent to which incremental funding for these programs lowers property taxes, as compared with increasing local spending.

The stated aim of state government is to distribute 5 percent of its revenues to municipalities in the form of municipal revenue sharing and to support 55 percent of the EPS cost of K-12 education. In practice, however, budgetary pressures and other legislative priorities have reduced these allocations. Figure 5 shows real spending by the state on the circuit breaker program, homestead exemption, revenue sharing, and general purpose aid to education, respectively, for fiscal years 1996 through the recently approved 2014 and 2015 budgets. (The historical amounts are inflationadjusted to fiscal year 2013 dollars.)

Figure 5 shows an increase in inflation-adjusted state spending for these purposes from 1996 to 2008, particularly following the enactment of LD 1 in 2005, and then a pronounced drop in funding precipitated by economic conditions and other factors since 2008. (It is worth noting that school enrollment has also declined over this period, from about 214,000 public school students in 1996 to about 185,000 today.) The article by Shaw (this issue) provides further discussion about the changes in revenue sharing and school funding, and the municipal responses to these state revenue changes.

Who Benefits from Each Approach?

Throughout this discussion is an implicit trade-off between the depth and breadth of property tax relief associated with different funding measures. The circuit

Circuit Breaker Homestead Exemption Revenue Sharing School Funding (GPA)

2000

2002

2004

2006

2008

2010

2012

2014

breaker program is the most narrowly targeted, benefiting resident homeowners with high property tax burdens and resident renters with high housing cost burdens. The homestead exemption is the next most targeted, benefiting resident homeowners only, and with larger proportionate benefits to those with less valuable homes and to those with higher property tax rates already.

Incrementally increasing municipal revenue sharing or school funding are broader forms of property tax relief, but their impact across communities is uneven.

Within any community, their effect is to reduce the property tax mil rate across the board for all property tax payers, whether resident or nonresident, primary home or vacation home, residential or commercial. The relief is proportional to what taxpayers pay already. Comparing across communities, however, there are distinct differences between the effects on property taxes of revenue sharing and school-funding support.

For most communities throughout Maine, an increase in general purpose aid to education lowers the EPS mil rate expectation by the same amount—about 0.1 mil per $10 million in incremental state funding— regardless of the existing property tax rate in each community. The exceptions are those communities in Maine, referred to as “minimum receivers,” that have enough property value to raise the full cost of EPS with a tax rate lower than the mil rate expectation. These communities benefit little or not at all from an increase in state funding for education. Though they are a minority of communities in the state, a disproportionate

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Volume 22, Number 2

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MAINE TAX REFORM

number of Maine’s vacation properties are located in minimum receiver communities.

Municipal revenue sharing is allocated across communities using a different formula, where communities with higher property tax mill rates receive larger allocations. Thus, higher-mil-rate communities, including so-called service center communities, are more explicitly targeted. The municipal revenue sharing formula works in a continuous way—the higher the mil rate, the greater the relief provided. The school-funding formula has more of a kink in the formula, where communities on one side of the kink (the minimum receivers) get virtually nothing, whereas communities above the kink (those paying the EPS mil rate expectation) get essentially the same mil rate relief, regardless of overall tax rate.

Illustrative Effects of State-Funded Property Tax Relief

To further illustrate these implications, I estimate the impact on property taxes of allocating an additional $50 million in state resources to four alternative property tax relief measures. The first approach would add $50 million to general purpose aid to education, raising the allocation from $947 million to $997 million, and bringing Maine closer to its stated goal of 55 percent.

The effect of this reform is to lower the statewide mil rate expectation for K-12 education from 7.86 mils to about Figure 6: Impact of $50 Million in Property Tax Relief (Residents) School Funding

Municipal Revenue Sharing

Homestead Exemption

Property Tax Relief

$300

$200

$100

$0

16

$80K home in Waterville

MAINE POLICY REVIEW

$220K home in Portland

Summer/Fall 2013

$600K home in Scarborough

7.34 mils, or by about 0.52 mils in most Maine communities. The property tax savings would be about $50 on a $100,000 home, $100 on a $200,000 home, and $500 on a $1 million home. There would be no property tax savings in minimum receiver communities.

The second approach would add $50 million to municipal revenue sharing, raising the allocation from $65 million to $115 million, and approaching the stated public policy goal of 5 percent. The effect of this policy is to lower the mil rate for all taxpayers throughout the state, but more significantly in communities with higher property tax mil rates already. For example, the 50,000 resident homeowners paying the highest property tax rates would see an average reduction of about 0.96 mils, from 20.61 to 19.65, translating to about $100 in property tax savings on a $100,000 home, $200 on a $200,000 home, and $1,000 on a $1 million home. The 50,000 resident homeowners paying the lowest property tax rates in the state would see an average mil rate reduction of 0.14 mills, from 9.16 to 9.02, or about $15 in property tax savings on a $100,000 home, $30 on a $200,000 home, and $150 on a $1 million home.

The third approach uses the $50 million to increase the homestead exemption from the current level of $10,000 to $30,000. Because municipalities are reimbursed for only half of the lost tax base, this results in an average increase in mil rate of 0.31, from 13.32 to 13.63.

This draws a modestly increased property tax share from nonresident and commercial taxpayers. For all but the most valuable homestead properties, the increase in the exempt amount far outweighs the increase in rate. The property tax savings in an “average” community, therefore, would be about $250 on a $100,000 home, $210 on a $200,000 home, and no savings on a $1 million home.

The fourth approach uses the $50 million to restore the circuit breaker benefit formula enacted in LD 1 in 2005. The effect of this policy varies with the individual circumstances of the property owner or renter. For those without a high burden of property taxes (or rent), there would be no property tax savings from the increased funding. For those with the greatest burden of property taxes (or rent), savings are as much as $2,000 per household.

To further analyze these impacts, I consider three illustrative homesteads and three illustrative nonresident properties, shown in Figures 6 and 7, respectively. (The circuit breaker is not included in these illustrations because its effect—though the

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MAINE TAX REFORM Figure 7: Impact of $50 Million in Property Tax Relief (Nonresidents)

Property Tax Relief

largest of all for residents with high property tax burden—cannot be generalized across properties in the same way.)

In Figure 6, the Waterville residence is illustrative of a modest home in a high-tax-rate community. The Portland residence is illustrative of a typical home in Maine’s largest city. The Scarborough residence is a higher-valued home in a coastal community. Because the homestead exemption benefits high-mil-rate communities and lower-valued properties more, its biggest impact is in the Waterville and Portland illustration. The more valuable Scarborough home benefits most from the lower-mil-rate expectation created by increased school funding.

The nonresident and commercial illustrations in Figure 7 are also instructive. For example, the first illustration is for the same $600,000 Scarborough home included in Figure 6, but owned by a nonresident rather than a resident. The nonresident receives essentially the same property tax relief from additional school funding as the resident, and the same property tax relief from additional revenue sharing as the resident. The homestead exemption, however, increases taxes on the nonresident and commercial taxpayers, while decreasing them on the resident.

Figure 7 also compares two identical homes in Scarborough and Camden owned by nonresidents. The effects of an increase in revenue sharing or the homestead exemption are comparable across these properties.

The effects of school funding, however, are dramatically different. Scarborough is subject to the statewide EPS mil rate expectation, which declines with additional school funding, thereby lowering property taxes.

Camden, on the other hand, is a minimum receiver, able to support EPS costs at a mil rate that is already lower than the statewide rate. Therefore, additional school funding has no impact in Camden. Camden is illustrative of the most highly valued recreational areas of Maine’s coast, lakefront, and mountains where a lot of Maine’s vacation properties are concentrated.

INCOME TAX REFORM

T

hree issues have dominated discussions of Maine’s income taxes. The first is the top tax rate. Because it is higher than most states, it may discourage some individuals and businesses from locating in Maine, thereby

School Funding

Municipal Revenue Sharing

Homestead Exemption

$300 Tax Tax Relief Relief $5,200 $6.900

$200

$100

$0

-$100

Taxes Rise

Taxes Rise

Taxes Rise $4,200

$600K vacation home in Scarborough

$600K vacation home in Camden

$10 mil big box store in Bangor

dampening Maine’s economic performance. The magnitude of this effect, however, is a subject of considerable controversy. The second issue is the progressivity of the income tax, particularly in conjunction with other taxes that burden lower-income households disproportionately. The income tax formula can be calibrated to achieve nearly any progressivity objective. The third issue is the cost of Maine’s many tax exemptions, deductions, credits, and reimbursements that have been incorporated in the system over time. Although each advances some public purpose, they also reduce revenues or require higher tax rates to maintain the same revenues.

Maine’s new income tax formula has tax rates of 6.5 percent and 7.95 percent. Table 1 shows the total income ranges in which a “typical” taxpayer is subject to these marginal tax rates in 2013, assuming they use the standard deduction and earn all income from nonexempt sources.

Those concerned with the competitiveness of Maine’s income tax structure focus on both the 7.95 percent rate and the moderate income level at which that rate is imposed. Figure 8 compares Maine’s 7.95 percent tax rate with the highest rates used in other states, using tax information compiled by the Federation of Tax Administrators for 2013. The figure shows that the 7.95 percent top marginal tax rate in Maine is the ninth highest among the 50 states. The median state has a top marginal income tax rate of 6 percent. Among the states with the highest marginal income tax rates (above 8 percent), New York imposes its highest rate only on individual taxable income above $1 million; California

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Volume 22, Number 2

MAINE POLICY REVIEW

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MAINE TAX REFORM Figure 8: Highest Income Tax Rates by State, 2013

12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1%

Ala sk Flo a rid a Ne w H Neva d a So mpsh a uth i D re Ten akota nes see Wa Texa shi s n Wy gton Pen omi nsy ng lva nia No India rth n Da a Mic kota hig Ari an x Co ona lor ado Ne Kans w M as e Ala xico bam a I Mis llinois sis sip pi Ma Uta ssa chu h Ok setts lah Ma oma ryla Vir nd gin ia Rh ode Ohio Isla Ge nd o Ken rgia tuc ky Lou isi M ana We isso uri st V Co irgini nne a c De ticut law Ne are bra Mo ska nta So Arka na uth n Car sas olin a No rth Idah o Car o li Wi sc na Min onsin nes ot M a Ne aine wY ork Ver DC m Ne w J ont ers ey Iow Ore a go Ha n Cal waii ifor nia

0%

Source: FTA 2013a Table 1:

Total Income Threshold for Each Income Tax Rate in Maine, 2013

Tax Rate

Individual

Married Couple

Four-Person Family

No Tax

<$15,200

<$28,400

<$36,200

6.5% Rate

$15,200–$30,900

$28,400–$59,800

$36,200–$67,600

7.95% Rate

>$30,900

>$59,800

>$67,600

Source: Maine Revenue Services

and New Jersey, above $500,000; Vermont, above $388,350; Washington, DC, above $350,000; Hawaii, above $200,000; Oregon, above $125,000; and Iowa, above $67,230. By contrast, Maine imposes its highest rate on more modest incomes.

Approaches to Reform Proposals for income tax reform in Maine have encompassed two distinct approaches and multiple 18

MAINE POLICY REVIEW

Summer/Fall 2013

specifics. The first would retain the basic structure of the state’s current income tax, which parallels the federal tax system to a significant extent. That is, the state income tax features a progressive rate structure, personal exemptions for filers and dependents, and a choice of standard or itemized deductions. This traditional approach to tax reform involves reducing income tax obligations within the existing framework, such as by adjusting tax rates or tax brackets. This was the approach used in 2011, when the legislature enacted an income tax reduction that took effect in 2013. The reform increased the level of income one needs to earn before being subject to any tax and replaced the four marginal tax rates that existed previously (2.0 percent, 4.5 percent, 7.0 percent, and 8.5 percent) with the current two-rate system of 6.5 percent and 7.95 percent. Figure 9 shows the impact of the reform on taxpayers at different income levels, illustrated by the total tax rate paid by a four-person family using the standard deduction under the old and new systems, respectively.

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MAINE TAX REFORM Figure 9: Income Tax Reform Taking Effect in 2013

(total tax rate for a four-person family using

The second approach to reforming the standard deduction) income taxes would fundamentally change 7% the structural foundation of the system, typically by applying a lower flat-rate tax, 6% eliminating personal exemptions and (standard or itemized) deductions, and 5% replacing them with a tax credit that 4% phases out at higher income levels. By choosing the flat-tax rate and calibrating 3% the magnitude and phase-out of the Old Tax Structure (2012) household credit, one can accomplish 2% New Tax Structure (2013) virtually any distribution of tax burden across income groups. The level of the flat 1% rate determines the highest average tax 0% rate that any taxpayer will pay in the $80K $120K $160K $40K $200K $20K $60K $100K $140K $180K $0 reformed system. The design and calibration of the household credit determines the distribution of reduced tax burden Figure 10: “Gang-of-Eleven” Tax Reform Plans below the flat rate.

(total tax rate for a four-person family) In the current legislative session, a bipartisan group in which I participated presented versions of a more comprehen6% sive income tax reform plan that illustrates this second approach. The so-called gang5% of-eleven plan dropped the top income tax rate by as much as half, eliminated many 4% tax expenditures, and made up for lost revenues from increased sales and excises 3% taxes. Three versions of the gang-of-eleven plan are presented in Figure 10, one with 2% a top income tax rate of 4.95 percent, one with a top rate of 4.5 percent, and one 1% Current, St Ded with a top rate of 4 percent.

Current, 15% Itemizer An innovative feature of the plan was 0% 4.95% Plan a new “sales tax fairness credit,” integrated 4.5% Plan into the income tax formula, that was -1% 4% Plan designed to offset the disproportionate burden of sales taxes on lower-income -2% $80K $120K $160K $200K $40K $20K $60K $100K $140K $180K $0 resident households. The negative tax rates at the left of Figure 10 correspond to these refundable tax credits. Depending on the calibration of the plan formulas, the integrated system, for example, the top tax rate of 7.95 percent is a system could moderate, or even eliminate, the overall highly visible component feature of Maine’s system and regressivity of sales taxes and reestablish progressivity likely deters some individuals and businesses from within a flat-rate income tax structure. locating in Maine. An important insight in designing What are the relative merits of the traditional prothe flat-rate alternative systems is that nobody actually gressive rate structure versus the more innovative flat tax pays a full 7.95 percent of their income in taxes, after with a progressive credit? One clear difference is the accounting for personal exemptions, standard or itemvisibility of the top “published” tax rate. In the current ized deductions, and the portions of income that are View current & previous issues of MPR at: digitalcommons.library.umaine.edu/mpr/

Volume 22, Number 2

MAINE POLICY REVIEW

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MAINE TAX REFORM

taxed at a lower rate. A four-person family with income of $200,000 and itemized deductions of $30,000, for example, now pays about $10,989, or 5.5 percent of its income, in Maine income taxes. The familyâ&#x20AC;&#x2122;s average tax rate of 5.5 percent is much lower than its marginal tax rate of 7.95 percent. A flat tax with a phased-out credit allows the published top tax rate in Maine to reflect the highest average rate, rather than the highest marginal rate. The extent to which economic activity is driven primarily by the published tax rate, the average tax rate or the marginal tax rate, is a subject for another study.

SALES TAX REFORM

M

aine imposes a 5 percent general sales tax (temporarily increased to 5.5 percent), a 7 percent tax on prepared meals and lodging (temporarily increased to 8 percent), a 10 percent tax on rental cars, and a 0.44 percent tax on real estate transfers. Maine also imposes

an excise tax on cigarettes at $2.00 per pack, beer and hard cider at $0.35 per gallon, wine at $0.60 per gallon, and sparkling wine and low-alcohol spirits at $1.24 per gallon. (Those rates include both the base tax rate and a supplementary premium tax.)

Two issues have motivated interest in reforming sales and excise taxes. First, sales and excise taxes have been suggested as the area where the state could increase revenues to offset lower income and property taxes.

Although income and property taxes are generally considered high in Maine, sales taxes are considered at or below the average of states. Thus, sales and excise tax reform is usually advanced as part of an umbrella of reforms that aim to rebalance Maineâ&#x20AC;&#x2122;s tax system more comprehensively. Figure 11 compares the sales tax rate across states, based on summary data from the Federation of Tax Administrators.

At the temporarily raised rate of 5.5 percent, Maine is near the median of states. It is worth noting that

Figure 11: Sales Tax Rates by State 8%

7%

6%

5%

4%

3%

2%

0%

Al De aska law are M Ne w H onta n am psh a Ore ire Co gon lor Ala ado ba Ge ma org Ha ia Lou waii isia n N So ew Y a uth o Da rk ko Vir ta Wy ginia om Mis ing Ok souri lah om a No Uta rth C aro h No ina rth D Wi akota s Ne cons w M in exi c M o Ne aine bra ska O Ark hio ans as DC Flo rid a Ida ho Iow Ken a t Ma ucky ry M land Pen ichig an n s So uth ylvan Car ia olin a V We ermo st V n irg t inia Ma ssa Illinoi s chu set ts Tex as K Co ansa nne s Wa cticu shi ngt t Ari on zo Ne na Min vada nes ota In Mis diana sis s Ne w J ippi Rh ode ersey I Ten sland ne Cal ssee ifor nia

1%

Source: FTA 2013b

20

MAINE POLICY REVIEW

Summer/Fall 2013

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MAINE TAX REFORM Figure 12: Number of Services Taxed by State 160

140

120

100

80

60

40

20

Ne

wH

Ore

go Al n am aska ps Co hire lor ado Ma ssa Illinoi s chu s Mo etts nta Ne na va Vir da g Cal inia ifor n Ind ia ian M a Mic aine hi Mis gan No rth souri Da Ken kota tuc ky Ida Rh h o No deIs o la rth Car nd Ok olina lah om a V So uth ermo Car nt ol Ge ina o Ala rgia b Ma ama ryla Ari nd Lou zona is Pen nsy iana lv Ne ania wY ork Wy Utah om in Flo g Min rida n Ten esota nes see O Ark hio Mis ansas sis sip pi D Kan C Ne s r J as Wi ersey sco Ne nsin b Co raska nne citu c Tex as We st V Iowa irg ini D So elaw a uth are Ne Dako w M ta ex Wa shi ico ngt o Ha n wa ii

0

Source: FTA, 2007 Survey

roughly half of states allow local sales taxes on top of the statewide rates. If we include these additional local rates in the comparison, Maineâ&#x20AC;&#x2122;s rate might be considered that much lower by comparison.

The second issue motivating discussions of sales tax reform involves the appropriate breadth of the sales tax base, and particularly its exclusion of most services. As the composition of consumer purchases has evolved over time to include more services, advocates of reform contend that the sales tax base should also expand.

Advocates of sales and excise tax reform also emphasize the volatility of revenues that results from a narrower tax base. For example, roughly a third of sales tax revenues are attributable to sales of automobiles and construction materials, both of which are highly cyclical industries.

Comparing the sales tax base across states is more complicated, as the definitions of product and service categories that may be subject to tax can differ considerably. The Federation of Tax Administrators, however, conducts a periodic survey of states on 168 potentially

taxable services (FTA 2008). The services included in the survey are not intended to be comprehensive or complete. Nevertheless, they give some sense of the scope of services that may be taxed and of the broad variation among states in the number of such services taxed. Based on data from the last survey in 2007, Figure 12 illustrates the variation across states in the number of service categories taxed in different states.

Based on this measure, Maine appears to have a sales tax base that is narrower than that of most states, taxing 25 of the categories in the survey, compared with 55 at the median (among states with a sales tax), and up to 160 at the extreme.

Sales tax reform proposals include both rate changes and changes to the sales that are subject to tax.

The simplest reforms would raise one or more sales or excise tax rates. For example, increases in the cigarette tax and/or the lodging tax are proposed in nearly every legislative session. More complicated reform proposals would expand the base of the sales tax, most commonly

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Volume 22, Number 2

MAINE POLICY REVIEW

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MAINE TAX REFORM

Illustrative Services in 2007 FTA Survey: Services Taxed in at Least 10 States but Not Taxed in Maine Admissions & Amusements Admission to professional sports events Amusement park admission & rides Circuses and fairs—admission & games Admission to cultural events Pari-mutuel racing events.

Billiard parlors Bowling alleys Membership fees in private clubs.

Admission to school & college sports events Pinball & other mechanical amusements Coin operated video games

37 36 34 31 29 27 27 23 22 19 17

Agricultural Services Landscaping services (including lawn care) 21 Pet grooming 18 Automotive Services Auto service. except repairs, including painting & lube Automotive rustproofing & undercoating Automotive washing & waxing Parking lots & garages Automotive road service and towing services Business Services Commercial linen supply Tire recapping & repairing Exterminating (includes termite services) Telephone answering service Maintenance & janitorial services Window cleaning Security services Armored car services Private investigation (detective) services Credit information, credit bureaus Employment agencies Packing & crating Interior design & decorating Temporary help agencies Computer Software—modifications to canned program Software—custom programs—material 1 Maine

22

25 25 21 21 19

33 28 21 20 19 19 18 16 16 13 11 11 10 10

29 24

Computer (continued) Software—custom programs— professional serv.

Information services Internet Service Providers-DSL or other broadband Mainframe computer access & processing serv.

Construction Carpentry, painting, plumbing & similar trades Gross Income of Construction Contractors Construction service (grading, excavating, etc.)

Water well drilling

14 13 12 11

13 12 12 10

Fabrication, Installation and Repair Services Service contracts sold at the time of sale 32 of TPP Repair labor, generally 24 Labor on radio/TV repairs; other electronic 24 equipment Labor charges—repairs other tangible 24 property Installation charges by persons selling 23 property Labor charges on repairs to motor vehicles 21 Labor charges—repairs to intrastate 20 vessels Installation charges—other than seller 18 of goods Labor charges on repair of aircraft 16 Labor—repairs to commercial 15 fishing vessels Labor—repairs or remodeling 15 of real property Custom meat slaughtering, cutting 14 & wrapping Labor charges—repairs to interstate 11 vessels Labor charges on repairs to railroad 11 rolling stock Leases and Rentals1 Personal property, short term (generally) Personal property, long term (generally) Bulldozers, draglines & const. mach Rental of hand tools to licensed contractors

45 45 45 45

Leases and Rentals1 (contd.)

Aircraft rental to individual pilots, 40 short term Aircraft rental to individual pilots, long term 39 Limousine service (with driver) 16 Personal Services Tuxedo rental Diaper service Health clubs, tanning parlors, reducing salons Laundry and dry cleaning services, non-coin op Gift and package wrapping service Garment services (altering & repairing) Shoe repair Carpet and upholstery cleaning Swimming pool cleaning & maintenance Income from funeral services Water softening & conditioning Fishing & hunting guide services Massage services Storage Automotive storage Marina Service (docking, storage, cleaning, repair) Fur storage Mini-storage Household goods storage Cold storage Food storage Packing & crating Transportation Services Income from intrastate transportation of persons Utility Service Interstate telephone & telegraph, ind.

Interstate telephone & telegraph, res.

Other fuel (including heating oil), res.

Natural gas, residential Sewer and refuse, industrial Water, residential Sewer and refuse, residential

38 23 22 22 21 20 20 19 17 13 13 11 11

19 17 16 14 13 13 10 10

11

27 27 23 22 15 12 11

generally taxes the leasor on the original purchase, but not the consumer leasing the property.

MAINE POLICY REVIEW

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MAINE TAX REFORM Figure 13: Share of Housing Units that Are Vacation Homes by State, 2010 16%

14%

12%

10%

8%

6%

4%

2%

Illin o Kan is sas Oh io DC Iow Ind a Ne iana Co brask nne a cti Ge cut o Ken rgia tuc ky T Ok exas lah Lou oma i Ten siana nes Cal see i Mis fornia sis s Ma ippi ryla Vir nd gin Ne ia v Ark ada Pen ans a nsy lva s Ala nia bam M a Wa issou r shi ngt i Ore on Ne gon w No rth York D Pue akot So rto R a uth ico Rh Dako ode ta Ne Islan w d Ne Jerse Ma w Me y ssa xic o We chuse st V tts No i r gi rth Car nia o Co lina lor ado So U uth Car tah Min olina ne Wy sota om in Ha g Mic waii hig an Ida Ari ho zon a Fl Wi orida sco n Mo sin n De tana law are Ne w H Alas k am psh a Ver ire mo n Ma t ine

0%

Source: FTA, 2007 Survey

to consumer services. Examples are recreational services such as golf, skiing, movies, amusement parks, or concerts; repair services such as for cars, lawn mowers, or appliances; personal property services such as dry cleaning, rug cleaning, car washing, picture framing, or storage; or personal care services such as hair cutting, beauty salons, and massage. The sidebar lists some of the services that the 2007 FTA survey reports as taxed in at least 10 states, but that are not taxed in Maine.

The extent to which Maine could or should expand its sales tax base is a question of considerable political and substantive controversy. No industry now exempt from sales tax wants to lose that exemption. Other policy considerations are avoiding pyramiding (taxing both the inputs to production and the final product); the mobility of business activity across state lines by buyers or providers attempting to avoid the tax (such as those providing professional services); and the potential

regressivity of taxing necessities (such as groceries and household utilities).

TAX REFORM AND EXPORTING

A

s noted in the introduction, there is a large nonresident presence in Maine. Maine’s nonresident population includes at least three categories of people living part of the year in Maine. First, there are the nonresident owners of second homes in Maine’s ocean, lake, and mountain communities. U.S. Census data show that Maine has by far the highest percentage of second homes of any state in the country—more than 118,000 vacation homes—many of which are owned and used for extended periods by nonresident families (see Figure 13). Second, Maine is a highly visited vacation state, symbolized by its “vacationland” motto. The Maine Office of Tourism estimates that there are nearly 15 million nonresident vacation visitors to Maine annually,

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MAINE TAX REFORM

averaging 3.7 nights per visit (Maine Office of Tourism 2013). Third, at least anecdotally, there appear to be sizable numbers of nonresident retirees in Maine, some of whom spend as much as five or six months per year in the state.

The importance of residence to tax policy is best illustrated by two identical retirees, each of whom spends six months in Maine and six months in Florida.

One of them remains a Maine resident, but spends an extended period of winter in Florida. The other carefully documents their presence in the two states to be classified for tax purposes as a Florida resident. When in Maine, both retirees look much the same, driving on Maine roads, using Maine’s hospitals as needed, and enjoying Maine’s communities, environment, and quality of life. One of them is subject to the full weight of Maine’s 7.95 percent income tax. The other is fully exempt from all state income taxes. While Maine cannot impose income taxes on these nonresident retirees, it could draw more revenues from the categories of taxes that nonresidents do pay.

Although the exporting of tax burden to nonresidents is viewed favorably by many, … there are offsetting implications that need to be weighed against these benefits.

Put differently, the weighting of Maine’s income, sales, and property taxes is important to how Maine’s taxes are apportioned between residents and nonresidents. Nonresidents who spend time in Maine are generally exempt from state income taxes, often reside in high-valuation regions with low property tax mil rates, and devote a large portion of their spending in Maine to purchases that are exempt from sales taxes. By taxing consumption more universally and more heavily, proponents argue, the state can allocate the tax burden in rough proportion to the amount of time people spend in Maine (or the dollars they spend in Maine), rather than whether they are defined as residents or nonresidents. The revenues from consumption taxes, which are 24

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imposed on both residents and nonresidents, can then be directed to income tax and property tax relief that benefits Maine residents almost exclusively.

Each of the comprehensive tax reform proposals of the last decade—none of them successfully enacted—has clearly emphasized the goal of exporting more of Maine’s taxes to nonresidents. For example, LD 1925 in 2007 was a revenue neutral proposal, explicitly entitled “An Act to Cut Taxes on Maine Residents by over $140,000,000.”

The pared-down version of tax reform introduced as LD 1088 in 2009, also revenue neutral, was entitled “An Act to Modernize the Tax Laws and Provide over $75,000,000 to Residents of the State in Tax Relief.” Maine Revenue Services estimated that the further pared-down tax reform bill that was ultimately vetoed by citizen referendum in 2010, LD 1495 would reduce the tax burden on Maine residents by about $50 million.

The recent gang-of-eleven reform plan proposed an even larger shift away from income taxes and toward sales and excise taxes than any of these earlier plans. It also contained a proposal for a $50,000 homestead exemption that would have provided additional property tax relief targeted at residents. Though the degree of exporting in the plan was not estimated, the intent was to raise about $700 million in additional annual revenues from sales and excise taxes (paid by residents and nonresidents alike), while providing $700 million in resident-targeted tax relief through Maine’s income and property tax systems. It relied on both higher sales and excise tax rates, and a substantial broadening of the sales tax base to achieve these aims.

Although the exporting of tax burden to nonresidents is viewed favorably by many, and the reduced tax burden on residents likely has a positive economic impact, there are offsetting implications that need to be weighed against these benefits. Specifically, to what extent do higher taxes on nonresidents discourage them from spending in Maine and how does this negative economic impact compare with the positive impact of lower taxes on residents? Many in the tourism industry, for example, point to the potential of tourism-related taxes (such as an increase in the lodging tax, or a new sales tax on ski-lift tickets) to discourage out-of-state visitors from spending time in Maine. Many in the real estate industry make a similar claim with respect to proposed increases in the real estate transfer tax. They suggest that increasing that tax may discourage purchases of second homes in Maine, or reduce the market value of existing real estate investments.

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MAINE TAX REFORM

THE EVOLVING LANDSCAPE FOR TAX REFORM

REFERENCES

F

Allen, Michael, and Richard Woodbury. 2006. “Containing the Individual Burden of Property Taxes: A Case Study of Circuit Breaker Expansion in Maine.” National Tax Journal 59(3): 665-683.

ew would argue that the failure of comprehensive tax reform over the last decade is an indication that Maine’s tax system is in fact perfectly structured as it is now. Differences in policy objectives, however, have so far impeded comprehensive solutions. Still, the piecemeal changes made over the past several years are not insignificant.

The income tax reduction taking effect in 2013 was lauded by advocates as the biggest tax cut in Maine history. That it removed an estimated 77,000 households from owing any income tax was a significant change, as was the lowering of the top rate from 8.5 percent to 7.95 percent. At the same time, the budget pressures that resulted in part from the tax cut were one reason for the temporary increases in the sales tax rate that also took effect in late 2013. Though these changes are real, there is little sense that they have “solved” Maine’s tax and budget problems for the long term.

The most significant property tax reform since 2005 was the redesign of the circuit breaker program for 2014. Integrated into the income tax filing, it is expected that many more eligible recipients will now file for property tax refunds under the redesigned program. However, the maximum refund has been reduced from $2,000 following LD 1 to $1,600 in recent years to just $300 ($400 for those over age 70) now. The program also uses a substantially narrowed income measure to determine eligibility, but a significantly higher tax burden threshold to qualify. While simpler to administer, this will increase eligibility to some taxpayers and decrease eligibility for others in ways that may correspond less precisely to need.

Whatever its objectives, it is likely that tax reform will remain a visible and controversial subject of policy discussions. The aim of this paper is to update the taxrelated data that I presented in earlier work, accounting for the changes in tax policy of the last few years, and to discuss how alternative approaches to reform might be evaluated and structured to achieve different goals, such as progressivity, growth, revenue stability, and exportability. -

Federation of Tax Administrators (FTA) 2013a. State Individual Income Taxes. FTA, Washington, DC. www.taxadmin.org/fta/rate/ind_inc.pdf [Accessed November 1, 2013] Federation of Tax Administrators (FTA). 2013b. State Sales Tax Rates and Food and Drug Exemptions. FTA, Washington, DC. www.taxadmin.org/fta/rate/sales.pdf [Accessed November 1, 2013] Federation of Tax Administrators (FTA). 2008. “FTA Survey of Services Taxation: Update.” By the Numbers Newsletter (July).

Johnson, Joel. 2013. “The Distributional Effects of Recent Changes to Maine’s Tax System.” Maine Policy Review 22(2): 26-33.

Maine Office of Tourism, 2013. Visitor Tracking Research: 2012 Calendar Year Annual Report. DPA, Kennebunk, ME. www.visitmaine.com/resource/visitmaine/vault/ application/2012-annual-report.pdf [Accessed November 1, 2013] Shaw, Emily. 2013. “The Impact of Post-Recession State Revenue Reductions on Maine’s Municipalities.” Maine Policy Review 22(2): 34-41.

Speaker’s Advisory Committee on Tax Reform. 2003.

Final Report of the Speaker’s Advisory Committee on Tax Reform to the First Regular Session of the 121st Legislature. Maine State Legislature, Augusta.

Woodbury, Richard, 2009. The Struggle for Tax Reform in Maine, 2003-2009. Discussion Paper 09-2. Federal Reserve Bank of Boston, Boston.

Richard Woodbury is an economist and Maine state senator.

He has served five terms in the legislature, one of them as chair of the tax committee, and has been involved in numerous bipartisan groups interested in reforming Maine’s tax system. Outside the legislature, he works with a national research and education program on population aging.

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DISTRIBUTIONAL EFFECTS OF TAX SYSTEM CHANGES

The Distributional Effects of Recent Changes to Maine’s Tax System

By Joel Johnson Joel Johnson argues that both classical economic theory and recent empirical research support the notion that taxes should be progressive—with the wealthiest citizens paying a larger share of their income in taxes than the middle class, and the middle class paying a larger share than the poor. He notes that like every other state in the U.S., Maine’s state and local tax system is not progressive, or even proportional with respect to income, but regressive. In this article, Johnson summarizes recent changes to Maine’s income, sales, and property taxes that he argues have made the state and local tax system more regressive.

R

ooted in the principles of classical economics is the notion that taxes should be progressive: that the wealthiest citizens should pay a larger share of their income in taxes than the middle class, and the middle class should pay a larger share of their income in taxes than the poorest. Empirical research supports this idea, showing that progressive tax systems are linked to greater economic mobility and economic opportunity for low-income residents. Yet, no state in the U.S. has a progressive system of state and local taxes. In the past few years, lawmakers in a dozen states, including Maine, have pushed for policies that would make their state and local tax systems less equitable to low- and middleincome residents. This article summarizes recent changes to income, sales, and property taxes that have made Maine’s state and local tax system more regressive over the past few years.

BACKGROUND

A

dam Smith is well known for explaining how individuals acting in their own self-interest and within the bounds of the law put resources to their most productive uses and promote the interests of society as a whole. He is less well known for his thoughts on how rich and poor should pay taxes to support the state. In Book Five of The Wealth of Nations, Smith (1904, V.2.25) established the minimum standard for fair taxes, arguing that citizens should pay taxes “in proportion to the revenue which they respectively enjoy under

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the protection of the state.” He went further with his prescription for fair taxation, invoking the problem of inequality between rich and poor and arguing that “it is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion” (Smith 1905, V.2.71). Adam Smith was making an early argument for progressive income taxes.

Smith’s basic thoughts on fairness in taxation built the foundation for deeper insights by modern classical economists such as Alfred Marshall, who demonstrated that progressive taxation is preferable to proportional taxation because of the difference in the value of a marginal dollar to low- and high-income individuals. In Principles of Economics, Marshall (1920: 19) wrote: A rich man in doubt whether to spend a shilling on a single cigar, is weighing against one another smaller pleasures than a poor man, who is doubting whether to spend a shilling on a supply of tobacco that will last him for a month. The clerk with £100 a-year will walk to business in a much heavier rain than the clerk with £300 a-year; for the cost of a ride by tram or omnibus measures a greater benefit to the poorer man than to the richer. If the poorer man spends the money, he will suffer more from the want of it afterwards than the richer would. The benefit that is measured in the poorer man’s mind by the cost is greater than that measured by it in the richer man’s mind.

Marshall made the case for progressive taxation on purely theoretical grounds: an extra dollar in the pocket

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DISTRIBUTIONAL EFFECTS OF TAX SYSTEM CHANGES

is worth less to a rich individual than it is to a poor individual. By definition, progressive taxes reduce aftertax income inequality. Recent empirical work also shows that progressive taxes are linked to greater economic opportunity for children born into poor families (Chetty et al. 2013).

STATE AND LOCAL TAX SYSTEMS IN MAINE AND THE U.S.

A

relies heavily on sales tax revenue to make up the difference, raising more than 60 percent of its total tax revenue from a 6 percent tax on retail sales that applies to a wide variety of goods and services. As a result, the poorest 20 percent of Washington residents pay 16.9 percent of their income in state and local taxes, while the richest 1 percent of Washington residents pay 2.8 percent of their income in state and local taxes (Davis et al. 2013). California, in contrast, has one of the most progressive personal income tax systems in the nation, which generates over 32 percent of California state and local tax revenue (U.S. Census Bureau 2013) and thus reduces the state’s reliance on sales and excise taxes. As a result, California is the only state in the nation where middle-income residents pay a lower effective tax rate than high-income residents.

Maine’s state and local tax system is also regressive, albeit slightly less so than most other states, owing to the state’s greater reliance on income taxes and lesser reliance on sales taxes. Although Maine relies relatively heavily on property taxes to fund schools, transportation, public safety, and other basic services, it has historically used a modest package of credits and exemptions that lessen the burden on low-income residents. Comprehensive state and local tax incidence data for 2013 will not be available until late 2015, but major changes to Maine’s state and local tax system that took effect this year have likely made it more regressive. For example, targeted property tax relief for low-income Maine residents was eliminated in 2013 and significantly reduced in subsequent years.

s stated earlier, no state in the U.S. has a progressive state or local tax system. In fact, no state even has a system that meets Adam Smith’s basic standard of fairness—that residents should pay taxes proportional with their income. In every state, the poorest residents pay a larger share of their income in state and local taxes than the richest do. Across the U.S. as a whole, the poorest 20 percent of non-elderly residents pay twice as much of their income in state and local taxes than the richest 1 percent (Figure 1) (Davis et al. 2013).

State and local tax systems across the U.S. are regressive because of their heavy reliance on sales taxes (including excise taxes) and property taxes and relatively light reliance on income taxes. Across all U.S. states and municipalities as a whole, sales and property taxes account for two-thirds of state and local tax revenue, while personal and corporate income taxes account for one-quarter (Barnett and Vidal 2013). The remainder of state and local tax revenue comes from a variety of other taxes, including significant natural resource extraction taxes in states such as Alaska and Texas.

Figure 1: Total State and Local Taxes Imposed on By definition, only income taxes can be

Non-elderly Residents, as Shares of 2010 Income collected “in proportion to the revenue which they respectively enjoy under the protection of the state” 12% as Smith prescribed. Taxes on income apply to 10% every dollar earned by residents, whereas sales and property taxes only apply to dollars spent on 8% certain categories of goods and services that resi6% dents buy, including housing.1 Since lower-income residents spend a greater share of their income on 4% taxable consumption (U.S. Bureau of Labor 2% Statistics 2013), sales and property taxes disproportionately fall on them.

0% Lowest Second Middle Fourth Next Next Top There is considerable variation in taxation 20% 20% 20% 20% 15% 4% 1% systems across states. Washington, for example, is Income Group one of seven states that levy no personal income tax (two additional states levy personal income Source: Institute on Taxation and Economic Policy, 2013 taxes only on dividends and interest income). It

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DISTRIBUTIONAL EFFECTS OF TAX SYSTEM CHANGES Figure 2: Maine State and Local Taxes Per Dollar of Income by Income Group, 2009 $0.20

$0.15

Bottom 20%

Second 20%

Middle 20%

Fourth 20%

Top 20%

Top 1%

$0.10

$0.05

$0 Total State and Local Taxes

Income Taxes

Property Taxes

Sales and Excise Taxes

Source: Maine Revenue Services, 2011

This section provides an overview of Maine’s tax system prior to those changes.

In 2009, the latest year for which comprehensive tax incidence data is available from Maine Revenue Services, the poorest 20 percent of Maine residents paid 17 cents in state and local taxes for every dollar they earn, while the richest 1 percent paid a little more than eight cents (Allen 2011).2 As shown in Figure 2, Maine’s income tax is progressive: it costs high-income Mainers about four cents of every dollar they earn, while it costs low-income Mainers less than two cents per dollar earned. Property and sales taxes, in contrast, take a larger share of the income of low- and middle-income residents. Since the income tax only accounted for 28 percent of Maine’s total state and local tax revenue in 2009 (Allen 2011), Maine’s overall state and local tax system was regressive.

Instead of strengthening personal and corporate income taxes and reducing reliance on sales and property taxes, lawmakers in more than a dozen states in the past few years have pushed for income tax cuts and/or sales tax increases. In 2012 and 2013, income tax cuts were enacted in Oklahoma, Indiana, Wisconsin, North Dakota, North Carolina, Arkansas, Ohio, and Kansas.

In most of these states, lawmakers have increased sales taxes, cut spending, drawn down reserve funds, or passed costs on to local municipalities to pay for the income tax cuts.

In Missouri, Nebraska, and Louisiana, plans to eliminate or sharply cut state income taxes and replace the lost revenue with sales tax increases gained serious

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traction with governors or legislatures before failing to become law. A bipartisan group of legislators in Maine dubbed the “Gang of Eleven” signed onto a tax reform plan that would cut income tax rates, eliminate most income tax exemptions and deductions, raise sales tax rates and expand sales taxes to a broad array of goods and services. (See Woodbury, this issue.)

Although none of these comprehensive “tax swap” proposals have become law, neither are they disappearing. Lawmakers in Georgia will push to cut income taxes or eliminate them entirely in 2014, according to an article by Jay Bookman in the June 22, 2013, Atlanta Journal-Constitution. In Louisiana, according to an article by Jeff Adelson in the April 8, 2013, Times-Picayune, although Governor Jindal temporarily abandoned his plan to eliminate his state’s personal income tax in 2013, he remains supportive of the idea and has called on legislators to come up with their own plan to eliminate the income tax. The push to cut or eliminate state income taxes has found support in Maine, too. In addition to the proposal from the Gang of Eleven, an article by Matthew Stone in the Bangor Daily News on May 20, 2013, describes Governor Paul LePage’s own tax reform agenda: to eliminate the state’s income tax entirely.

The plans of Gov. LePage and the Gang of Eleven have not become reality, but that hasn’t stopped Maine lawmakers from enacting major changes to Maine’s tax system over the past three years that have effectively moved it toward a greater reliance on sales and property taxes and less reliance on income taxes.

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DISTRIBUTIONAL EFFECTS OF TAX SYSTEM CHANGES

eginning in 2011, Maine policymakers enacted a variety of significant changes to the state’s tax system. In 2011 and 2012, they enacted $408 million in income and estate tax cuts at a time when temporary federal support from the American Recovery and Reinvestment Act (ARRA) was mostly expired and inflation-adjusted state general fund revenue was still significantly below prerecession levels. The majority of the benefits of these tax cuts accrued to relatively highincome Maine residents.

In 2013, Maine lawmakers passed budget legislation that included temporary sales tax increases, cuts to targeted property tax-relief programs, large reductions in state revenue sharing with municipalities, and other taxrelated provisions to make up for the $408 million reduction in state revenue. The revenue sharing cuts leave municipalities with the choice of cutting spending or raising property taxes to make up the difference.

with incomes of more than $120,622 per year. In contrast, 17 percent of the benefits will accrue to the lowest-income 60 percent of Maine families—those with incomes of less than $52,520 per year (Table 2).

In addition to the income tax cuts (including the 2012 pension tax cut), the 125th Legislature reduced Maine’s estate tax by increasing the “exclusion amount”— the portion of the value of an estate exempt from the tax—from $1 million to $2 million, and changing the graduated rate and bracket structure. According to Michael J. Allen of Maine Revenue Services (personal communication) approximately 600 estates are affected by these changes. The estate tax changes reduce state general fund revenue by approximately $51 million over the two-year period that began in July 2013. Taken together, the income and estate tax changes enacted by the 125th Legislature in 2011 and 2012 are expected to reduce state general fund revenue in the two-year period that began in July 2013 by approximately $408 million (Maine State Legislature, Office of Fiscal and Program Review 2013).

Income and Estate Tax Cuts Enacted in 2011 and 2012

Tax Increases and Cost Shifts to Property Taxpayers Enacted in 2013

RECENT CHANGES TO MAINE’S STATE AND LOCAL TAX SYSTEM

B

In 2011 and 2012, the 125th Legislature and Gov. LePage made significant changes to taxes on income, including retirement income. In 2011, lawmakers overhauled the state’s personal income tax rate and bracket structure (Table 1). In 2012, lawmakers increased from $6,000 to $10,000 the amount of retirement income that can be subtracted from taxable income, and expanded the definition of retirement income in this context to include income from annuities and individual retirement accounts (IRAs).

The state’s income tax system became slightly more progressive as a result of these income tax changes, with the share of income tax revenue generated from the top 10 percent of Maine income taxpayers increasing from approximately 55 percent to 57 percent of the total, and the share of income tax revenue generated from the bottom 90 percent of Maine taxpayers decreasing slightly (Table 2). However, most of the direct benefits of these income tax cuts accrued to relatively high-income Maine families. In 2014, 60 percent of the benefits of these tax cuts will accrue to the highest-income 20 percent of Maine families—those with incomes of more than $86,789 per year. Forty percent will accrue to the highest-income 10 percent of Maine families—those

In June 2013, state lawmakers passed a budget for the two-year period beginning July 1, 2013. This was challenging considering the state’s budget situation. As a result of Maine’s slow economic recovery from the recession of 2007–2009 and the 2011–2012 income and estate tax cuts, inflation-adjusted general fund revenue was forecast to be lower than in any two-year budget period since end of fiscal year 1997.3 According to an October 2, 2012, article by Matthew Stone in Table 1:

Maine Income Tax Brackets and Rates Before and After 2011 Income Tax Cuts Take Effect 2012 (Before)

Tax Bracket

2013 (After) Rate

$0 – $5,100

Tax Bracket

2%

$5,100 – $10,500

4.5%

$10,500 – $20,350

7%

$20,350 or more

8.5%

$0 – $5,200

Rate 0%

$5,200 – $20,900

6.5%

$20,900 or more

7.95%

Source: Maine Revenue Services

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Volume 22, Number 2

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DISTRIBUTIONAL EFFECTS OF TAX SYSTEM CHANGES Table 2:

The Estimated Distributional Effects of Maine’s 2011 and 2012 Income Tax Cuts in 2014 Before Tax Cuts

After Tax Cuts

Bottom 20%

$2.2

0.2

$0.4

0.0

($1.9)

-83.6

($14)

1.1

$18,139 – $25,053

20-30%

$9.4

0.6

$7

0.5

($2.6)

-27.1

($38)

1.4

$25,053 – $32,884

30-40%

$24.4

1.7

$19

1.5

($5.2)

-21.4

($77)

2.9

$32,884 – $41,390

40-50%

$42.6

2.9

$34

2.7

($8.4)

-19.7

($124)

4.7

$41,390 – $52,520

50-60%

$67.9

4.6

$56

4.3

($12.2)

-17.9

($180)

6.8

$52,520 – $66,981

60-70%

$100.9

6.9

$84

6.5

($16.9)

-16.7

($249)

9.5

$66,981 – $86,789

70-80%

$154.9

10.5

$131

10.1

($24.2)

-15.6

($357)

13.6

$86,789 – $120,622

80-90%

$260.9

17.8

$226

17.5

($34.7)

-13.3

($513)

19.5

Top 10%

$806.5

54.9

$734

56.9

($72.1)

-8.9

($1,065)

40.5

$1,469.7

100.0

$1,292

100.0

($178.1)

-12.1

($263)

100.0

Expanded Income

0 – $18,139

$120,622 or more

Income Group

TOTAL

Change Percent Average in Tax Tax Tax Individual Individual Liability Percentage Percentage Change Change Tax Liability Tax Liability ($ Millions) Distribution Distribution ($ Millions) ($ Millions)

Share of income tax reduction (Percent)

$120,622 – $159,497

90-95%

$207.2

14.1

$184

14.2

($23.7)

-11.5

($701)

13.3

$159,497 – $325,974

95-99%

$289.0

19.7

$261

20.2

($27.9)

-9.7

($1,031)

15.7

$325,974 – or more

Top 1%

$310.3

21.1

$290

22.4

($20.5)

-6.6

($3,021)

11.5

Source: Maine Revenue Services Office of Tax Policy

Structural Budget Gap

the Bangor Daily News, the state’s finance department estimated in September of 2012 that the state faced a $756 million structural budget gap (see sidebar). After two subsequent downward revisions to the state’s general fund revenue forecast in December 2012 and May 2013, the structural budget gap increased to $939 million, with $408 million due to the recent income and estate tax cuts.

Accounting for all of the budget provisions lawmakers enacted to close the gap is beyond the scope of this analysis. Keeping with routine established over the past eight years, the legislature was able to significantly reduce the budget gap on the expenditure side of the general fund balance sheet by maintaining or slightly increasing current funding levels instead of meeting funding levels required by statute. However, lawmakers closed nearly half of the two-year structural budget gap ($448 million) using a variety of tax changes and cost shifts to municipalities and property taxpayers (Table 3).

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The structural budget gap is the estimated difference between projected general fund expenditures and projected general fund revenues. The projected expenditures are based on current law, not current policy. For example, current law says that the state must pay for 55 percent of the cost of K–12 education, but state lawmakers have consistently enacted two-year budget legislation that nullifies this obligation and allows the state to fund K–12 education at lower levels.

Sales Tax Increases The most prominent of the tax changes shown in Table 3 are the temporary sales tax increases, which took effect on October 1, 2013, and are scheduled to expire on June 30, 2015. The general sales tax rate increased from 5 percent to 5.5 percent, and the tax on meals and lodging increased from 7 percent to 8 percent. The

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DISTRIBUTIONAL EFFECTS OF TAX SYSTEM CHANGES Table 3:

general sales tax was also expanded to include newspapers, magazines, and other “short interval” publications, such as Uncle Henry’s. Together, these temporary sales tax increases raise approximately $190 million over the FY 2014–2015 biennium. Since sales taxes disproportionately fall on low- and middle-income residents, these tax increases will fall disproportionately on those taxpayers. For a typical family, these tax increases will offset a significant portion of the benefits they received from the income and estate tax cuts enacted in 2011.

For example, a typical family with annual income of $40,000 to $50,000 will pay approximately $50 more per year in taxes on household goods and restaurant meals.4 Compare that with an average income tax cut of $180 for families in roughly the same income bracket.

Income Tax Changes The FY 2014–2015 biennial budget also contains significant income tax changes, including a package of changes that updates Maine’s tax code to reflect recent changes in the federal code, a cap on itemized deductions, and changes to the way income tax bracket thresholds are adjusted for inflation (Table 3).

With the passage of the American Taxpayer Relief Act early in January 2013, the federal tax code changed significantly. Since Maine’s income tax system is based largely on the federal system—Maine’s income tax calculation starts with federal adjusted gross income—Maine lawmakers must decide to what extent they want to conform Maine’s tax code to changes in the federal code.

In 2013, Maine mostly conformed to the changes in the federal code that occurred in January, resulting in a $63 million tax cut for Maine income taxpayers over the twoyear period. To pay for this tax cut, lawmakers raised a projected $65 million by imposing a cap of $27,500 on the value of itemized deductions that Maine taxpayers can claim on their income tax returns. Only the very highest earners who claim more than $27,500 in itemized deductions will be affected by the cap. The net effect of these two changes is a general fund revenue increase of less than $2 million dollars and a slightly more progressive income tax system. The share of state personal income taxes paid by the top 10 percent of taxpayers increases from 57 percent to just over 58 percent, while the share for the remainder of Maine taxpayers—those with incomes below $119,000— declines. In 2014, the average tax cut for the median Maine tax family—those with approximately $41,000 in annual income—is estimated to be between $8 and $23,

Summary of Major Tax Changes and Cost Shifts to Municipalities in FY 2014–15 General Fund Biennial Budget Total Fiscal Impact on State General Fund in FY 2014 and 2015 ($)

Policy Change

Temporary increase in sales tax from 5% to 5.5%

135,207,846

Temporary increase in meals and lodging tax from 7% to 8%

48,046,400

Elimination of sales tax exemption for newspapers and magazines

6,764,800

Conformity with federal tax code

-63,150,880

$27,500 cap on itemized deductions

65,051,000

Two-year suspension of the inflation adjustment for income tax brackets and switch to chained CPI upon resumption in 2016

9,120,000

Elimination of Maine Residents Property Tax and Rent Relief Program and enactment of Property Tax Fairness Credit

47,226,779

Business Equipment Tax Reimbursement (BETR) Cut

12,015,000

Cuts in routine state aid to municipalities (Municipal Revenue Sharing)

59,255,637

Teacher retirement cost shift to municipalities

29,404,285

Total

448,940,867

Sources: Maine Legislature, Office of Fiscal and Program Review; and Maine Treasurer’s Office

while the average tax increase for the top 1 percent— those with incomes over $324,000—is estimated to be $1,483 (Maine Revenue Services 2013).

In addition to the federal conformity provisions and the deductions cap, lawmakers included in the budget subtle changes to the way thresholds in income tax brackets are adjusted for inflation. Under the old law, Maine’s income-tax-bracket thresholds automatically rose with inflation as measured by the Consumer Price Index. Under the new law, there will no adjustment for inflation in tax years 2014 and 2015, and when the automatic adjustment for inflation resumes in 2016, it will be based on the Chained Consumer Price Index instead of the standard Consumer Price Index. These changes result in a small regressive tax increase as more income falls into higher tax brackets. The share of total state personal income taxes raised from the highest-income 10 percent

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DISTRIBUTIONAL EFFECTS OF TAX SYSTEM CHANGES

of Mainers will fall slightly and the share of income taxes raised from middle- and upper-middle-income Mainers will increase slightly—a statewide average twoyear tax increase of approximately $24 (Allen, personal communication). According to the author’s calculations based on the Maine Consensus Economic Forecasting Commission’s inflation forecast, the two-year suspension of inflation indexing will result in a two-year tax increase of approximately $34 for a Maine family with taxable income of more than $20,900.

Cuts to Property Tax Relief and Cost Shifts to Municipalities The legislature found an additional $248 million to balance the budget by eliminating property tax relief for businesses and low- and middle-income households, shifting costs for teacher pensions onto municipalities, and cutting state-municipal revenue sharing.

A long-standing property tax relief program targeted at low- and middle-income Maine residents called the Maine Residents Property Tax and Rent Relief Program, also known as the “Circuit Breaker,” was eliminated and replaced with the Property Tax Fairness Credit, which low- and middle-income residents with extremely high property tax and rent bills can claim on their income tax returns. Since the Property Tax Fairness Credit has much stricter eligibility criteria and a significantly less generous formula for calculating benefits, many low- and middleincome Maine families will see large reductions in property tax relief as a result of this change. The maximum refund under the old Circuit Breaker program was $2,000, compared to $300 ($400 for seniors) under the new Property Tax Fairness Credit. Under the Circuit Breaker, Maine residents with incomes below $64,950 ($86,600 for multi-person households) whose property tax bill (or 20 percent of their rent) exceeded 4 percent of their income were eligible for a refund up to $2,000 by filing a stand-alone application. Under the Property Tax Fairness Credit, Maine residents with incomes below $40,000 (regardless of household size) whose property tax bill (or 25 percent of their rent) exceeds 10 percent of their income are eligible for a refund up to $300 ($400 for seniors) by filing an income tax return.

The average refund under the new program will be much smaller than the $492 average Circuit Breaker refund, but the new program will likely affect more people since the application system is now integrated with the income tax-filing system. Circuit Breaker participation statistics from Maine Revenue Services’ Office of Tax 32

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Policy show that approximately 90,000 low- and middleincome Maine households received Circuit Breaker refunds for property taxes paid in 2010, the most recent year for which data are available. Those 90,000 households will collectively lose at least $47 million in property tax relief over the two-year budget period that began in July 2013 (Table 3).

Lawmakers also made across-the-board cuts to property tax refunds issued through the Business Equipment Property Tax Relief Program (BETR), which reimburses businesses for taxes paid on eligible business equipment. BETR is a progressive property tax relief program since it disproportionately benefits low- and middle-income taxpayers (Allen 2011). The Legislature cut BETR by 10 percent in FY 2014 and 20 percent in FY 2015, saving a total of $12 million over the current biennium (Table 3). Furthermore, lawmakers shifted approximately $189 million in costs onto local property taxpayers by eliminating $159 million in state-municipal revenue sharing and by forcing local municipalities to pay half the cost (approximately $14.5 million per year) of retirement for public K–12 school teachers (Table 3). Municipalities have the choice of absorbing these new costs by cutting funding for municipal operations and services or by raising property taxes. (See Shaw this issue, for further discussion of municipal responses to state revenue reductions.)

CONCLUSION

O

ver the past three years, Maine lawmakers have made Maine’s state and local tax system more reliant on sales and property taxes and less reliant on income taxes. The income tax cuts passed in 2011 and 2012 were slightly progressive when viewed in isolation, but the estate tax cut passed in 2011 was not. More importantly, lawmakers then filled the $408 million hole that the income and estate tax cuts created in the state’s general fund balance sheet by eliminating property tax relief for low- and moderate-income households, raising sales taxes, and shifting costs to municipalities, which will inevitably result in higher property taxes in many towns and cities across the state. These changes have likely made Maine’s tax system more regressive than it was in 2009, the latest year for which a comprehensive distributional analysis from Maine Revenue Services is available.

How taxes affect different income groups—what economists call “vertical equity”—is just one of several

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DISTRIBUTIONAL EFFECTS OF TAX SYSTEM CHANGES

criteria with which to evaluate a state and local tax system. Tax systems can also be judged on how simple they are to administer and comply with, to what degree they affect the decisions of businesses and households, by how much revenue they raise to provide public services to businesses and households, and by the extent to which that revenue stream grows and shrinks over the course of the business cycle. Evaluation of Maine’s recent tax changes on all of these criteria is beyond the scope of this article, but state policymakers should strive for a state and local tax system that is progressive—or at least proportional with respect to income. By shifting some of the costs of providing public services to the high end of the income distribution, Maine can create a state and local tax system that fills the prescriptions of Adam Smith and Alfred Marshall while simultaneously promoting greater economic opportunity for lowincome and middle-income residents. ENDNOTES 1. Renters pay property taxes indirectly through their landlords.

2. Because of differences in methodology and source data, Maine Revenue Services tax incidence analysis should not be compared to the Institute on Taxation and Economic Policy’s (Davis et al. 2013) tax incidence analysis of other states and the nation.

3. Based on author’s analysis using historical revenue data from the Maine Legislature, Office of Fiscal and Program Review, the December 2012 report of the Maine State Revenue Forecasting Committee, and the Consumer Price Index (CPI-U, all items) from the U.S. Bureau of Labor Statistics.

4. Based on author’s analysis using 2012 Consumer Expenditure Survey data from the U.S. Bureau of Labor Statistics.

Chetty, Raj, Nathaniel Hendren, Patrick Kline and Emmanuel Saez. 2013. The Economic Impacts of Tax Expenditures: Evidence from Spatial Variation Across the U.S. obs. rc.fas.harvard.edu/chetty/tax_expenditure_soi_whitepaper.pdf [Accessed October 24, 2013] Davis, Carl, Kelly Davis, Matthew Gardner, Harley Heimovitz, Robert S. MacIntyre, Richard Phillips, Alla Sapozhnikova and Meg Wiehe. 2013. Who Pays? A Distributional Analysis of the Tax Systems in All 50 States. Institute on Taxation and Economic Policy, Washington, DC. Maine Revenue Services. 2013. Conformity Issues with a Significant Impact on Maine Income Taxes. MRS, Office of Tax Policy, Augusta. www.maine.gov/revenue/research/ Conformity%20American%20Taxpayer%20Relief% 20Act%20table.pdf [Accessed October 24, 2013] Maine State Legislature, Office of Fiscal and Program Review. 2013. Tax and Fee Changes Affecting State and Local Tax Burden: 125th Legislature, 1st Regular Session and 2nd Regular Session. Augusta. maine.gov/legis/ofpr/ tax_information [Accessed October 24, 2013].

Marshall, Alfred. 1920. Principles of Economics: An Introductory Text, 8th edition. Macmillan, London.

Shaw, Emily. 2013. “The Impact of Post-Recession State Revenue Reductions on Maine’s Municipalities.” Maine Policy Review 22(2): 34–41.

Smith, Adam. 1904. An Inquiry into the Nature and Causes of the Wealth of Nations, 5th edition. Methuen, London.

U.S. Bureau of Labor Statistics. 2013. Table 2301. Higher Income before Taxes: Annual Expenditure Means, Shares, Standard Errors, and Coefficient of Variation, Consumer Expenditure Survey, 2012. www.bls.gov/ cex/2012/combined/higherincome.pdf [Accessed October 24, 2013] U.S. Census Bureau. 2013. State and Local Government Finances. www.census.gov/govs/local/ [Accessed October 24, 2013] Woodbury, Richard. 2013. “Issues in Tax Reform in Maine.”

Maine Policy Review 22(2): 11–25.

REFERENCES Allen, Michael. 2011. Maine Tax Incidence Study: A Distributional Analysis of Maine’s State and Local Tax System. Presentation to Joint Standing Committee on Taxation, Augusta, ME. maine.gov/legis/ofpr/taxation_ committee/interim_schedule/MRS_Tax_Incidence_Study. pdf [Accessed October 24, 2013] Barnett, Jeffrey L. and Phillip M. Vidal. 2013. State and Local Government Finances Summary: 2011. U.S. Department of Commerce, Economics and Statistics Administration, Washington, DC. www2.census.gov/govs/local/ summary_report.pdf [Accessed October 24, 2013]

Joel Johnson is an economist at the Maine Center for Economic Policy. He serves on the Maine Consensus Economic Forecasting Commission and previously served as an economist at the Maine State Planning Office. He holds an M.S. in Resource Economics and Policy from the University of Maine.

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Volume 22, Number 2

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MUNICIPAL IMPACTS OF STATE REVENUE REDUCTIONS

The Impact of Post-Recession State Revenue Reductions on Maine’s Municipalities

by Emily Shaw Maine municipalities have received substantially less revenue from the state over the past several years, due to a combination of financial pressures on state budgets and state administrative policy preferences. The result, says Emily Shaw, is that municipalities have been forced to restructure the provision and funding of local services through a combination of reducing spending in some categories, raising additional money from residents and other users of town services, or taking on additional municipal debt. However, on average, Maine’s municipalities have so far been unable to reduce their total spending. Shaw’s discussion of municipal responses to reduced state revenue is based on analyzing responses to the 2007–2011 Maine Municipal Association fiscal surveys of municipal revenues and expenditures.

M

aine’s recent state budgets have dramatically cut transfers to town programs. As a result, municipalities have received substantially less revenue from the state over the past several years. This change at the state level has been due to a combination of financial exigency and administrative policy preferences and has led to real change in municipal budgets and services.

While local service needs have not necessarily declined in the years following the 2007–2009 recession, municipalities have been forced to restructure the provision and funding of those services. In doing so they have chosen among a variety of possible responses: reducing spending on services, raising additional money from residents and other users of town services, or taking on additional municipal debt to continue providing services at the necessary level. By analyzing responses to the 2007–2011 Maine Municipal Association (MMA) fiscal surveys of municipal revenues and expenditures, we can see how municipalities have chosen to follow all three of these strategies as methods of responding to state revenue reductions.

REDUCED STATE ROLE IN MUNICIPAL REVENUE SOURCES

T 34

he state’s own data sources provide a useful starting point for an analysis of the relative roles of state and

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municipal sources in funding municipal budgets. Using Maine Revenue Services’ Municipal Valuation Return Survey and the state Office of Fiscal and Program Review data on Major State Funding Disbursed to Municipalities and Counties, we can observe a significant shift in state funding patterns (Figure 1).

State and municipal revenues both increased until 2008. Following that year, municipalities continued to collect more property tax each year while the state began contributing less. The national economic recession clearly served as an important inflection point in Maine municipal finance, and we know that part of the reason for reduced state disbursements in 2009 was lowerthan-projected state collections of income and sales tax.

However, state government policy shifts—including a reduction of top state income tax levels, reductions in state expenditures on education, and a decision to reduce municipal revenue sharing—have led to a perpetuation of the reduced levels of state relative to municipal funding.

We can get a better understanding of how these changes affect municipalities by exploring municipal budget data collected by the MMA. Municipalities responding to the MMA fiscal survey report on the amount of municipal, state, and federal money they have collected during the fiscal year. These revenues are intended to fund that year’s municipal expenditures,

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MUNICIPAL IMPACTS OF STATE REVENUE REDUCTIONS Figure 1: Property Tax and State Funding Since 2005

including town services, the town’s contribu$500,000,000 tion to its K–12 school district, and Municipal Property Tax Collection, relative to 2005 payments on short-term and long-term State Funding to Municipalities, relative to 2005 municipal debt. While the specific towns $375,000,000 responding to the MMA survey vary from year to year, the MMA is able to draw on their annual sample to estimate state-level aggregates of municipal revenues and expen$250,000,000 ditures each year.1 By examining the structure of these revenue sources over time, we can evaluate both how much total municipal $125,000,000 revenue has changed over the 2008–2012 period and how the balance of responsibility for this total pool of revenue has changed.

By examining year-over-year changes in esti$0 mated municipal-level spending across the 2006 2007 2008 2009 2010 2011 state, we can see that, collectively, municipalities have increased both the proportion Source: Maine Revenue Services 2013a; Office of Fiscal and Program Review 2013. and the absolute amount of their revenue that comes from local residents.

Maine’s largest program for providing revenue to Assessing the level of state compliance has been further municipalities is state funding for public education’s complicated by disagreements about what should be K–12 Essential Programs and Services (EPS), education included within the calculation of total K–12 EPS. funding that is provided to the state’s public school Nonetheless, according to a study commissioned by the districts through municipalities. Maine’s second-largest state legislature, the state contribution ranged between program for providing revenue to municipalities is 50 percent and 53 percent of state EPS during the municipal revenue sharing, a program that aims to “aid period between the implementation of the statutory 55 in financing all municipal services…[by providing] percent funding obligation in 2006 and the 2008–2009 funds from the broad-based taxes of State Government” school year. Beginning with the 2009 budget, however, since “the principal problem of financing municipal the state provided a lower percentage of EPS each year. services is the burden on the property tax” (Maine According to the state’s new preferred method of deterRevised Statutes Title 30-A, §5681). Cuts to both of mining EPS, which excludes teacher pension contribuMaine’s largest municipal funding programs have led to tions, the state provided only 45 percent of EPS in the state falling farther short of those programs’ pre2012–2013. However, using the state’s previous method recession statutory funding requirements. of determining EPS—the one comparable with the measure used by the state until the 2010–2011 school State Aid to Education year—the state provided only 42 percent of EPS in the The largest program area through which the state 2012–2013 school year (Picus et al. 2013). funds local services is state aid to education. A dramatic Using the data provided in the MMA fiscal surveys, decrease in state spending on education in 2010 has left it is also possible to see the decrease in the proportion of state education funding substantially below where it was total education spending funded by the state. Though in 2009 although state funding levels have not decreased the absolute amount of funding has gone up over again since that initial drop. As the state has consistently previous years in all years but one, in the one year in failed to meet statutory guidelines in this area since which education funding decreased (2010), the decrease before the recession, it is somewhat difficult to characwas substantial (Table 1). Moreover, statewide education terize the adequacy of funding levels. There is general expenditures continue to rise at a rate that is faster than agreement that the state has not met its statutory target, the growth in state education funding since the state but there is disagreement regarding the question of by reformulated its method of determining EPS. how much the state is missing this target (Rooks 2010).

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MUNICIPAL IMPACTS OF STATE REVENUE REDUCTIONS

Table 1:

Year

Municipal Expenditures

State Funding

Percentage Funded

by State

2007

$1,955,637,580

$856,226,346

44

2008

$1,937,713,234

$877,405,328

45

2009

$2,082,772,296

$887,484,050

43

2010

$2,026,104,106

$831,340,332

41

2011

$2,116,942,031

$859,706,760

41

Table 2:

Municipal Property Tax Collection vs.

Funding from Municipal Revenue Sharing: 2007–2011

Year

Municipal Property Tax Collection

Municipal Revenue Sharing Disbursements

Percentage of Property Tax Offset

by Revenue Sharing

2007

$1,876,244,644

$121,378,821

6

2008

$1,955,410,009

$133,124,059

7

2009

$2,004,979,063

$120,959,079

6

2010

$2,047,787,605

$97,473,014

5

2011

$2,100,857,920

$93,155,452

4

2012

$2,175,579,309

$96,875,178

4

Table 3:

36

Municipal Revenue Sharing The second-largest program area through which the state funds local services has been, until recently, municipal revenue sharing. This program represents a smaller share of state-funded municipal revenue than education transfers and has experienced far greater reductions than education funding. Before 2009, the state’s municipal revenue sharing program was almost always fully funded at 5 percent of the state’s revenue from general income taxes. This began to change in 2009, with municipal revenue sharing initially seeing some reductions.

Eventually, Governor Paul LePage’s policy effort to eliminate municipal revenue sharing altogether led to the distribution amount being reduced substantially from its 2008 level in 2010–2012. (Table 2), with even more dramatic reductions put into place for the 2014– 2015 budget (Long 2013; Maine Office of the State Treasurer 2013; Maine Revenue Services 2013a; Office of Fiscal and Program Review 2013).

Estimated Municipal Education Expenditures vs. Estimated State K–12 Education Funding: 2007–2011

Cumulative Impact of State Budget Cuts on Municipalities

Although education and municipal revenue sharing are the largest state municipal revenue programs, they are not the only ones. State programs providing funding to municipalities—including the state homestead exemption, road assistance, general assistance, and the tree growth program—were also the subject of budget cuts and contributed to the overall reduction of state funding to municipal governments. The cumulative impact of the 2008–2011 budget cuts meant that Maine municipalities received about $80 million less than they would have had 2007 levels of funding remained the same, for all programs except education (Table 3). Cuts to municipal revenue sharing represented more than $50 million of that reduction in cumulative spending since 2007.

Changes in State Funding Levels Since 2007: Differential Effects by Program

Year

Revenue Sharing

Homestead Exemption

2008

$6,024,886

-$1,603,220

2009

-$1,810,443

2010 2011

General Assistance

Tree Growth

Veterans’ Reimbursement

State Aid to Education

-$943,707

-$1,638,639

-$413,011

$148,355

$21,178,983

-$1,478,058

-$2,298,644

-$125,895

$531,927

$403,453

$31,257,704

-$25,533,355

-$2,363,945

-$3,819,080

$659,436

-$1,256,449

$93,397

-$24,886,014

-$29,984,580

-$8,656,652

-$2,510,038

-$2,484,408

-$521,797

$171,215

$21,120,525

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Road Assistance

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MUNICIPAL IMPACTS OF STATE REVENUE REDUCTIONS Figure 2: Estimated Municipal State and Federal Revenues, 2007–2011

Maine municipalities received a cumulative $48.7 million more in K–12 education funding between 2008 and 2011 than they would have under 2007 levels of funding, but again, this represents a smaller increase than the total municipal increase in education expenditures during this period.

$1,500,000,000 Total Estimated State Revenue

Total Estimated Federal Revenue

$1,125,000,000

Impact of Federal Revenue Changes

$750,000,000 The role played by federal revenue during the period under study did have some effect on the impact of state revenue reduction for municipalities (Figure 2). $375,000,000 Federal funding, unlike state funding, does not come in regular, standardized amounts; municipalities must apply for federal grants $0 for specific purposes. Nonetheless, while funding from the state has diminished since 2008, overall amounts of money granted through federal sources increased, initially quite dramatically, through the American Recovery and Reinvestment Act of 2009 and other programs. Although this aggregate increase in the amount of revenue provided by the federal government has unquestionably been helpful for municipalities, it has never substituted for a percentage of municipal budgets that would entirely offset the degree of state revenue decrease.

MUNICIPAL RESPONSE TO REDUCTION IN STATE REVENUE

W

2007

2008

2007

2010

2011

In 2010, at their lowest point during the studied period, state and federal revenue accounted for 29 percent of total estimated statewide municipal expenditures. While MMA estimates suggest that municipalities may have collected an exceptionally high amount of municipal revenue in 2009, these collections reduced quickly following the onset of the recession.2 Municipal revenue collection figures in 2010 and 2011 suggest that municipalities were functionally replacing state money with municipal sources: increases in locally generated revenues above 2008 levels closely match decreases in state and federal revenues (Table 4).

Despite a national trend in declining property tax collection following the 2009 recession, Maine’s municipalities collectively increased their residential property tax collection by an average of 5 percent each year. In addition, recent municipal budget trends demonstrate that municipalities now rely more heavily on user fees as a source of revenue than they did in the past.

ith less state revenue, municipalities were put in a position where they needed to decide whether to reduce expenditures, increase revenue from other sources, or do both. In many cases, they appear to have tried to do both. Municipalities faced strong challenges in achieving these changes in budget structure during a period where, on average, they faced substantial additional costs in education—the largest category of municipal expenditure— Table 4: Estimated Statewide Municipal Funding Structure: to continue to meet state and federal

Shifts in Revenue Collection Relative to 2008 education requirements.

Increasing Revenues from Other Sources

The combination of state and federal revenue accounted for an average of 35 percent of total estimated statewide municipal expenditures in 2008.

2009

2010

2011

Change in Municipal Revenue Collection Relative to 2008

$260,421,262

$150,367,977

$119,943,738

Change in State and Federal Revenue Relative to Municipal Expenditures Covered in 2008

-$46,668,723

-$144,941,250

-$122,747,954

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MUNICIPAL IMPACTS OF STATE REVENUE REDUCTIONS

Changing Expenditures

The achievement of rough parity between new municipal revenue and loss of old state revenue hid a number of shifts within municipal expenditures that Figure 3: Percentage Municipal-Level Reduction in

Employee Benefits since 2008, by Town Size 0–999 Population Group 1,000–1,999 Population Group 2,000–3,499 Population Group

3,500–4,999 Population Group 5,000–9,999 Population Group >10,000 Population Group

0%

-15%

-30%

-30.%

-60% 2008

2009

2010

2011

occurred during this time. Statewide, municipal spending on general administration decreased each year after 2007; the largest estimated decrease in this expenditure category, $15 million, occurred in 2010.

Cumulatively, reduced spending on general municipal administration has resulted in more than $203 million less in municipal expenditures than if municipalities had maintained 2007 levels of spending in this category. Looking at reductions in general administration in closer detail, we can see that 2010 was also the year of largest reductions in one major dimension of general administration expenditures: employee benefits (Figure 3).

Figure 4 shows municipal expenditures across various categories. This figure demonstrates that public works also demonstrated substantially reduced spending relative to 2007 in most years during this period, as did public safety and codes and human services. Meanwhile, most years during this period witnessed slightly increased statewide estimated spending on parks, recreation and library relative to 2007 (although this is chiefly due to increases in 2008 and 2009, with 2010 and 2011 demonstrating reduced spending relative to those two years). Spending on county assessments rose sharply in 2009 and increased in 2010 also. Increased statewide municipal expenditures on debt service increased most in 2010 and 2011. Finally, although statewide municipal

Figure 4: Changes in Categories of Municipal Expenditure Since 2007 $200,000,000

$150,000,000

2008

2009

2012

2011

$100,000,000

$50,000,000

$0

$-50,000,000

$-100,000,000

38

General Admin

MAINE POLICY REVIEW

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Summer/Fall 2013

Public Safety

Codes and Human Services

Parks, Rec and Library

County

Debt Service

K-12 Education

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MUNICIPAL IMPACTS OF STATE REVENUE REDUCTIONS Figure 5: State and Municipal Debt, 2006–2007 to 2010–2011

spending on K–12 education dipped in 2010 relative to 2009, the increased spending on K–12 education relative to 2007 drives the largest piece of the overall increase in municipal spending, despite the numerous cuts that have taken place during the same period.

Because there is such strong variation across municipal expenditure categories in terms of total dollar amounts, it is also valuable to look at percentages of expenditures reduced in particular categories to get a sense of how existing services might be affected by reductions. Although the absolute value of changes in general administration and education are the largest, on a percentage basis the expenditure categories of codes and human services and debt service have experienced the greatest degree of change since 2007, and in the case of debt service, since 2008 (Table 5).

$7,000,000 State Debt

$5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0

Taking on More Debt The increase in debt service reveals that one of the strategies used by municipalities facing a decline in state support appears to be an increased willingness to take on debt. The U.S. Census Bureau surveys of state and local government spending demonstrate that municipal borrowing is on the rise in Maine. In comparing the change in the amount of state debt with the change in the amount of municipal debt statewide, we see that though state debt reduced in 2010–2011, municipal debt continued to climb 6 percent over the previous year’s amount (Figure 5) (www.census.gov/govs/local/ index.html).

Education Expenditures and Funding Under these trying conditions, it is important to note that education spending is generally continuing to increase. That many towns have raised local revenue Table 5:

Municipal Debt

$6,000,000

2006–2007

2007–2008

2008–2009

2009–2010

2010–2011

rather than cut K–12 education expenditures reveals the relatively inelastic nature of education spending. Though investigating the increase in education spending in budgetary hard times is not within the scope of this paper, we could assume that the increase reflects both structural elements (substantial ongoing capital investments, salaries and benefits levels guaranteed under union contract) and widely shared municipal preferences (maintaining high-quality schools). Looking more closely at education spending, we can also see that there is substantial variation in education spending by town size (Figure 6). Though the belt-tightening of 2010 caused most towns to cut back, at least temporarily, Maine’s largest towns continued to increase spending on education, so that by 2011 they were on average spending more than 33 percent more than they were in 2007.

This difference in spending on education demonstrates another potential consequence of the reduction in state support for municipal services. As Figure 6 demonstrates, many smaller towns cut education spending in 2010, presumably in response to that year’s

Percentage Change in Categories of Municipal Expenditure Since 2007

% change between 2007 and 2011

Codes and Human Services

General Admin

Public Works

Public Safety

K–12 Education

Parks, Rec and Library

County

Debt Service (change from 2008)

-37

-16

-14

-3

8

9

15

17

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MUNICIPAL IMPACTS OF STATE REVENUE REDUCTIONS Figure 6: Changes in Categories of Municipal Expenditure

Since 2007

0–999 Population Group 1,000–1,999 Population Group 2,000–3,499 Population Group

3,500–4,999 Population Group 5,000–9,999 Population Group >10,000 Population Group

40%

30%

20%

10%

0

-10%

-20%

2008

2009

2010

2011

dramatic reduction in state funding for education. Since larger towns appear to be continuing to increase their education expenditures despite those cuts, there is a possibility of a larger than usual gulf between the educational services provided in smaller and larger towns across the state. Variation within the state in municipal education funding has continued to increase over the entire 2007–2011 period, increasing the distance between the level of education expenditures made in smaller as opposed to larger towns.

he variety of shifts in municipal revenue collection and expenditure reveal that municipalities are seriously affected by reductions in state revenue. The outcome is a mixture of heightened municipal revenue collection, decreased spending on general town services, increased spending on education—and where necessary, increased indebtedness. Because of the availability of data, this study considers primarily budgetary changes that occurred between 2007 or 2008 and 2011. We know that the trends exemplified in the post-recession period have largely continued—and in some situations, like the reduction in municipal revenue sharing and education spending relative to municipal K–12 assessments, have greatly accelerated. However, it is

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ENDNOTES 1. The MMA provides the methodology for their state-level estimates at the beginning of each fiscal survey report.

(Maine Municipal Association 2013).

CONCLUSION

T

impossible to discern the magnitude of the most recent changes without additional data. Nonetheless, the impact of the existing trends is highly likely to continue given the state’s continued failure to meet its previous statutory requirements for municipal funding.

On the expenditure side, municipalities spend substantially less than they had earlier on town administration, including code enforcement and human services.

Municipal-level fiscal surveys also reveal that spending on county services has increased in recent years, suggesting that municipalities in the aggregate may be seeking to provide services in less expensive ways through service consolidation. Unfortunately, since these elements of the town budget account for relatively little of the overall spending—especially in comparison to education—dramatic cuts in these areas may substantially alter the nature of the services available in towns.

Despite the cuts to many municipal services, education spending continues to rise in many towns to a degree that collectively outstrips the other cuts that municipalities may make.

Looking at spending patterns in the aggregate, we can see that municipal spending statewide is fairly inelastic. On average, Maine’s municipalities have so far been unable to reduce their total spending in response to substantial reductions in state funding. Instead, despite obvious efforts to cut where they can, municipalities are largely making up for the lack of state spending through increasing the tax and fee burden on their local populations. -

2. Although we lack data on this phenomenon, it is likely that towns were able to provide lowered assessments of property values over the course of 2009–2010 as a result of the impact of the recession on home values, allowing property owners to pay lower total taxes even if mil rates increased. As of 2010, state valuations reported to the state began to decline sharply (Maine Revenue Services 2013b).

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MUNICIPAL IMPACTS OF STATE REVENUE REDUCTIONS

REFERENCES Long, Robert. 2013. “LePage’s Proposed Budget Eliminates Tax Revenue Shared with Towns and Cities.”

Bangor Daily News (January 11). bangordailynews. com/2013/01/11/politics/proposed-state-budget-cutsrevenue-sharing-from-towns-for-next-two-years/ [Accessed November 11, 2013] Maine Municipal Association. 2013. Fiscal Survey. MMA, Augusta. www.memun.org/TrainingResources/ MMAPublications/FiscalSurvey.aspx [Accessed November 11, 2013] Maine Office of the State Treasurer. 2013. Previous Projections. Office of the State Treasurer, Augusta. maine.gov/treasurer/revenue_sharing/projections.html [Accessed November 11, 2013]

Emily Shaw teaches courses in public administration, economics, and state and local government as an assistant professor of political science at Thomas College in Waterville, Maine. She has a strong interest in Maine politics and her recent work aims to stimulate civic engagement and public political conversation through the presentation of relevant state-level statistics. She is a member of the Scholars Strategy Network, an organization that connects academic research with current public challenges.

Maine Revenue Services. 2013a. Municipal Valuation Return Statistical Summary. MRS, Augusta. www. maine.gov/revenue/propertytax/municipalservices/ statisticalsummary.htm [Accessed November 11, 2013] Maine Revenue Services. 2013b. State Valuation History 2002–2013. MRS, Augusta. www.maine.gov/revenue/ propertytax/sidebar/state_valuation_history.htm [Accessed November 11, 2013] Office of Fiscal and Program Review. 2013. Municipal Funding Report 2012. Maine State Legislature, OFPR, Augusta. www.maine.gov/legis/ofpr/municipal_funding_ report/2012report/index.htm [Accessed November 11, 2013] Picus, Lawrence O., Allan Odden, Michael Goetz, Michael Griffith, William Glenn, Diane Hirshberg and Anabel Aportela. 2013. An Independent Review of Maine’s Essential Programs and Services Funding Act: Part 1. Lawrence O. Picus & Associates, North Hollywood, CA. www.maine.gov/legis/opla/ EPSReviewPart1%28PicusandAssoc%20%294-1-2013. pdf [Accessed November 11, 2013] Rooks, Douglas. 2010. “The EPS Model and School Spending.” Maine Townsman 72(1): 5–10.

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Improving Educational Opportunity and Equity through School District Consolidation in Maine

by Christine Donis-Keller, Beth O’Hara-Miklavic, and Janet Fairman Christine Donis-Keller, Beth O’Hara-Miklavic, and Janet Fairman describe the impacts of Maine’s 2007 school district consolidation legislation on educational opportunities and equity within 24 regional school districts. Their findings, based primarily on interviews with district leaders, illustrate the different choices districts made when consolidating their educational programs, the outcomes of these efforts, and the strategies and structures districts used to implement change.

W

hen Maine passed school district consolidation legislation in 2007, the law was to accomplish two primary goals: (1) to improve educational opportunity and equity of Maine students and (2) to reduce costs through increased efficiency in the delivery of education programs and services (Maine Public Law 2007, Chapter 240, Part XXXX). The law required the reduction in the number of Maine school districts from 290 to approximately 80.

In the summer of 2009, 24 newly configured school districts became operational. In this paper, we examine the education-related impacts of reorganization within these districts. Specifically we examine how districts have pursued equity and opportunity for their students and the challenges and supports to that process.

BACKGROUND

D

iminishing resources and increased education demands, coupled with declining enrollment in rural systems and increasing education costs, have placed school district consolidation on the policy agenda for many states, including Maine (Howley, Johnson and Petrie 2011; Spradlin et al. 2010). Improvement in the quality or equity of education is a primary rationale for consolidation, but whether consolidation achieves this goal is unresolved (Bard, Gardener and Wieland 2006; Monk and Haller 1986). Studies of the educational impact of consolidation have been largely

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concerned with the relationship between district size and student performance on standardized tests (Rooney and Augenblick 2009), or adult earnings (Berry 2004).

According to Rooney and Augenblick (2009), while smaller districts may produce higher levels of achievement, larger districts may offer students greater opportunity in course offerings and extracurricular activities.

Studying small school districts pursuing consolidation in rural New York State, Monk and Haller (1986) identified a range of educational challenges including limited curricula; outdated equipment and facilities; low educational aspirations; turnover in leadership; and teacher shortages in particular subjects. Yet they concluded that consolidation is not a reliable solution to these problems.

However, Leach, Payne and Chan (2010) found that outcomes for children in disadvantaged communities improved 10 years after consolidation. Another study in Arkansas found that teachers in consolidated schools experienced improved working conditions and professional development opportunities, while students experienced broader course offerings and social opportunities (Nitta, Holley and Wrobel 2010).

Few studies have focused on educational impacts broadly, and the majority of research examining the outcomes of consolidation focuses primarily on high schools. Our study broadens the approach by examining the impact of district consolidation on educational opportunities and equity for multiple and diverse school districts in Maine.

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SCHOOL DISTRICT CONSOLIDATION, EDUCATIONAL OPPORTUNITY AND EQUITY Table 1:

Selected Demographic Data for 24 Cases No. Former 2010 SAUs2 Enrollment

Consolidated Units that Became Operational 2009–20101 RSU 2—Kennebec Intra-District Schools MSAD 16 (Hallowell)/Monmouth/ Richmond/Dresden3

4

2202

RSU 4—Oak Hill CSD/Litchfield/Sabattus/Wales

4

1530

RSU 5—Freeport/MSAD 62 (Pownal)/Durham3

3

1911

RSU 10—Western Foothills School District MSAD 21 (Dixfield )/MSAD 43 (Rumford) /MSAD 39 (Buckfield)/Hanover3

4

2854

RSU 12—Sheepscot Valley Regional School Unit Alna/Wiscasset/Westport Island/ Palermo/Somerville/ Whitefield/Windsor/Chelsea3

8

1876

RSU 13—MSAD 5 (Rockland )/MSAD 50 (Thomaston)3

2

2093

RSU 14—Windham/Raymond

2

3350

RSU 16—Poland/Minot/Mechanic Falls

3

1717

2

3227

2

2342

2

2580

2

2699

3

4046

RSU 24—Ellsworth/Hancock/Lamoine/Mariaville/Steuben/ Franklin/Peninsula CSD/ Schoodic CSD/ Flanders Bay CSD/MSAD 26 (Eastbrook)3

10

2611

RSU 25—Bucksport/Orland/MSAD 18 (Prospect)

3

1147

3

1490

RSU 34—Old Town/Alton/Bradley

3

1306

RSU 38—Maranacook CSD/Readfield/Manchester/Mt. Vernon/Wayne

5

1219

RSU 39—Caribou/Limestone/Stockholm

3

1577

AOS 91—Mount Desert Island Regional School System Southwest Harbor/ Mt Desert/ Bar Harbor/ Tremont/ Mt Desert CSD/Frenchboro/MSAD 76 (Swans Island)/Cranberry Isles/Trenton

9

1529

AOS 92—Kennebec Valley Consolidated Schools Waterville/Vassalboro/Winslow

3

3746

AOS 93—Central Lincoln County School System Great Salt Bay CSD/Bremen/Bristol/ Damariscotta/ Newcastle/Nobleboro/South Bristol/Jefferson

8

1529

AOS 94—SAD 46/Harmony Regional School District MSAD 46 (Dexter)/Harmony

2

1115

AOS 95—MSAD 10 (Allagash)/MSAD 27 (Ft. Kent)

2

1012

RSU 18—MSAD 47

(Oakland)/China3

RSU 19—MSAD 38 (Etna)/MSAD 48 (Newport) RSU 20—MSAD 34 (Belfast)/MSAD 56 RSU 21—MSAD 71 RSU

(Searsport)3

(Kennebunk/Kennebunkport)/Arundel3

23—Saco/OOB/Dayton3

RSU 26—Riverside RSU

Glenburn/Orono/Veazie3

1 School

districts reorganized into two types: Regional School Units (RSU) which consolidate all functions, and Alternative Organizational Structure (AOS) which consolidate central office functions but maintain locally administered schools (Maine Department of Education 2011).

2 SAU=

School administrative unit. Previous units were of several structures: school unions, municipal districts, school administrative districts, and community school districts.

3 One

or more partners petitioned to withdraw since 2012, Maine Department of Education (MDOE).

DESCRIPTION OF THE STUDY

T

his paper presents research describing the early impacts of Maine’s policy of school district consoli-

dation on educational opportunities and equity within 24 regional school districts, one year after their mergers.

Specifically, we asked three questions: (1) What changes in educational programming and opportunities resulted

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from the consolidation? (2) How have newly formed districts pursued educational equity? (3) What were the challenges and supports for school districts’ efforts to reorganize their educational program?

These findings are part of a larger, multiyear project on the implementation and impact of school district consolidation in Maine (Fairman and Donis-Keller 2012). All 24 reorganized districts that became operational in July 2009 were invited to participate in the study, and all agreed to do so. These districts were geographically dispersed across the state and varied in the number of merging partners, the types of school units, grade spans, and enrollments (Table 1). Total enrollments ranged from 1,000 to 4,000 students, and the number of merging districts ranged from two to ten.

We used a case study research design and qualitative data from interviews, documents, and observations. We conducted confidential interviews in October and November 2010 with 46 superintendents and central administrative staff responsible for educational programming. We also conducted interviews with five statefunded consultants who assisted these regional districts in their first year and with two officials coordinating consolidation efforts from the state Office of Reorganization Management. We collected district documents describing decisions about education programming including minutes of board meetings and original reorganization plans submitted to the Maine Department of Education (MDOE). We observed several statewide meetings of reorganized districts in which district leaders discussed challenges, opportunities, and progress toward reorganization goals.

We systematically organized and analyzed data from the interviews, documents, and observations, and coded interview and observation notes according to themes using NVivo software. To operationalize the concept of “equity,” we followed Stone’s (2002) usage to indicate distributions regarded as fair, even though they may contain both equalities and inequalities. “Educational opportunity” is understood to mean expanding students’ access to particular education programming and improving the quality of these opportunities. We also asked interviewees to describe their definitions and approaches to equity. The research team prepared analytic tables using all data sources to summarize data for each case and conducted systematic cross-case comparative analysis (Yin 2009).

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this paper relies extensively on interviews with leadership in the central office and does not include the perspective of school-level personnel (principals, teachers and staff, students) or other community stakeholders. In addition, because we collected data at the beginning of the second year of operations (fall 2010), this paper presents a snapshot of districts’ efforts to improve educational opportunities and equity one year into reorganization. With more time, some of these units would have continued their efforts to align and improve education programming, while a few have subsequently pursued deconsolidation.

CHANGES IN EDUCATION PROGRAMMING RELATED TO CONSOLIDATION

T

he 46 interviews from the 24 newly formed districts create a complex picture of the changes that can occur as a result of consolidation. Our analysis indicates that a majority of the 24 consolidated units, nearly two-thirds, were in the process of changing significant elements of their education programming. Nearly a quarter focused mostly on operations, policies, and bringing school boards together during the first year, while other units pursued operational and organizational work alongside education programming, curricular alignment, and equity.

All but two of the 24 districts reported changes to some aspect of the delivery and content of their education program. These changes included expanded technology; increased gifted and talented programs; added or expanded prekindergarten or kindergarten programming; alignment of special education services; perceived improvements in education programming in certain subject areas; and improved professional development for teachers. About a third of the districts, however, described only modest changes, and typically impacts were not experienced uniformly across partnering towns or schools. Among the districts that described changes to their education program, threequarters emphasized that the smaller towns or schools experienced a more positive impact than their larger partners. Some districts made changes to their education program right away. Others initially spent more time examining current practices, bringing staff together for a common purpose or to share ideas, and/or focusing on operational concerns. Many district leaders discussed anticipated impacts resulting from groundwork laid within the first year.

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Three-quarters of the districts noted improved educational opportunities for students linked to consolidation. Some superintendents noted that being in a larger district made resources available, which enabled them to offer more opportunities to all students. For example, comparing programming two years before the merger, one superintendent described the impact of consolidation across the region: “looking at kids regionally now…are they better off than they were before? I don’t think anybody can argue that they’re not…[given] the strength of programming.” Many, however, described greater benefits for certain schools and partners, typically the smaller schools and towns that were perceived as having more limited resources prior to the merger. A superintendent stated, “This is going to sound negative, but it has increased the opportunities for [smaller partner] but has not changed the opportunities for [larger partner].”

A handful of administrators noted the difficulty of determining whether changes in the education program actually constituted improvement at the student level, particularly given the short time frame, but shared positive perceptions about trends and the potential impact on student learning opportunities and achievement. A curriculum director stated, “when you come to do a follow up in three years there’s going to be a lot more that I can say that we [have] put in place.”

In Pursuit of Equity In each merged system, differences in education program and resources existed between partnering units.

About two-thirds of the districts noted improved or increased equity of educational opportunity in some aspect of their programming, but the breadth, scope, and extent of these impacts varied across units. While a handful of districts were laying the groundwork to move toward equity, a few described not having addressed equity issues at all during the first year. District leaders voiced diverse perceptions about and definitions of educational equity. Further, districts’ pursuit of equity varied along a broad continuum from a commitment to equality in programming, to a focus on parity or consistency in programming, to continuing in the same trajectory as before consolidation with minor modifications.

Given the diversity of definitions, many districts struggled to define what equity should look like across their new district. Two districts took an explicit position that they would not promote equity in a way that would diminish programming for some partners; characterized

by one administrator as “equity without going backwards.” A superintendent described the school board confronting the issue in its earliest days: The first thing we asked the new school board to do… [was to] make a proclamation that we would move toward equity in programming across the entire RSU. [We knew] we would find inequities that we would, over the course of the next several years…try to remedy.

That we wouldn’t be able to make a commitment of equalizing everything right off. We would do it more on the positive side and that would take a little more time….But in the effort to equalize things, we were not going to destroy programs.

Three-quarters of the districts noted improved educational opportunities linked to consolidation.

Other districts conceded that compromises would be necessary. Several described setting a per pupil funding amount for particular resources as a strategy to promote equity. A superintendent explained: When we prepared the…budget we did everything through the lens of equity. Some schools had only been spending $2.50 per student and others had been spending $25.00 [on library books]. There was concern that we were taking away from people who had consistently been funding their libraries, but we needed to come to equity…have that be our baseline. So we established baselines and said we will grow from here.

And people really like the concept. We were very public about that so that everybody at each of the schools and in each of the communities knew that we were being fair about it.

Finally, approximately one-quarter of the districts chose to maintain the status quo in education programming after consolidation, despite identified differences, arguing that more time was needed to build consensus around change.

In difficult budget times, moving toward greater equity and improving programming for a less-resourced partner resulted in sharing existing programs, resources, or personnel across the broader school unit, or investing

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in one partner more heavily in the short-term. This shift in resources resulted in perceptions that there were winners and losers among merging partners. A superintendent in a system that merged partners of varied size, structure, capacity and resources, observed that “one person’s equity is another person’s inequity.”

As they began the second year of consolidation, improved equity remained a goal for many districts.

Administrators described their movement toward greater equity as a work in progress. They discussed a variety of ways in which their current work will lead to future impacts, desired improvements, and in many cases, enhanced equity.

Districts that had enhanced technology as a result of reorganization also anticipated educational benefits of greater classroom resources or expanded class offerings using videoconferencing technology. Others predicted that investments in education programming that resulted from reorganization, such as expanding kindergarten and pre-kindergarten programming, would build greater equity and improve the quality of their education program over time.

Changing the education landscape within the new units was not seamless. Virtually all districts that indicated improved equity noted numerous challenges to realizing their goals. Within reorganized districts, equity conversations were driven by budgeting and planning, and by formal and informal audits of current practices and programs in combining units.

The pathways toward greater equity were as varied as the districts.

We identified seven primary strategies that consolidated districts used to address educational disparities and inequities within their systems.

• Taking stock of existing programming and resources • Establishing district-level structures and processes to address programming concerns and setting priorities • Aligning technology; broadening offerings, curriculum, and programs • Enhancing professional development • Increasing the use of data to inform decisions • Reconfiguring schools and grade levels to increase parallel opportunities and practices

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• Many districts employed one or more of the strategies to bring together divergent education programs.

Taking Stock Districts assessed the education programming within each partnering unit in different ways, ranging from a formal audit to informal observation. The strategies to identify existing programming included administering a district-wide teacher survey; developing a template to lay out information from each school and previous system; and establishing (or expanding membership of existing) curriculum teams to gather and analyze information in particular content areas.

Before the merger, one-fifth of the districts had established education-focused subcommittees to research the similarities and differences in programs and resources among the partnering districts. For many districts, however, the first step toward taking stock of staffing and programs took place as part of developing a first district budget in the early months of consolidation. Many districts reported at the beginning of their second year that they were still in the process of establishing a committee to oversee and execute district-wide education programming. Yet, others relied on central office staff to compile the information. In addition, some district partners were accessing the expertise of a curriculum director for the first time, to lead the education programming and professional development in the district.

The strategy employed to assess resources and needs varied based on the climate and familiarity among partners entering the reorganization. Units that included only one new partner, or a smaller partner, tended toward a more informal approach, whereas mergers comprising larger units and/or districts that had not previously collaborated used a more formalized process.

Structures and Processes Faced with bringing disparate education programs, cultures, and structures together, superintendents and other district leaders described convening two types of special purpose groups: (1) groups focused on bigpicture issues including setting district priorities and performance goals; and (2) groups focused on particular components of the education program, such as content areas, vertical integration of curriculum, or district oversight of the education program.

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Big-picture groups included community events such as a Future Search, a large-scale meeting to bring community members together for structured discussions to establish collective priorities. Nearly half of the districts had conducted a goal-setting activity with community stakeholders to establish a new mission and vision within the first year. These community-wide processes were credited with bringing together divergent views to set priorities and a district work plan. Other districts held board retreats to consider similar issues.

Groups focused on components of the education program included district-wide or building-level curriculum teams, education subcommittees of boards, and study groups. Larger partners often had more existing structures in place and expanded them to incorporate new participants. A curriculum director described the benefit of being able to rely on structures established within one merging partner that were extended across new districts: I…think that the structures that we’ve had…in place for [our former unit] in decision-making, we were very fortunate….Because even though you have to come right down to another district buying into those structures, they have … guided us into some of the decisions that we [made]. Having [a] decision-making curriculum…it’s already there, and they come to the table and talk things out together. We didn’t have to start those structures.

Other districts developed new structures to meet new needs. Two-thirds of the districts described changes in curriculum committees and structures that had resulted from reorganization. Approximately half described establishing district-level content area or grade-level curriculum teams. Another half described some kind of district-level curriculum oversight, which included design teams, administrative teams, and advisory councils. Half of the districts also described other types of district-wide groups focused on education programming, which included school board education subcommittees; task forces focused on specific initiatives; and curriculum groups that included citizen participation.

The majority of reorganized units had at least one structure in place to work on curriculum and instruction issues, but many had multiple groups. While the structures served the practical purpose of advancing alignment of curriculum, instruction, and assessment in selected content areas, district leaders also highlighted

the important community-building role this type of committee work played. Committees that spanned schools and former district boundaries helped foster an increased sense of professional community and shared ownership of district work.

Aligning Technology Many districts needed to address technology across the reorganized unit early on and at multiple levels.

Often, smaller units had more limited resources for technology than their larger partners. Nearly threequarters of the districts noted enhancements to their technology due to reorganization. About a third of all districts noted benefits to all regional partners. A little more than half reported enhancements for only certain district partners. Just a few saw no enhanced technology due to reorganization.

Nearly half of districts noted that they had changed technology infrastructure (email, network, systems) and were moving toward greater commonality or equity in this area. At least four districts reported expanded use of videoconferencing to offer classes for students or meetings among teachers and to overcome distances between schools and communities. Others discussed a renewed focus on using existing videoconferencing technology for school business (for example, administrative team meetings) or to begin to share classes.

About one-third of districts reported changing to a common student information system (MDOE supported conversion to Infinite Campus, a webbased student information system). Some districts noted a greater consistency of software, others noted expanding availability of tools such as Smart Boards, and nearly half viewed recent investments in laptops for secondary students or teachers (in most cases to equalize resources across the district), as related to reorganization. One district specifically designated funds derived from reorganization-related savings in central office expenses to upgrade its technology resources with a specific focus on the high school.

Technology instruction also changed as a result of reorganization. Slightly more than one-third of districts reported moving at least one merging partner to a new model integrating technology into classroom instruction rather than sending students to a technology lab.

Changes to staffing levels were mixed. Some schools benefitted from increased staffing while others experienced a reduction or loss.

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Shifts in Curriculum and Assessment, Programs, and Personnel Many reorganized units had made changes to their education programming, particularly in curriculum and assessment (notably math and language arts). Other changes included expanded or new gifted and talented, and kindergarten and pre-kindergarten programs.

Personnel changes involved shifting or consolidating staff.

These included positions such as subject area coaches or specialists, technology integrators, and data analysts.

Impacts to curriculum and assessment were most notable in English language arts (ELA) and mathematics. Approximately two-thirds of the districts described changes in ELA including the addition of a literacy coach, implementing a new district-wide reading curriculum, adopting common writing assessments, and adding a reading workshop. In math, onehalf of the districts noted changes including implementing a common curriculum district-wide or implementing it within new partners, and implementing new professional development to accompany the new curriculum. In some mergers, partners were using the same curriculum, but some had out-of-date materials. Reorganization provided a context in which districts decided to update those materials and use teachers from one partnering unit to offer professional development to teachers in another.

Though approximately one-third of the districts changed their world language programming to address inequities, the expansion of world language programming in some schools was accompanied by a change in the delivery mode or a reduction in programming elsewhere in the district. Some districts acknowledged inequities in this area that they wished to address, but they also described budgetary concerns that inhibited expanded world language programming in the short term.

Nearly half of the districts noted impacts to specials programming, particularly in music. Almost all of these units characterized the changes as a move toward equity.

For example, all schools adopting the music curriculum of one partner or expanding programming to schools that did not have music before reorganization.

Gifted and talented, kindergarten, and prekindergarten were other programs addressed by multiple districts. About half of the reorganized districts made changes to their gifted and talented programming, in most cases increasing opportunities for district students through improved coordination and added staffing.

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either to kindergarten or prekindergarten programs, mostly by offering prekindergarten programs in communities where none had existed previously or by expanding program hours in existing programs.

Districts also collected information about the alignment of their assessment practices. The majority of districts reported that they had made some progress toward alignment, and several reported significant progress. Many of the reorganized units found overlap in the use of particular assessments (for example, all partners were already using NWEA assessments). In others, introducing and implementing particular assessments across the district became a priority. At least one-quarter of the districts were in the planning stages of aligning report cards, but a few had done so in the first year.

Similarly, many of the districts that had more than one high school after reorganization were discussing the alignment of graduation requirements.

About one-third of districts either added personnel or equalized staff serving in specialist, coach, or data analyst roles. Typically, math or literacy specialists, coaches or data analysts were new to at least one partner in the district. In some cases, these resources had been used in one partner and now were shared across multiple sites By drawing on the expertise of teachers and sharing them across schools in the new unit, districts were able to expand programming. In many of these units, the ability to share a teacher meant bringing that subject into schools that had terminated programs due to past budget cuts. The most commonly shared staffing was in art, music, technology, world language, and in the gifted and talented program. Within the first 18 months of operation, seven units reported sharing an art teacher, a music teacher, or both across their regional unit. World language teachers worked across buildings in a handful of districts. Other shared staff included literacy specialists, guidance counselors, special education specialists, and technology staff. In four districts, administrators were also transferred into new buildings to enact changes in climate or performance. A superintendent described the benefit, “I have people taking care of the needs and we’re not worried about boundaries.” Another noted that in an environment with declining enrollments “We’ve been able to transfer people to better utilize them and benefit kids.”

Sharing resources also had a downside. Administrators described several cases where equalizing staffing meant a reduction within schools that previously enjoyed higher levels of service. Some districts made a clear

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choice to leave the distribution of personnel and programs as they were prior to the merger to avoid controversy.

Administrators in one-third of districts identified disparities in teacher contracts as the biggest obstacle to increased staff sharing. One district found a short-term solution by establishing district-level teaching positions that were not linked to a particular school or community. All districts anticipated greater sharing once unified contracts were negotiated.

Enhancing Professional Development The majority of reorganized districts in our study described enhanced professional development in their districts that they attributed to consolidation. This included expanded professional development opportunities or resources; greater opportunity for sharing and collaboration across education professionals; and/or a greater coordination of professional development.

Slightly more than half of the districts noted enhanced professional development for staff after reorganization, but almost all of those districts noted greater benefit for certain district partners. In addition, approximately one-fourth of districts reported changes to professional development that benefitted only some district partners. The remaining one-fourth saw no notable improvements to professional development after reorganization.

Sharing staff expertise across a larger unit was identified as a major benefit of reorganization in three-fourths of the reorganized districts. For example, a curriculum director described, Getting all the teachers together from all the districts has created a much better environment for creating assessment, for creating curriculum materials. You have more resources. So you don’t just have the one science teacher…figuring out what to do next. You’ve got an actual professional learning community.

Additionally, about one-third of the districts noted a change in internal trainings in which staff from one partner which had expertise regarding a particular curriculum, assessment tool, initiative, or software system shared practices and information with staff from another partner. In about half of the new districts, a program or initiative that had been in place within one partnering unit was expanded to other partners.

In more than one-third of districts, administrators noted that professional development was more unified since reorganization. New initiatives that brought staff

together with a common focus were successful in merging separate staffs, reducing professional isolation, and advancing collaboration. About half of the districts also noted improved access to external professional development opportunities or support from external consultants.

Changing Use of Data Among the newly reorganized districts, many described increased attention to, and proactive use of, student data to make programmatic and instructional decisions. Though many administrators reported using data effectively before reorganization, for others reorganization had provided a catalyst to do so. As districts sought to compare the relative effectiveness of programs, outcome data became an obvious metric.

Administrators reported data-use practices that varied at the district, school, and classroom level and between partnering units. Two-thirds of the districts reported some change in practice with regard to the use of data within at least one merging partner. Several districts noted plans to increase their capacity in the use of data. Meanwhile, one-third of districts noted that reorganization had not had any impact in this area.

To facilitate greater data use, districts needed to align data systems, but few merging units had the same student data system in place. Many districts faced a choice of adopting an existing system or acquiring a new one to meet new needs. Administrators noted that reorganization made costly system updates possible, updates that would have been prohibitive to implement if they had stood alone. Not all districts attributed acquiring a new system to the reorganization, but they saw benefit in doing so simultaneously with reorganization.

A number of districts increased support for teachers’ use of data by providing access to a full-time curriculum person or a staff person assigned to data analysis.

Districts facilitated examination of student data in different ways including district-level data teams and formal and informal professional development activities.

In a handful of reorganized units, superintendents identified curricular decisions influenced by data. Looking at student performance data, they evaluated what was working well and expanded the use of practices or materials based on that information.

Reconfiguration/Restructuring of Schools One of the most aggressive strategies used to address disparities in programming and resources was to reconfigure the grade span of schools in the district.

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Within the first year after reorganization, six districts (one-quarter) chose to move students from one building or community to another. An additional district had concrete plans to do so in the next year, and several others had brought such proposals to their board and community.

The rationale for making significant structural changes to existing schools was to address disparities in educational preparation and performance and to offer students additional programming and opportunities. In many cases, most students within a reorganized unit would ultimately enroll in the same high school. By consolidating particular grade levels, districts also saw

Administrators identified changerelated anxiety as one of the top challenges they faced. the opportunity for greater economies of scale without closing schools. A superintendent described how moving middle school students within the district created greater equity: It’s creating equity in all [the] towns. One of the best examples is if you look at [the new] middle school… all the kids have the same access to…the exact same number of teaching minutes, the exact same program, the exact same opportunities…the full-time guidance counselor, the full-time social worker—things that all the towns didn’t have access to.

The districts that reconfigured schools focused predominantly on the middle grades (primarily grades six through eight). Two moved all students in middle grades into an existing middle school. One changed the structure of all schools, creating four school levels (K–2, 3–4, middle school, and high school). Another introduced school choice for seventh and eighth-grade students who could attend either a K–8 or middle school in the district. Finally, one district described plans to restructure their secondary program wherein two 9–12 schools would be reorganized into an 8–9 school and a 10–12 school, to equalize programming, offerings, and resources. In most cases, administrators

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viewed these changes as improvements for students that came with an added bonus of savings in teaching positions and other costs. This kind of organizational change happened more often in districts with a previous collaborative relationship.

Changes of this sort were not without detractors, and an administrator characterized the decision to move students as “incredibly painful.” Administrators described communities resistant to these reconfigurations, some because of the added burden on students to be educated farther from home, others because they worried that moving students portended school closures in the future. Communities also lamented the loss of middle-school sports and tradition in the sending communities. As a result, administrators noted the need to tread lightly in attempts to move students out of their local schools and to cross town lines, or to initiate discussions of possible school closures. Additionally, public feedback caused some districts to rethink, recast, or slow plans to make these sorts of organizational changes. These districts, however, favored educating students at the same grade level in the same building to ensure greater equity for students.

Challenges and Supports District leaders described many challenges and supports to bridging disparities in education programming. Although each district had unique circumstances, we heard consistent themes with regard to the challenges and supports encountered in many of the reorganized units.

Challenges Administrators identified change-related anxiety as one of the top challenges they faced. As districts pursued equity goals, other challenges included limited financial resources; resource allocation; workload and time constraints; concern among smaller partners of being “swallowed up” by larger partners; significant differences in education programs and policies; and differences in teacher contracts.

To differing degrees, anxiety around the change in district structure led to some mistrust between partners and between school staff and district leadership. It also led to some resistance to enacting new initiatives and policies. As one superintendent put it, “they still want things to be the way they always have been.”

Administrators also described lingering resentment

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from community members opposed to consolidation who continued to ask, “why are we together?”

Reorganized districts found budget constraints created particular difficulties as they tried to align education programs, especially as they sought to address inequities. Some districts were able to establish greater equity during their first year of operations only to have budget cuts undo it at the beginning of the second year. Others postponed plans to address disparities due to resource limitations. Budget issues also affected professional development, by reducing districts’ ability to send teachers to outside training. Additionally, district leaders noted difficulties in unwinding the complex relationship between reorganization-related and recession-related impacts to the district budget. A number of superintendents noted that the public often conflated the two.

Districts encountered difficulties in correcting inequities among partners without diminishing programming for some. When a district that felt it had fewer needs joined with one perceived as having many needs, many people raised concerns about potential resource drain from one partner to another. In some districts, this was experienced as a negative impact. Administrators described doing a “constant double-check” on decisions to mitigate or address equity concerns.

The increased workload associated with reorganization was noted by two-thirds of district leaders as a particular challenge; the activities of reorganizing were added responsibilities that needed to be integrated with other ongoing work. Closely related to this was an acknowledgement that time was a particular challenge— time to tackle a complex agenda and to develop as a team. An administrator described underestimating the workload, noting “the sheer volume of what has to happen and how long that can take, and the feeling like there are so few of us to do it. Everyone is working at more than maximum capacity.”

Nearly half the districts discussed the fear among the smaller partners of being overshadowed or dominated by the larger units. This issue surfaced in initial conversations about consolidation and permeated almost all aspects of consolidation work in districts that had an imbalance in the relative size of merging partners. Some administrators acknowledged that the smaller partners’ fear of having policy, practice, and programming imposed upon them by the larger partner had become a reality. A superintendent in one district observed: A lot of what has happened is the new RSU has simply assumed the structures that existed in [the larger

partner]. If there are hard feelings, between [smaller partner] and the other towns, part of it lingers because of that. Because of [smaller partner’s] feeling that they were absorbed by the bigger fish.

Even in mergers that did not involve significant differences in district size, some noted “territorial” issues or community suspicion. Administrators also highlighted the difficulty of honoring differences and past experience while simultaneously working towards change. A superintendent described trying to initiate a more participatory process, but that a smaller partner still felt that reorganization had “happened to us.”

One of the main challenges to bringing education programming into alignment has been the variability in practices and programs across the consolidated units. An administrator described his belief going into the merger that the partnering systems shared many similarities, but when they began to work together, “every time we took a lid off a pot we found a different soup in there.” Even among districts that had done extensive comparisons of education programming, curriculum leaders noted differences were still coming to light.

Finally, differences in teacher contracts posed significant challenges to many new districts specifically as they pertained to working conditions. By contract, some teachers were required to engage in curriculum work.

Others in the same district, working under a different contract, did curriculum work voluntarily. Within the same working group, stipends differed depending on the staff members’ contract and prior district. Teacher contracts also prevented more active sharing of personnel across school buildings. Until contracts could be renegotiated, establishing a common calendar and similar contractual expectations around staff responsibilities and professional development remained an obstacle within many units.

Supports District leaders described supports that fell into roughly two categories: those that supported reorganization as a whole and those that particularly supported creating greater quality and/or equity in education programming. Although they were not observed in all cases, administrators described these supports as providing scaffolding for the process to bring about changes to education programs after consolidation. Many of these actions resonate more broadly with school change literature and are not specific to reorganization. While leaders identified

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these supports as significant, they made few claims to having mastered the process.

Supports included establishing structures and opportunities for staff from separate schools and units to come together to focus on education programming; creating time and allocating resources to support establishing relationships and trust; engaging the district and communities in a strategic planning to establish priorities and timeframes; attending to workload issues and time constraints and augmenting with external resources as needed; communicating with teachers staff and community stakeholders to promote transparency; leveraging existing structures and processes operating with success in a strong partner; setting realistic timeframes and expectations as the districts come together; and having strong leadership to guide districts’ efforts.

A majority of the district leaders noted the importance of providing structures and opportunities for teachers, administrators, and combined committees to work together. Coming together for common purpose yielded several benefits. It created the opportunity to share expertise across a larger group of professionals and to incorporate complementary pockets of expertise among staff. Multiple leaders described this as a key benefit of consolidation, and these meetings were credited with breaking down barriers between former units, school buildings, and even grade levels. Establishing representation from all schools and grade levels also lent credibility to the work done under their aegis.

Districts identified activities that promoted trustbuilding as another critical support. Districts cultivated relationships in a number of ways: through committees, decision-making processes, and working toward common goals. Without trust, partner schools and systems were unlikely to advocate for the initiatives of the new unit. Many administrators stressed the importance of honoring different cultures that came together in the mergers. For example, a superintendent explained: To me it’s all about culture building [and] the melding of those two cultures. It’s the institutional history that I don’t have about [new partner district]. How they made decisions? Why they made those decisions?

You’ve really got to pay attention to the relationships, and the community values, and people feeling hurt, and that they’re not being swallowed up by the [the bigger] district.…You just can’t do it overnight….You really have to pay attention to that culture piece.

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Many districts asserted that establishing priorities through a strategic planning process was essential due to the limited timeframe and resources districts were facing.

Through these processes, districts gained community support and established clearer directives for school leaders. Establishing priorities enabled districts to focus on a particular set of activities. New priorities also served as a rallying point for staff and faculty. Some administrators emphasized the importance and effectiveness of setting a common goal for staff to work toward that was new to all district partners.

The majority of districts engaged external consultants to support and facilitate strategic- planning activities, work with the administrative team, or look at particular program areas. A team of consultants was contracted by the MDOE to specifically support education planning within reorganized districts. The majority of districts took advantage of these free services, and some contacted with additional consultants to support further work. Administrators highlighted the value of having an impartial external party facilitate discussions.

Providing sufficient time to pursue the work of reorganizing was also a pervasive thread throughout almost all district interviews. Time was necessary for meetings and strategic planning to occur, relationships and trust to form, and for providing opportunities for reflection and communication. Administrators were emphatic that the increased workload not be underestimated and that expectations and timelines needed to be managed realistically. District leaders recommended retaining staff that seem duplicative in the initial stages of consolidation until farther along in the process, or hiring external consultants to support the administration through the transition. Reflecting on the lessons learned through this process, one superintendent commented that the skill set required to lead changes in the education program of this magnitude might require additional support: “Just because you’ve been in education all your life, doesn’t mean you’re the right person to lead educational change….Bring in people [consultants] that can help.”

District leaders cited communication and transparency about proposed changes as critical both internally and to external stakeholders. District leaders needed to provide opportunities to hear from teachers and principals from merging partners. A superintendent described holding focus groups with building staff in each partnering unit. He stated, “I’m not there

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to talk them out of how they’re feeling or tell them ‘that’s not true.’ My goal is just to listen, take notes… and share that.”

Rather than reinvent strategies to accomplish new work, district leaders advocated leveraging existing structures and processes. In some districts this meant relying on a “strong dance partner” who had an established structure in place coming into the merger.

Districts that had a functioning preexisting structure were able to assimilate additional members rather than create structures from scratch, which enabled work to get underway quickly.

A number of administrators and the consultants who supported districts’ planning efforts emphasized the importance of leadership. Having the right people in place was noted as significant to making progress, but the necessary characteristics of that person varied. In some cases, experience was important, but in the few instances where the superintendent was completely new to the reorganization and its partners, administrators commented that after the tumult of planning for consolidation, new leaders arrived without baggage or ties to any particular partner.

districts. Overall, in consolidations that had a size imbalance between partners, larger systems could point to fewer education equity benefits accrued to them through the process. While many of the new units identified the goal of increasing equity, it was hard to measure equity impacts within only a year of implementing changes. In addition, some districts had not yet made anticipated changes. Finally, a few had not identified equity as a top goal. Some challenges that districts faced in bringing about equity included aversion or resistance to change; limited financial resources; resource allocation; workload and time concerns; concerns about smaller units being overpowered by larger partners; perceptions around winners and losers; significant differences in programs and practice; and disparities in teacher contracts.

Administrators in reorganized districts noted a number of supports that helped advance their work despite these challenges. A major supporting factor was the decision to bring staff together from the partnering units to focus on education programming, alignment quality, and equity. This strategy allowed districts to promote relationships and trust across the larger unit and benefit from the deeper expertise now available to

OBSERVATIONS

A

lthough our study examines the education impacts of school district consolidation at an early point in the implementation process (at the beginning of the second year of the mergers), there is evidence that a majority of the districts did implement changes to increase educational opportunities and equity. Changes included impacts to professional development; the use of technology resources and personnel; education program offerings and delivery in newly configured schools and grade spans; changes to curriculum and assessment; changes in data use practices; and movement of personnel. Additionally, some districts were changing the structures and processes that they used to drive both district operations and education programming. Moreover, many districts pointed to explicit curriculum change, expansion of program offerings in certain schools or towns, and ways in which certain partners and schools are benefitting from greater staff expertise or material resources.

Yet, not all districts made changes or improvements, and improvements were not always of equal magnitude across the partnering schools and towns in the new

…not all districts made changes or improvements, and improvements were not always of equal magnitude across the partnering schools and towns….

the new district. Other supports included engaging the enlarged district and communities in strategic planning to help establish priorities and timeframes; attending to workload issues and time constraints; prioritizing communication and transparency with teachers, staff, and community; leveraging existing structures and processes deemed successful; and setting realistic timeframes and expectations as the reorganization evolved.

Ultimately, districts described many ways in which their education programs, opportunities, and equity have changed as a result of school district reorganization.

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Districts continued to grapple with the difficulty of achieving equity, what it means and what it should look like in their newly formed districts. Still, many continued to move forward in pursuit of increased equity and opportunity, sometimes by unique and creative solutions dictated by necessity. ACKNOWLEDGMENTS The research reported in this paper was funded in part with generous support from the Davis Family Foundation and from the Maine Department of Education. The opinions expressed here are solely those of the authors and should not be attributed to any organization. The authors wish to extend special thanks to Dr. David Silvernail for early comments and suggestions.

REFERENCES Bard, Joe, Clark Gardener and Regi Wieland. 2006. “Rural School Consolidation: History, Research Summary, Conclusions, and Recommendations.” Rural Educator 27(2): 40–48.

Berry, Christopher. 2004. “School Inflation: Did the 20th-Century Growth in School Size Improve Education?” Education Next 4(4): 56–62.

Fairman, Janet C. and Christine Donis-Keller. 2012. “School District Reorganization in Maine: Lessons Learned for Policy and Process.” Maine Policy Review 21(2): 24–40.

Howley, Craig, Jerry Johnson and Jennifer Petrie. 2011.

Consolidation of Schools and Districts: What the Research Says and What It Means. National Education Policy Center, University of Colorado at Boulder.

Leach, John, A. Abigail Payne, and Steve Chan. 2010. “The Effects of School Board Consolidation and Financing on Student Performance.” Economics of Education Review 29(6): 1034–1046.

Maine Department of Education 2011. Types of School Administrative Units in Maine. Maine Department of Education, Augusta. www.maine.gov/education/eddir/ saudef.htm [Accessed September 30, 2013] Monk, David H., and Emil J. Haller. 1986. Organizational Alternatives for Small Rural Schools. Final Report to the Legislature of the State of New York. State University of New York, Ithaca College of Agriculture and Life Sciences at Cornell, University, Ithaca.

Nitta, Keith A., Marc J. Holley, and Sharon L. Wrobel.

2010. “A Phenomenological Study of Rural School Consolidation.” Journal of Research in Rural Education 25(2): 1–19.

Rooney, Kathryn and John Augenblick. 2009. An Exploration of District Consolidation. Report from Augenblick, Palaich and Associates, Inc., Denver, CO.

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Spradlin, Terry E., Fatima R. Carson, Sara E. Hess and Jonathan A. Plucker. 2010. “Revisiting School District Consolidation Issues.” Education Policy Brief 8(3).

Center for Evaluation and Education Policy, Indiana University, Bloomington.

Stone, Deborah A. 2002. Policy Paradox: The Art of Political Decision Making. Norton, New York.

Yin, Robert K. 2009. Case Study Research: Design and Methods, 4th edition. Sage Publications,Thousand Oaks, CA.

Christine Donis-Keller is an education consultant with expertise in K-12 research, evaluation, and policy studies. She served as research associate at the Center for Education Policy, Applied Research and Evaluation at University of Southern Maine during this study and continues research on consolidation and other school reform initiatives. She is pursuing a Ph.D in Sociology of Education at New York University.

Beth O’Hara-Miklavic is an outreach and education specialist at Maine Community Health Options supporting strategic development and implementation of community and consumer outreach, education and marketing communications. She served as research associate at the Center for Education Policy, Applied Research and Evaluation at University of Southern Maine during this study and holds an M.A. in public policy from USM.

Janet Fairman is an associate research professor in the Center for Research and Evaluation, University of Maine. In addition to her research on school district reorganization, she also conducts research on math and science education reform and innovative classroom practices, teacher professional development and data use, and teacher leadership.

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NUTRITION EDUCATION

Policy Changes for a Nutrition Education Program in Maine: Issues and Implications

by Alan Majka, Janet Fairman and Kathryn Yerxa Food insecurity and preventable chronic disease have profound impacts on quality of life and health care costs in Maine. Many government programs have been developed to address these issues; however, effectiveness has often been limited by restrictive policies and less than optimal coordination. Alan Majka, Janet Fairman and Kathryn Yerxa draw upon research and state and national statistics to elucidate some of these programs, including their efficacy, limitations, potential and threats to their sustainability. The authors note that recent federal rule changes allow for greater impact through implementation of evidence-based strategies, yet at the same time, budget cuts in anti-hunger and preventive health programs threaten to undermine progress. Short-term savings may be outweighed in the long term by decreased academic performance in children and increased health care costs and disability as a result of chronic diseases such as diabetes.

I

n Maine and nationally, food insecurity and obesity continue to be important health concerns and the focus of policy. An estimated 14.9 percent (averaged from 2010â&#x20AC;&#x201C;2012) of Maine households are food insecure, meaning they lack access to enough food for an active, healthy life for all household members. Maineâ&#x20AC;&#x2122;s rate is statistically similar to the national two-year averaged rate of 14.7 percent. Food insecurity rates increased dramatically from 2007 to 2008 and have held steady since (Coleman-Jensen et al. 2013). The estimated national rate increased from 11.1 percent in 2007 to 14.6 percent of households in 2008, the highest prevalence observed since nationally representative foodsecurity surveys were initiated in 1995 (Nord, Andrews and Carlson 2009). Food insecurity and hunger reduce quality of life and health throughout the lifespan. Food insecurity is associated with inadequate intake of key nutrients, reduced health status, chronic disease incidence and risk, diabetes, and declines in school performance and mental health (Holben 2010).

Although families with limited incomes may consume more inexpensive foods of limited nutritional value, research on whether higher rates of food insecurity

correlate with increased risk for obesity has yielded mixed results (Holben 2010). According to U.S. Centers for Disease Control and Prevention (CDC) surveys in which heights and weights were self-reported, the prevalence of overweight and obese adults in Maine has grown from 52 percent in 1995 to 64 percent in 2012.

According to CDC data for 2012, Maine ranked 29th in the nation for obesity prevalence, but Maine had the highest obesity rate in the New England region. Excessive body weight is a risk factor for many chronic diseases including type 2 diabetes. Between 1995 and 2010, the prevalence of diagnosed diabetes in Maine adults rose by 117 percent, from 3.5 percent to 7.6 percent (Geiss et al.

2012). When undiagnosed cases of diabetes are included, the Maine Center for Disease Control and Prevention estimates that 11.4 percent of Maine adults had diabetes in 2010. CDC estimates that 11.3 percent of American adults have either diagnosed or undiagnosed diabetes (Geiss et al. 2012).

Food insecurity, obesity, and diabetes continue to be important health issues and policy concerns for Maine and the nation. This paper describes some key state and federal policies and programs, with emphasis

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on the Supplemental Nutrition Assistance Program (SNAP) and Supplemental Nutrition Assistance Program Education (SNAP-Ed), along with significant policy changes taking place currently.

Some of the changes may negatively affect resources to address these health problems, while other policy Federal changes have the potential to increase the effectiveness of interpolicy has â&#x20AC;Ś ventions. Specifically, we discuss potential impacts and implications created of reduced federal funding and nutrition policy and rule changes related to program implementation. education This paper draws on recent programs research and policy, publicly available data, and findings from a recent intended study conducted by the authors in Maine.

Our goal is to illuminate to improve issues related to recent policy the nutritional changes to inform public-health policymakers and providers and to choices do so within a more contemporary and health conceptual framework that considers the need for a combination of of people multiple intervention approaches to with limited significantly improve public health.

That is, we argue for the use of more financial effective public informational and educational marketing methods in resources. concert with policies and environmental changes that together would more significantly improve nutritional behavior and health.

FEDERAL POLICY FOR NUTRITION ASSISTANCE AND EDUCATION

T

he Supplemental Nutrition Assistance Program (SNAP), administered by the U.S. Department of Agriculture (USDA) Food and Nutrition Service (FNS), is the primary means through which food insecurity is addressed in America. To reflect the change from printed paper coupons to electronic benefits transfer cards, and to convey the message that the program is designed to provide temporary partial support, the name of the Food Stamp Program was changed to SNAP in 2008.

The legislation that authorizes and provides funding for SNAP is The Food Conservation, and Energy Act of

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2008, more widely recognized as the Farm Bill, which is currently up for reauthorization in 2013. In 2010, an estimated 75 percent of eligible Americans participated in the program (Eslami, Leftin and Strayer 2012). In fiscal year 2012, the program provided $74 million in benefits to more than 46 million people per month (Cunnyngham 2012). This means that as many as one in seven people in the U.S. receive SNAP benefits. State participation rates vary widely, with Maine and Oregon both having the highest estimated participation rate in the nation, with close to 100 percent of eligible residents enrolled in 2010 (Cunnyngham 2012). Average monthly SNAP participation for Maine increased by almost 52 percent from 86,459 in 2008 to 131,153 in 2012 (www.fns.usda.gov/pd/34snapmonthly.htm).

Federal policy has also created nutrition education programs intended to improve the nutritional choices and health of people with limited financial resources.

Beginning in 1992, FNS implemented the Food Stamp Nutrition Education Program (FSNE) in seven states.

In 1993, Maine was allocated $38,383 for FSNE. Corresponding with the 2008 name change from Food Stamps to SNAP, the name of the nutrition education program was changed from FSNE to SNAP-Ed. The purpose of SNAP-Ed is to improve the likelihood that SNAP participants and eligible low-income people will make healthy food choices within a limited budget and choose active lifestyles consistent with the current dietary guidelines for Americans and USDA food guidance. The dietary guidelines are revised every five years, with the most recent revision occurring in 2010.

Subsequently, changes in the implementation rules for SNAP and SNAP-Ed in April 2013 (Federal Register, vol. 78, no. 66: 20411â&#x20AC;&#x201C;20422) put greater emphasis on obesity prevention as a programmatic goal, alongside the goals of improving nutritional knowledge and health. This policy shift reflected the growing concern about rising obesity rates in the U.S. ROLE OF STATE POLICY IN NUTRITION ASSISTANCE AND EDUCATION

T

he USDA provides Maine with funds for SNAP, SNAP-Ed and other nutrition-assistance and education programs including the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child Nutrition Programs such as school breakfast and school lunch, and the Expanded Food and Nutrition Education Program (EFNEP). To a large

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extent, federal policy defines how programs will be implemented at the state level. Maine Department of Health and Human Services (MDHHS) directly manages SNAP implementation through its staff and offices. However, MDHHS awards contracts to other organizations to implement SNAP-Ed and WIC. Maine Department of Education manages Child Nutrition Programs, providing funds to schools and other entities.

Federal policy specifically designates EFNEP funds for use by land grant universitiesâ&#x20AC;&#x2122; Cooperative Extension programs. In addition to USDA-funded nutrition programs, the CDC provides grants to state government and other organizations in Maine for diverse nutrition and health-related interventions.

The primary source of funding for state programs for nutrition and health is the Fund for a Healthy Maine, which was instituted through tobacco industry settlements for the purpose of funding nutrition and health interventions. However, these resources are vulnerable as state policymakers sometimes consider using the fund for other purposes, such as balancing the state budget. In 2012, the state authorized the use of these funds for obesity-prevention programs beginning in 2014. This signals a shift in state policy, similar to the federal emphasis on obesity prevention through SNAP and SNAP-Ed, which could introduce more attention and interventions to prevent obesity. There have also been attempts to target nutrition and obesity prevention through state legislation targeting public schools, but these have often failed to be enacted. Examples of recent legislative bills that were not enacted include a proposal to require daily physical activity for public school students and a proposal to encourage stronger relationships between food producers in Maine and school food programs for the purpose of increasing fresh, minimally processed, and locally grown food in schools (LD 1160; LD 1431). One reason for the limited success in obtaining state policy initiatives to target nutrition is the constrained state budget. Another reason is the lack of political consensus about how to address nutrition and obesity problems. Further, federal legislation often supersedes state legislative efforts.

IMPLEMENTING NUTRITION EDUCATION PROGRAMS IN MAINE

Prior to FSNE, the University of Maine Cooperative Extension (UMaine Extension) had successfully used a paraprofessional education model that consisted of

recruiting local community members and training them to become nutrition educators in targeted regions. The paraprofessional educators teach practical skills such as meal planning, cooking, and getting the best value when purchasing food. For several decades under EFNEP, this has been an effective approach to reaching low-income families. From 1993 until 2012, MDHHS had a cooperative agreement with University of Southern Maine (USM), Muskie School of Public Service, and UMaine Extension to implement SNAPEd. As a result, USM founded the Maine Nutrition Network that provided grants, technical assistance, and training to many partner organizations, including schools. UMaine Extension used the funds to expand its paraprofessional education model. A major shift occurred in 2012, when the MDHHS made the decision to put SNAP-Ed out to competitive bid and awarded funding to the University of New England (UNE). Consequently, the Maine Nutrition Network was disbanded and UMaine Extension returned to using only EFNEP funds to provide a paraprofessionalbased nutrition education program with fewer staff members reaching a smaller audience.

PROGRAM IMPLEMENTATION ISSUES

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n 2012, UMaine Extension and the University of Maine Center for Research and Evaluation (UMaine CRE) conducted a study that included a statewide survey of SNAP participants in Maine, a survey of individuals who had recently completed the UMaine Extension SNAP-Ed program, and a survey of paraprofessional nutrition educators. The surveys explored the levels of awareness about nutrition education programs in Maine, participation and feedback on UMaine Cooperative Extensionâ&#x20AC;&#x2122;s nutrition education programs, barriers to participation in these programs, and interest in various nutrition topics and modes of education. In this section, we describe some of the findings from the two surveys of SNAP recipients as they relate to federal and state SNAP-Ed policies. Specifically, the survey findings provide evidence of the problems of low awareness and participation in the SNAP-Ed program for which all SNAP recipients are eligible. We also discuss implications of recent federal rule changes for nutrition education programs. Specifically, we examine implementation issues related to program delivery approaches, targeting choices, and the potential of effective media campaigns.

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Program Awareness and Participation Rate for SNAP-Ed

As mentioned earlier, the SNAP participation rate in Maine is very high—estimated at near 100 percent of those who are eligible. Though SNAP alone may not be sufficient to overcome food insecurity, it is a substantial source of support and the majority of people needing this assistance in Maine are participating in the program.

By contrast, awareness and participation in the nutrition education program (SNAP-Ed) is low, reducing the potential to change nutritional behavior and health through information and education.

… awareness and participation in the nutrition education program (SNAP-Ed) is low, reducing the potential to change nutritional behavior and health through information and education.

In the 2012 study of SNAP-Ed, we examined public awareness and participation in nutrition education programs in Maine. As part of that study, we conducted a phone survey with 650 randomly selected SNAP recipients across the state of Maine. Many respondents (76 percent of those with children in the household) reported they had participated in WIC education, while few (4 percent of those with children in household) indicated they had participated in any other nutrition education programs in Maine. The higher participation rate in WIC is almost certainly related its integrated program enrollment and education. Although nutrition education is not a requirement for receiving WIC food benefits, it is integrated at the same time and location when applicants are certified. When interpreting the survey results, it is important to consider that only adults were surveyed in the 2012 phone survey, so children and youth who participated in nutrition education programs at school and elsewhere would not have been included. It is also 58

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possible that some respondents may have been exposed to nutrition education without knowing or recalling the particular program source.

A major reason for the low adult participation rate in the SNAP-Ed program may be due to the lack of awareness. In the same 2012 phone survey of SNAP recipients, a majority (68 percent) indicated they were not aware of any SNAP–Ed programs in Maine. In fact, 83 percent indicated they had not heard of UMaine Extension’s program. When we surveyed the 367 individuals who completed UMaine Extension’s nutrition education program during the summer of 2012, 85 individuals responded (23 percent response rate) and indicated they had learned of the free nutrition education program through a wide variety of channels. Few had learned about it when they applied for their SNAP benefits. Despite the fact that MDHHS was the administrator for both SNAP and SNAP-Ed, and UMaine Extension and USM made many efforts to encourage MDHHS promotion of SNAP-Ed with SNAP participants when they visited MDHHS offices, only 2 percent of the survey respondents who had recently completed SNAP-Ed indicated they learned of SNAP-Ed at a MDHHS office where they applied for SNAP benefits.

This is in stark contrast to the 100 percent of WIC applicants who are offered nutrition education at the time of application and the consequent high rate of participation in WIC nutrition education described earlier.

Improving Awareness and Participation Rates

A new USDA rule published in the Federal Register in April 2013 amends SNAP-Ed regulations. In the rule, states are “strongly encouraged to coordinate activities and collaborate with community nutrition education and obesity prevention activities such as State Departments of Health and Education implementation of related State and Federally-funded programs” (Federal Register, vol. 78, no. 66: 20416). While past initiatives resulted in some nutrition education at SNAP offices, SNAP-Ed program awareness and participation could be dramatically increased by implementing better coordination between MDHHS’s SNAP program and contracted SNAP-Ed agencies. Improved collaboration between MDHHS and its contracted SNAP-Ed implementation agencies could result in nutrition education program awareness and participation rates that are closer to those of the WIC program. Moreover, since 41 percent of surveyed SNAP participants also participated in WIC, SNAP-Ed promotion by the WIC Program would likely be fruitful.

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Program Effectiveness

In the survey of individuals who had recently completed their participation in UMaine Extension’s SNAP-Ed program, respondents consistently indicated a high level of satisfaction with the program and its impact on their nutrition knowledge and choices. When asked how satisfied they were with UMaine Extension’s SNAP-Ed program, 96 percent of the respondents reported they were either “very satisfied” or “satisfied.”

When asked how useful the program was to them, 92 percent said it was either “very useful” or “useful.” All respondents said they would recommend the program to a friend. Respondents also indicated they had learned many useful things about nutrition. For example, 42 percent indicated that learning how to plan nutritious meals was the most useful thing they had learned. In open-ended comments, respondents said they had improved their awareness of nutrition, ability to select and prepare healthy foods, and awareness of ways to maintain a healthy weight. In an analysis of routine program evaluation data, adult participants reported diets averaging approximately 100 fewer calories per day after completing the SNAP-Ed program. This is equivalent to approximately 10 pounds of body weight over the course of a year.

Program Delivery Approaches to Nutrition Education

There are many possible approaches for promoting the goals of healthy food choices and an active lifestyle for those with a limited budget. In the past, federal rules for SNAP and SNAP-ED precluded some of the most promising evidence-based methods in favor of more traditional forms of education. For instance, media campaigns that disseminated information broadly were discouraged because some ineligible groups would receive the messaging. Moreover, efforts to affect nutritional health through policy and environmental contexts were not considered as acceptable SNAP-Ed expenditures.

A growing consensus among health-intervention experts supports the idea of using multiple approaches to address public health problems, based on evidence that simply providing information or education to the targeted individuals is the least effective way to motivate people to change their behavior (Frieden 2010). In recent years the “health impact pyramid” has been used as a conceptual model to illustrate the range of more effective approaches to improving population

health (along the broader base of the pyramid) to less effective approaches (closer to the top of the pyramid).

Broadly, there is agreement that the most effective means for changing health behavior and outcomes for the largest number of people is to target the socioeconomic factors that contribute to poverty and nutritional vulnerability. After this, changes in policies and environmental factors are also highly effective. Examples of policies to improve nutritional choice and health include mandatory food labeling to identify artificial trans fat in food, or banning the sale of soda in schools.

Examples of changing food, nutrition, and fitness environments include locating healthier foods in more prominent locations in schools, homes, or grocery stores; limiting or banning advertising for soda and candy in schools; making more nutritious ready-to-eat snacks available; and developing public paths and greenways for walking, running, and biking.

The chief difficulty in targeting a problem through addressing socioeconomic factors or policy or environmental change is mustering the political will and agreement on how precisely to pursue these types of change (Frieden 2010). More palatable change can often be achieved through targeted health interventions and treatments (middle of the pyramid model). However, these approaches are somewhat less effective in changing behavior and health and reach fewer people than the broader approaches. Finally, informational or educational efforts, though easier to implement, are only effective for those who are motivated and receptive.

Based on the input of the CDC, the Institute of Medicine, and stakeholders, the new USDA rule’s definition for SNAP-Ed education was recently changed to encourage states to use a broader range of educational strategies that include environmental and policy change. In addition, restrictions on inadvertently reaching ineligible audiences through the use of broad public information and media campaigns were loosened. SNAP-eligible populations must still be the intended audience for media campaigns; however, federal rules will no longer disallow a campaign because it may inadvertently reach those who are ineligible. These federal rule changes hold promise for increasing awareness and participation in nutrition education programs.

Due to federal restrictions previously in place, USM and UMaine Extension focused the majority of efforts on traditional education methods designed to increase nutrition knowledge and skills. This approach assumed

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program awareness, availability, and accessibility. It was also based on the premise that interest, motivation, and behavior may change as a result of improved knowledge and skills. As findings from the 2012 statewide survey of SNAP recipients indicated, there was low adult participation in, or even awareness about, any nutrition education programs including SNAP-Ed. Once adults are aware of nutrition education opportunities and are motivated to take advantage of them, there are many ways in which education and information may be delivered. Adult SNAP participants who responded to our survey indicated “something to read sent through the mail” was by far the most preferred method to receive nutrition information (76 percent of respondents). In this population, Internet videos and reading, email, texting, and social media were selected far less often, even among those who were 18 to 29 years of age (< 1–21 percent selected these forms of information). While some general educational materials have been mailed broadly to all Maine SNAP households, and UMaine Extension offered a mail correspondence course, targeted materials developed through market research to appeal to specific segments of the SNAP population could be sent through the mail. For instance, printed materials designed for families with young children may not be appropriate for older Americans without children in the home. This would be a relatively inexpensive way to reach a larger portion of the eligible audience with effective materials. Mailings could also be used to increase awareness and recruit more participants for classes to develop cooking and shopping skills.

An important targeting issue in the implementation of SNAP-Ed is whether direct education is delivered to children and youth in a school setting, or whether it is targeted towards those who are responsible for food selection and preparation in the home. Schools are often selected because children are a more vulnerable population, and it’s easier to reach students while they are at school than it is to attract parents and caretakers to participate in educational programs. While children consume much of their food and beverages at school, and they have some influence on parents and caretakers, more calories from added sugars are consumed at home rather than away from home (Ervin et al. 2012) and excessive calories from added sugars are primary causes of obesity. Perhaps the new federal SNAP-Ed policies will have greater influence on the

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nutritional environment and practices in the home, thereby having a greater impact on child nutrition.

Potential of Media Campaigns to Increase Participation in SNAP-Ed

Given the recent federal rule changes for SNAP-Ed that lift restrictions on reaching ineligible audiences, it is possible to make more use of media campaigns. Media campaigns can increase awareness of the importance of nutrition and motivate people to learn and take action.

Once an individual is interested and motivated, a more traditional educational program can be effective in providing the knowledge and skills that a person needs to make positive behavioral changes. An example of this approach is Maine CDC’s highly effective anti-smoking campaign that uses emotion-based television messages to get viewers’ attention and motivate smokers to quit, while at the same time referring them to a tobacco-quit hotline where they may access the tools they need to stop smoking. The new less restrictive SNAP-Ed rule permits and encourages the same level of coordination and sophistication. Overall, the rule changes allow for broad dissemination of nutrition information using communication strategies that have more potential to interest people and motivate them to engage in nutrition education, and subsequently change their eating behaviors.

IMPLICATIONS OF PROGRAM FUNDING CHANGES

T

he preceding sections described both positive and negative aspects of state and federal policy changes related to SNAP and SNAP-Ed implementation rules. Another major aspect of nutrition health policy centers on decisions about funding for these programs. As described earlier in this paper, the participation rate in SNAP rose significantly in 2007 and has remained fairly steady. There is ample evidence that hunger and poor nutritional health continue to be widespread health concerns in Maine and nationally. Similarly, participation in nutrition education programs through SNAP-Ed in Maine has increased dramatically since its inception. Despite the continued high need for these programs, significant reductions in funding have been proposed for SNAP and adopted in law for SNAP-Ed. Congressional debate over the reauthorization of SNAP in 2013 has resulted in initial proposals to cut

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NUTRITION EDUCATION

between $1.4 and $40 billion from the program over a 10-year period. The funding reduction of $40 billion would reduce the average monthly benefit that a family of four would receive by approximately $36, or almost $400 per year (Dean and Rosenbaum 2013). The current monthly SNAP supplement is considerably less than most households spend per week for groceries.

The funding cuts to SNAP would severely reduce resources for seniors and families to obtain food, leading to increased food insecurity and hunger and greater reliance on foods of minimal nutritional value. In 2011, 83 percent of SNAP benefits went to households with a child, elderly, or disabled person. One assessment of the potential impact of the proposed SNAP funding cuts estimated that five million people could lose their eligibility for SNAP, and that increased levels of poverty and hunger could result in an increase in health problems for adults and children (Health Impact Project 2013).

According to the recent assessment, the health consequences could include increased rates of obesity, heart disease, high blood pressure, and diabetes for adults and an increase in various physical and mental health problems and rates of hospitalization for children. Poor nutritional health among young children could produce more problems with developmental health and learning deficits (Rausch 2013). The financial consequences of increased health problems among low-income populations would also have a negative impact on state and federal health expenditures.

In addition to the increased health problems and health care costs, increased levels of hunger could also have negative implications for adult work performance and productivity along with learning and academic performance for youth. Students who attend school hungry and with poor nutritional health have trouble concentrating and learning and perform lower on educational assessments (Bogden, Brizius and Walker 2012; Health Impact Project 2013; Rausch 2013).

Nutrition education funding has also been targeted for funding cuts. The American Taxpayer Relief Act of 2012 (H.R. 8) reduced the funding available for SNAP-Ed to Maine in fiscal year 2013 by almost 28 percent (from $5,599,956 to $4,050,729).

This substantial reduction in funding has resulted in fewer resources, staff, and services to support nutrition education and diabetes prevention programs in Maine.

The resulting impact can only be negative for the eligible low-income families and seniors who want to learn how

to obtain nutritionally sound meals, adopt a healthier lifestyle, and reduce their risk of diabetes. Again, there are potential negative health impacts from reduced SNAP-Ed funding including reduced nutritional health, increased incidence of diabetes, and decreased performance at work and school.

While there may be short-term fiscal savings from the funding reductions proposed for SNAP and adopted for SNAP-Ed, these savings may be overshadowed by higher costs over the long term for health care, disability, and reduced learning achievement. For example, the

[The] substantial reduction in [federal] funding has resulted in fewer resources, staff, and services to support nutrition education and diabetes prevention programs in Maine. long-term economic cost of treating obesity in adults will be greater if the incidence of childhood obesity is not reduced (Gabe 2012). Economic costs of medical care and reduced worker productivity associated with the epidemic of overweight and obese conditions has been estimated at $2.5 billion for Maine (Chenoweth Associates 2006) and nearly $300 billion for the U.S. and Canada (Behan et al. 2010).

One positive policy change that occurred through the new SNAP-Ed rules is the elimination of the requirement for states to commit matching funds to obtain federal funding. The amount of SNAP-Ed funds UMaine Extension could accept in the past was limited by the amount of non-federal matching funds that could be raised. The recent rule change reduces the burden to states in their application for federal funding and could result in increased federal funding to states and increased numbers of people served by nutrition education programs.

CONSIDERATIONS FOR POLICY

I

n this paper we have described state and federal policies that target food insecurity, nutrition knowledge,

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and obesity. Some of the recent policy decisions may negatively affect the ability to serve those in most need of nutrition assistance and education in Maine. The reductions in federal funding that have been proposed for SNAP and that have been approved for SNAP-Ed have the potential for increasing food insecurity, hunger, and both short-term and long-term negative health impacts and costs, along with having other negative effects on productivity and academic performance.

Other policy changes, such as changes in the federal SNAP-Ed implementation rules, provide more reason for optimism. The federal rule changes have eliminated the need for state matching funds to receive federal funding for SNAP-Ed, making it easier for states to use allocated federal funding for this program. The rule changes also encourage increased levels of cooperation and coordination among state agencies and service providers, which could improve program recognition, participation, and impact. Further, the federal rule changes give states more flexibility in how they use SNAP-Ed funds to address nutrition education. Finally, the new rules urge states to move away from a heavy reliance on information dissemination and traditional education alone that may reach a small percentage of those in need, to a more comprehensive and multi-level approach that includes policy change and transformation of food and fitness environments to effect more significant improvement in nutritional and fitness outcomes for a larger segment of the population.

While the federal SNAP-Ed rule changes provide greater flexibility to states, much will depend on how state policymakers use this opportunity to develop and implement more effective approaches to address nutritional health. Some effective models used in other programs could improve SNAP-Ed awareness, participation, and impact. The WIC program uses a model that coordinates both program benefits and education components at the time and place of initial enrollment.

Maine and other states could use a similar, coordinated approach for SNAP-Ed. Additionally, effective public messaging has been used in anti-smoking campaigns to change public attitudes about smoking and to motivate change in behavior through emotional appeals. States could use marketing research to identify messaging strategies that have the greatest potential to encourage better nutritional and physical activity behaviors and increase participation in nutrition education programs. Further, states can use more sophisticated technology and marketing tools to get their messages out to the broader 62

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public. States could also improve program visibility and public awareness by developing more uniform branding and marketing for SNAP-Ed across the states.

Maine and other states can now make use of a broader range of policy tools and approaches to address the problems of hunger, poor nutrition, and obesity.

SNAP-Ed funds may be used to encourage local policies to improve access to healthful foods in schools, workplaces, and other community sites that serve SNAPeligible populations. Efforts to improve the food and fitness environments can also be pursued at multiple levels. Traditional methods for evaluating the success of the SNAP-Ed program have focused on tracking the number of people served rather than measuring positive impacts on nutritional health and fitness. A better approach, however, would be for states to collect data to more closely monitor the effectiveness in attaining program goals. This would allow states to continually reassess how effective their strategies are and to improve the policy tools they are using.

We encourage policymakers to support continued funding of SNAP, SNAP-Ed, and other programs designed to reduce food insecurity while improving nutritional quality of diets, and consequently, health and academic performance. Short-term savings resulting from funding cuts will likely be far less than long-term costs associated with chronic disease and lowered academic achievement. Furthermore, we suggest that policymakers encourage program managers to take full advantage of recent federal rule changes that allow for greater impact through implementation of evidencebased strategies. REFERENCES Behan, Donald, Samuel Cox, Yijia Lin, Jeffrey Pai, Hal Pedersen and Ming Yi. 2010. Obesity and Its Relation to Mortality and Morbidity Costs. Society of Actuaries, Schaumburg, IL. Bogden, James, Martine Brizius and Elizabeth Walker.

2012. Fit, Healthy, and Ready to Learn: A School Health Policy Guide. National Association of School Boards of Education, Arlington, VA. Chenoweth and Associates, Inc. 2006. A Lifestyle We Canâ&#x20AC;&#x2122;t Afford: How Physical Inactivity and Excess Weight are Costing Maine Billions of Dollars. Chenowith and Associates, New Bern, NC.

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Coleman-Jensen, Alisha, Mark Nord and Anita Singh. 2013.

Household Food Security in the United States in 2012.

Economic Research Report No. 155. Economic Research Service, U.S. Department of Agriculture, Alexandria, VA. www.ers.usda.gov/publications/err-economic-researchreport/err155.aspx [Accessed Sept. 18, 2013] Cunnyngham, Arene. 2012. Reaching Those in Need: State Supplemental Nutrition Program Participation Rates in 2010. Mathematica Policy Research, Washington, DC. Dean, Stacy, and Dottie Rosenbaum. 2013. SNAP Benefits Will Be Cut for All Participants in November. Center on Budget and Policy Priorities, Washington, DC. www. cbpp.org/cms/index.cfm?fa=view&id=3899 [Accessed October 18, 2013] Ervin, R. Bethene, Brian Kit, Margaret Carroll and Cynthia Ogden. 2012. Consumption of Added Sugar among U.S. Children and Adolescents, 2005–2008. NCHS Data Brief No. 87. National Center for Health Statistics, Centers for Disease Control and Prevention, U.S. Department of Health and Human Services, Washington, DC. www.fns. usda.gov/pd/15SNAPpartPP.htm [Accessed September 18, 2013] Eslami, Esa, Joshua Leftin and Mark Strayer. 2012.

Supplemental Nutrition Assistance Program Participation Rates: Fiscal Year 2010. Food and Nutrition Service, USDA, Alexandria, VA. Frieden, Thomas. 2010. “A Framework for Public Health Action: The Health Impact Pyramid.” American Journal of Public Health 100(4): 590–595.

Gabe, Todd. 2012. Medical Costs of Childhood Obesity in Maine. School of Economics Staff Paper 603, University of Maine, Orono.

Geiss, Linda, Yanfeng Li, Karen Kirtland, Lawrence Barker, Nilka Burrows and Edward Gregg. 2012. “Increasing Prevalence of Diagnosed Diabetes: United States and Puerto Rico, 1995-2010.” Morbidity and Mortality Weekly Report 61(45): 918–921.

Health Impact Project. 2013. Health Impact Assessment of Proposed Changes to the Supplemental Nutrition Assistance Program. Robert Wood Johnson Foundation and Pew Charitable Trusts, Washington, DC. www. healthimpactproject.org/resources/body/Health-ImpactProject-Farm-Bill-SNAP-white-paper-07-30-13.pdf [Accessed September 30, 2013]

Rausch, Rita. 2013. “Nutrition and Academic Performance in School-Age Children: The Relation to Obesity and Food Insufficiency.” Journal of Nutrition and Food Science 3(2): 190. doi:10.4172/2155-9600.1000190

Alan Majka is an associate extension professor at the University of Maine Cooperative Extension.

He is a registered dietitian who has worked throughout his career to address chronic disease prevention and care, as well as food insecurity, particularly in underserved populations including Native Americans in Maine and migrant farmworkers in Florida.

Janet Fairman is an associate research professor in the Center for Research and Evaluation, University of Maine. She has a master’s degree in public policy and a doctorate in educational policy. Her expertise includes research design, program evaluation, and education research.

Kate Yerxa is a registered dietitian and assistant extension professor at the University of Maine Cooperative Extension.

She works on childhood obesity prevention and community nutrition education with the goal of chronic disease prevention. Her research focuses on quality of life of participants and paraprofessionals in Expanded Food and Nutrition Education Program (EFNEP).

Holben, David H. 2010 “Position of the American Dietetic Association: Food Insecurity in the United States.”

Journal of the American Dietetic Association 110(9): 1368–1377.

Nord, Mark, Margaret Andrews and Steven Carlson. 2009.

Household Food Security in the United States, 2008.

Economic Research Report No. 83. Economic Research Service, U.S. Department of Agriculture, Washington, DC.

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Ripples from the East Coast Stream: Contributions from Migrant Hispanic Workers to Maine’s Wild Blueberry Industry

by Vaishali Mamgain

Maine’s blueberry harvest relies heavily on Hispanic migrant labor. Vaishali Mamgain uses interviews with Hispanic migrant workers and Maine blueberry growers to illustrate the contribution of this generally “unseen” group to Maine’s economy as workers and consumers. Given Maine’s aging population and the changing demographics of the blueberry-harvesting workforce, these workers are extremely important to the industry: without them, employers say, the wild blueberry industry would not be competitive. Mamgain concludes by discussing state and federal laws and policies in terms of their potential impact on Hispanic migrant workers.

INTRODUCTION

M

igrant Hispanic workers play an important role in U.S. agriculture. They are particularly important in harvesting fruits and vegetables across the U.S., taking low-wage jobs that U.S. citizens often do not want. These migrant workers form three major movements: the West, the Midwest and the East Coast streams. The East Coast stream, which originates in Florida and works its way up the eastern states, harvests a wide variety of crops as it flows. In Maine, which has recently become the final stopping point for the East Coast stream, migrant workers play a vital role in the low bush wild blueberry industry. By closely examining this role, we can see important broader economic and national policy implications. These findings can inform federal and state policy on immigration issues.

The work force involved in Maine’s wild blueberry industry has changed dramatically in recent years, with Hispanic migrant workers now contributing significantly to the annual harvest. During the 2011 (July– August) wild blueberry harvest in Washington County, we interviewed 46 migrant workers, along with blueberry growers and social service providers. This research, the first of its kind for this state, reveals the importance of these workers to the industry and their economic impact on the state of Maine as both producers and consumers.

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According to the latest Census figures, Maine’s population is the oldest in the nation. This is a problem for the state as a whole and for Maine’s agriculture in particular. With 8,136 farms covering 1.34 million acres and producing $617 million in annual sales (and a total annual impact estimated at $1.2 billion), agriculture and related activities are a significant part of the Maine economy (USDA 2007). Wild blueberries are grown on approximately 60,000 acres in Maine. The direct and indirect economic impact of Maine’s blueberry crop was $250 million in 2007, making it a major contributor to Maine’s economy (umaine.edu/blueberries). It is sobering to note that in Aroostook and Washington counties, still major agricultural regions, one-third of the population is over 65 years old. How, then, can Maine meet its labor needs?

With respect to agricultural work and in particular the harvest of blueberry, potato, and broccoli crops, migrant workers play an important role.

The East Coast migrant stream originates in Florida, where migrant workers pick strawberries, cucumbers, and oranges. They then move to Georgia to pick peaches and pecans, to North Carolina to harvest sweet potatoes, yams, and tobacco, and to New Jersey to pick high-bush blueberries. Finally, they come to Maine for the wild blueberry harvest. They may stay for the apple harvest, or be employed to make Christmas wreaths (Perez-Febles, personal communication).

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HISPANIC MIGRANT WORKERS IN MAINE’S BLUEBERRY INDUSTRY

Nationally, the migrant population of agricultural workers is diverse but is mostly non-white. According to the National Center for Farmworker Health’s web site, 83 percent are Hispanic, and there are people of Jamaican, Thai, Laotian, and Haitian origin. Most of them are male (79 percent) and although they range in age from 13 to 65, the average migrant worker is 36 years old.1 The demographic composition of Maine’s blueberry-harvesting workforce has changed dramatically in the past decade. Wild blueberries had been picked by local (white) families and by Native American peoples (Passamaquoddy and Mi’kmaq), for whom this was an annual ritual and celebration. Those rakers have largely been replaced by a crew of “professional” Hispanic migrant workers.

Despite their importance to the agricultural industry, Hispanic farmworkers are almost invisible to many in Maine’s population of 1.3 million. As in other states, Maine’s farms tend to be spatially separated from population centers, and workers are housed close to the fields they harvest. Blueberries, for instance, are grown in Downeast Maine, the state’s easternmost counties, approximately four hours north of the more populated areas of southern Maine. Also, Hispanic farmworkers have only recently become a regular presence in Maine (starting in late 1990s). Given this, most of Maine’s population would find it difficult to imagine that the state’s agriculture is so dependent on this ethnic minority.

The study reported here quantifies the productivity and earnings of this population in various jobs over the course of one year of migrant work. It documents the crucial role Hispanic migrants play in the Maine economy, both directly, by harvesting and processing the wild blueberry crop, and indirectly, through their activities as consumers while in Maine. As economists Card (2000) and Peri (2010) measured the effect of immigrant workers in an economy, showing the ripple effects that must be taken into account. Several previous studies in other states found that migrant workers spend nearly half (or in some cases, more than half ) of their income in-state when they work in these states (e.g., Slesinger and Deller 2003; Rosenbaum 2002). Working in Maine for a month, the migrant Hispanic farmworkers spend money on food, gas, and telephone service, and in some cases, pay for housing. Most of them also support family in their country of origin.

METHODOLOGY

I

interviewed Hispanic workers (rakers, mechanical harvester operators, and packers), and employers in Maine’s blueberry industry to assess economic contributions by migrant workers. I asked workers a specific set of questions and also recorded and transcribed open-ended comments in one-on-one interviews with each participant. The subjects were recruited on-site at the blueberry harvest camps. Participation was entirely voluntary and no compensation was awarded. I interviewed a total of 46 migrant workers: one person from El Salvador, one from Panama, three from Puerto Rico, three from Honduras, one from Guatemala, and 37 from Mexico.

Within Mexico, Michoacan was the most represented region. The translator was from Michoacan, so perhaps people from his region were more willing to talk; or more likely, Michoacan was so well represented because the Hispanic population in a nearby Maine town has a significant presence from Michoacan (Mamgain 2011).

Despite their importance to the agricultural industry, Hispanic farmworkers are almost invisible to many in Maine’s population of 1.3 million.

I also interviewed two of the three main blueberry growers, professionals from Maine Migrant Health, Maine Migrant Education program, and the state monitor advocate, to get a more complete picture. As with workers, I asked specific questions of all the employers and open-ended comments were recorded and transcribed.

RESULTS

T

hese interviews revealed much about the migrant workers and their impact on Maine’s economy: their roles and productivity in the Maine blueberry harvest, their income and expenditures. Responses provided data about demographic composition; migration patterns and other employment, including contributions to harvests of other crops along the East Coast stream; and their

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history working in the U.S. The interviews also elucidated much about the lives of the workers: their work ethic and attitude towards the job, their family structures, aspirations for their children, relationships with family and friends, and how they use information technology to communicate. This paper focuses on their role and economic impact; for findings about their work ethic, family lives, beliefs, and aspirations, see Mamgain (2012).

The median age of the workers interviewed was 32 years, consistent with National Center for Farmworker Health’s data. Five of the six people who were under 20 were full-time residents in the U.S., but qualify as migrant workers under the Migrant Health definition (US Code, Title 42) because they travel to multiple states for agricultural work. Moreover, four of these went to school during the school year and only picked during the summer months. Of the 46 workers interviewed, only five were women (ages 23–49). Although this workforce is no doubt (increasingly) male, female workers may also be underrepresented because they were less willing to be interviewed (one woman approached by the author demurred and asked that her husband be interviewed instead).

Workers were not asked whether they had valid documentation to live and work in the U.S., but were asked how often they returned to their country of origin.

Of the 46 interviewed, the five who were U.S. residents and the three from Puerto Rico had no problem with legal status. Of the remaining 38, 18 workers said they spent more than a month in their country of origin every year. Given the increased difficulty in crossing the border without papers, and the fact that this study was conducted in 2011, when increased raids by the Immigration and Customs Enforcement (ICE) had employers wary of hiring undocumented immigrants, we can surmise that these workers had legal papers that allowed them to come and go freely. The workers reported they had to present two proofs of identification and that employers confirmed their legal status using E-Verify (an online program operated by U.S. Citizenship and Immigration Services that allows employers to check an employee’s eligibility based on matching records from government databases). Thus, it seems plausible that, in 2011, most if not all migrant workers in Maine were properly documented.

Migration Patterns and Other Employment

It is striking both how much these workers travel for employment, and how many crops they harvest.

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Their work involved harvesting not just blueberries in Maine, but also blueberries in New Jersey, North Carolina, Florida, grapes and apples in New York and Pennsylvania, peaches in Virginia and Georgia, onions in Georgia, celery, tomatoes, grapefruits, and oranges in Florida. Many also make Christmas wreaths in North Carolina.

Their most commonly observed migration pattern includes picking oranges in Florida in the spring, highbush (cultivated) blueberries in New Jersey in July, and wild blueberries in Maine in August.

Table 1:

Seasonal Work Pattern

Crop

Interviewees Who Harvested

Maine lowbush blueberries

46

New Jersey highbush blueberries

22

Florida oranges

19

Apples (ME, NY, NJ, PA, VA, MI)

13

North Carolina highbush blueberries

6

New York grapes

5

Florida highbush blueberries

4

Within this basic pattern, however, there were variations. Thirteen of the workers picked apples in six different states (including Maine). Although most of them travelled along the East Coast, there were some who traveled to Michigan to pick high-bush blueberries or apples primarily because they had brothers who were harvesting there. Among the other states and crops mentioned were sweet potatoes in Louisiana, Christmas wreaths in Maine and North Carolina, and watermelons in Missouri.

Workers who are in school or college typically pick one or two crops a year. They frequently choose to harvest blueberries in New Jersey in July and wild blueberries in Maine in August since these harvests occur during summer vacation. Similarly, several women mentioned that they did not move during the school year because they did not want to interrupt their children’s education. In between their travels, many of the workers return to their country of origin. Twenty-eight of the 43 non-Puerto Ricans go back to their country of origin regularly.

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HISPANIC MIGRANT WORKERS IN MAINE’S BLUEBERRY INDUSTRY Figure 1: Income Distribution for Blueberry Rakers

Roles in Maine’s Blueberry Harvest Maine is the world’s largest producer of wild blueberries, and although individual growers do not reveal actual production statistics, one can surmise the volume of blueberries by looking at the area under cultivation. Larson (2005) estimates that it took approximately 302,000 hours to harvest the blueberries in Washington County. The University of Maine Cooperative Extension’s Wild Blueberry Crop Statistics web page shows an approximately fourfold increase in blueberry production in the last 30 years (from an average of 23 million pounds per year over the five years from 1978 to 1982 to an annual average of 86 million pounds for the 2008–2012 period).2 Migrant workers play several roles in the harvest of this crop. Some work on the barrens, either raking or driving mechanical harvesters, and others pack in the processing plants. The workers interviewed included 35 rakers, seven packers, and four who drove mechanical harvesters.

8 7

Numbers of Workers

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Number of Years in the U.S. The age when an individual moved to the U.S. and when he or she started doing agricultural work are highly correlated (see Mamgain 2012, for more details). Many of the younger people who came here with migrant parents continue their parents’ tradition, but have aspirations to pursue other careers.

Many in this work force are relative newcomers to the Maine harvest though they have done other agricultural work in the U.S. for much longer. Nearly half have worked for fewer than three years in Maine although they have more than nine years of experience doing agricultural work elsewhere in the U.S. Of the three who had been in the U.S. fewer than three years, two were legal residents and had come to the U.S. specifically for Maine’s blueberry harvest. This finding may support the observation by Massey (2011) that the rate of undocumented migration to the U.S. from Mexico dropped to zero in 2008 (emphasis added). Massey attributes this to stricter enforcement of immigration laws, a shrinking economy, and the increased danger in being smuggled across the border. The Pew Hispanic Center (2011) also reported that the number of Mexicans leaving for the U.S. between 2006 and 2010 declined by 60 percent. In a subsequent section, we will discuss the ramifications of this drop-off.

Productivity and Earnings According to our survey, the median raker filled between 60 and 70 bins per day during the blueberry harvest. Each bin contains 23.5 pounds of berries, and rakers receive $2.25/bin. Based on this information, the median income earned per day by rakers was $146.25.

The five people who raked more than 120 bins a day earned $300/day or more. Low numbers reflect women with children who did not rake full time because they had to care for their children, and one who had suffered a miscarriage in the fields and by doctor’s orders, was not raking anymore.

The 2011 harvest was unusually long and productive, lasting between five and six weeks; rakers also reported harvesting better berries than usual. But, as the Wild Blueberry Crop Statistics web site shows, these numbers can be cyclical: a bumper crop can be followed by a dismal year. For example, an 80-million-pound harvest in 2004 was followed by a 46-million-pound harvest in 2005.

The income distribution for rakers is shown in Figure 1, based on 25 days of raking. About 50 percent of our sample made more than $4,000 in the 2011 blueberry harvest. Their work day started as early as 5 a.m. and ended between 5 and 6 p.m. Respondents who worked at the packing plant had incomes that ranged from $1,900 to $3,500. Most workers were paid the same hourly rate, so differences between their incomes reflect differences in the numbers of hours worked.

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Total Annual Earnings and Comparison to Other Work

The sample surveyed varied widely, from college-age students who only worked during the summers, to women who worked a few hours a day, to the professional agricultural workers who worked three or more jobs. The annual median earnings were $16,000 for an individual, and the range was from $2,500 or less to $35,000. Full-time workers had annual median earnings of between $20,000 and $22,500.

A comparison of the daily earnings (Table 2) shows that the Maine blueberry harvest provides the highest daily rate of earnings—higher than the highbush blueberry harvest in New Jersey, North Carolina, or Florida, and higher than harvesting apples, grapes, oranges, or doing landscaping and other jobs. Their migrant work was the primary income-earning activity for the workers interviewed. Only three of those interviewed did any agricultural work in their country of origin (Mexico).

Table 2:

Comparison of Daily Earnings in Different Crops

Crops

Number of Median Average People in Earnings Earnings Sample

Maine lowbush blueberries

$158

$162

46

New Jersey blueberries

$114

$119

23

Apples

$128

$119

14

Landscaping/ other jobs

$90

$93

10

Grapes

$73

$80

5

Florida oranges

$68

$74

18

North Carolina blueberries

$75

$55

5

$107

$113

4

Florida blueberries

Migrant Worker Contributions to Maine’s Economy

The workers who were interviewed sent some of their earnings home, but also contributed to the Maine economy by paying taxes and spending money on food, gas, rent (in some cases), and cell phones. Their (median) monthly expenditures of $500 on food, $180 on gas, 68

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$50 on telephone service and miscellaneous expenses are a significant contribution to the economies of the small rural towns in which they work. Moreover, they contribute to state and federal income taxes, including social security.

Food Respondents said they spent a considerable amount of money on food during the Maine harvest. Their median expenditure on food during the approximately month-long harvest was $500 per person, nearly twice what they spent per month in their “home” state when they were not on the move. Because the nearest supermarkets are so far away, few prepared food themselves.

Most workers bought food from the canteens selling Mexican food, set up by local families, and beverages from local convenience stores. Many reported having to spend a lot on bottled water, since there was no source of drinking water in the fields or the camps. If one assumes that there were 500 Hispanic workers (a conservative number) at the month-long 2011 blueberry harvest, they spent an estimated $285,300 on food alone. This expenditure on food also generated taxes (see following section on taxes).

Gasoline The workers also spent money on gasoline, both to get to Maine and on their travels while working within the state. They reported spending from $25 to $4,000 (the latter figure is the cost of driving from Mexico to Maine). While working in Maine, the median amount of money spent on gas per month was $180. Of the 46 workers interviewed, the total expenditure for gasoline (including travel to and within Maine) was nearly $11,500. Projected for an estimated 500 workers, this suggests a total gasoline expenditure of more than $143,000, although our data do not separate out how much of this was spent at Maine gas stations vs stations outside of Maine.

Telephones Most workers (>70%) had a standard $50/month phone plan, and only two did not have a phone or share a phone with a friend. Although the $50/month plan was most common, some of the workers spent more than $100/month on cell phone plans. Money spent on cell phone service did not contribute directly to the local economy, but did so indirectly though state taxes and fees on telecommunications services.

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Housing: Rent and Home Ownership The three largest blueberry growers in Maine provide on-site, free-of-charge housing to their workers.

One of the largest growers said it cost $120,000 per year to maintain the housing camps (Lindquist, personal communication). Smaller growers, who own more than 50 percent of the land under blueberry cultivation, do not provide housing. Workers who rake for the smaller growers typically pay rent in nearby towns. The workers interviewed for this study all worked for the largest growers, so this report does not include any data on rent paid in Maine.

Almost all of the workers, however, either had a mortgage payment or paid rent in some other state.

Twenty-one workers paid rent in the U.S. (median: $240/month), the majority of them in Florida, but others in Texas, Maryland, Pennsylvania, New York, Missouri, and Virginia. Eleven owned their own homes (five in their country of origin, the other six in Texas or Florida).

Taxes All workers in this survey paid state and federal income taxes (deducted at source). Since most bought food rather than preparing it, they also paid the applicable Maine state tax (7 percent) for these purchases.

Assuming that $250,000 of the total $285,300 expended on food was on “prepared foods,” food purchases by migrant workers generated $17,500 in state tax revenue in a month. They also paid taxes on any non-food items purchased in Maine.

Savings and Remittances Thirty-nine of the 46 workers in our sample sent money home regularly (this includes the younger crew, who contributed to the family even though their families were now settled in the U.S.), and two of the others sent money home occasionally. The average remittance was $4,920 and the median was $4,000. Twenty-five percent of the workers sent $7,000 or more home annually.

Conclusions from Surveys As previously noted, over the past two decades, the increase in the number of Hispanic workers raking blueberries in Maine has been dramatic. Although it is the most distant point of the East Coast Stream, one can see why so many of the workers come to Maine: their earnings are significantly higher than in any other agricultural job. As one of the rakers put it, raking Maine

blueberries is the highest-paying job there is for agricultural workers. Although the work is hard, most of the workers say they enjoy it, and driven by a strong work ethic, use their earnings to support their families, send money back home, and pay their living expenses.

IMPLICATIONS FOR THE INDUSTRY

I

nterviews with employers discussed the evolution of the workforce and whether mechanization could replace Hispanic rakers.

Importance to Employers The three major growers are Wyman’s, Cherryfield Foods, and North Eastern Blueberry Company (NEBCO). Small growers/leaseholders control or harvest more than 50 percent of the land, yet, the industry is dominated by the three major growers who have a strong influence on the production and price of blueberries. This study focused on the crews that worked for the three major employers. NEBCO is owned by the Passamoquoddy tribe and employs mainly native rakers (from the Passamaquoddy and Mi’kmaq tribes) although there are some Hispanic rakers in the native camps.

[migrant workers] use their earning to support their families, send money back home, and pay their living expenses.

Employers at Wyman’s and Cherryfield Foods started hiring Hispanic workers in the mid-1990s.

Asked why they stopped hiring the local Maine workforce, employers explained that the younger generation of local Mainers did not want to do agricultural work.

One employer said, “Local labor no longer wanted to participate; they didn’t like how intensive the labor was in our industry. Work ethics have changed from generation to generation.”

Thus, the drop-off in migration described previously, particularly by younger workers, is of concern to the blueberry growers in Maine, who can see how it will affect production. When I asked a grower what he

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would do if the “Mexicans” stopped coming, he gave a wry laugh and said, “Boy, that would be something. I guess I’d just stop commercial production and run a farm-stand.” A human resources manager at another plant said, “God forbid! We would have to shut down— our jobs depend on their labor.” Another employer, when asked what they would do if no migrant labor came to Maine, responded, “If we didn’t have the influx of migrant labor we simply wouldn’t get the job done.”

This mirrors what has been found in many other states. In Wisconsin, when asked what they would do without migrant labor, growers said they would close their businesses (40 percent), go into another line of work or sell their land/equipment (28 percent), mechanize to reduce hand labor (35 percent), or retire (12 percent) (Slesinger and Deller 2003). In Virginia, tobacco, apple, and other fruit and vegetable growers estimated that without migrant and seasonal farm workers production would decrease drastically, from 7 percent (nursery) to 85 percent (tobacco) to 90 percent (apples, other fruits) to 100 percent (vegetables) (Trupo, Alwang and Lamie 1998).

Mechanization Can migrant labor be replaced by mechanization?

There has been a sharp decline in the number of handraking crews at both Cherryfield’s and Wyman’s. This may have been precipitated by labor troubles at Wyman’s in 1998 and 1999 (Fritzsche 2003). Wyman’s reduced the number of hand-raking crews from 17 in the late 1990s to five in 2011. At present, 30 percent of the total berries at Wyman’s are harvested by hand rakers (Lindquist, personal communication). Cherryfield Foods, which used to have many hand-raking crews, was down to one hand-raking crew this year.

One of the other growers, when asked whether he would continue to mechanize, said that he believed the company had reached an equilibrium situation (Lindquist, personal communication). Since 15 percent of their land could not be harvested mechanically (either due to the terrain or irrigation systems that might interfere with the harvesters), the company would continue to have a certain number of hand-raking crews. This 15 percent of their land yields 30 percent of the total berries harvested.

Although it might be assumed that the trend toward mechanization will reduce the need for migrant labor, it does not completely eliminate it, as companies also use migrant labor to run the mechanical harvesters.

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However, these workers are mainly from Canada, rather than part of the East Coast Stream of Hispanic workers.

It is a matter of speculation whether in the future more Hispanic migrant workers will transfer to harvesting with machines rather than hand raking. Migrant labor will also be needed to harvest blueberries for smaller growers, who constitute more than 50 percent of the acreage under blueberry cultivation, and are less likely to mechanize. To harvest blueberries mechanically, growers have to spend a considerable amount of money to remove boulders from the barrens and level the land.

Most smaller growers do not have the capital to do so.

Additionally, since 99.5 percent of the wild blueberry crop is either frozen or canned (Yarborough 2004), the processing plants also rely heavily on migrant labor.

IMPORTANCE TO MAINE

O

ur research reveals the importance of migrant Hispanic agricultural workers to the state of Maine.

Clearly, it is in Maine’s interest to be supportive of these workers, as they are essential to Maine’s wild blueberry harvest, and they are an important resource to a state whose population is aging. Based on interviews with the employers, it seems likely that Maine’s wild blueberry industry would be crippled without these workers since they are an integral part of both the harvest (especially for smaller growers) and processing. The ripples from the stream of Hispanic migrant workers are also important to Maine: the workers contribute money to Maine’s economy through expenditures on food, gasoline, phones, housing, and taxes while they are here.

Alan Caron, in an editorial in the Portland Press Herald (May 29, 2013) argues that Maine needs skilled immigrants. My research shows that Maine also needs unskilled immigrants although one could argue that the term “unskilled” is inadequate. The definition of “skilled” under the Immigration and Naturalization Agency (now ICE) essentially means any job that requires more than two years of training (Stickney, personal communication). Thus, despite these workers’ incredible productivity and professionalism, they are referred to as unskilled.

POLICY IMPLICATIONS Federal Policy As events in the last few years have shown, federal laws and policy can do a great deal to either facilitate or

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impede the migrant worker flow and their contribution to Maine’s blueberry harvest. Since the bigger employers in Maine’s blueberry industry have started using the E-Verify system to comply with ICE, there has been speculation that this might deter people from coming to rake. The immigration reform currently being advocated by the Senate does include a provision for employers to continue using E-Verify—a system that may lead to major privacy issues. However, if the 11 million undocumented workers can apply to normalize their status, they ought to be able to work as their paperwork is processed.

In a historic 68-32 vote June 27, 2013, the U.S. Senate voted to address comprehensive immigration reform. Among the proposals is a policy to grant amnesty to the 11 million undocumented workers— many of whom live in constant fear of deportation or harassment and yet are crucial to certain sectors in the economy. Although the path to citizenship for these workers will not be quick, easy, or inexpensive, it provides them a chance to come out of the shadows and join the mainstream economy. This increase in the number of workers who can participate in the labor force without fearing for their or their family’s safety has clear benefits for the economy. The bill also gives faster citizenship to farm workers, which may be crucial for a state such as Maine. In order to be signed into law by President Obama, the Senate’s comprehensive immigration reform will first need to be passed by the House of Representatives, where House Speaker John Boehner has not expressed support.

State Policy Like federal policy, state laws and policies can encourage or discourage the flow of migrant agricultural workers. We need only look to examples of recent laws in states such as Georgia, Arizona, and Alabama to see how detrimental the effects of state law can be.

Georgia’s stringent anti-immigration law, passed in 2011, resulted in losses to agriculture estimated at somewhere between $300 million and $1 billion (Baxter 2011). These losses have been compounded by the multiplier effect of agriculture on other parts of Georgia’s economy, such as processing and transportation.

Georgia’s experience serves as a good example of the impact that a law that impedes migrant labor can have on a state’s economy. Testifying before the Senate Judiciary Committee’s Subcommittee on Immigration, Refugees and Border Security, Georgia’s Agricultural Commissioner Gary Black advocated a guest worker

program to address Georgia’s labor shortage. According to Jim Galloway’s Political Insider Blog on the Atlanta Journal-Constitution web site, Black was quoted as saying “E-Verify is a real problem without fixing the guest worker program.”

State laws such as those enacted recently in Arizona and Alabama can serve to make migrant workers feel unwelcome. As a companion study reveals (Mamgain 2012), migrant workers’ social network allows word to spread quickly about policies and behaviors perceived as harassment, intimidation, or otherwise unwelcoming.

Like federal policy, state laws and policies can encourage or discourage the flow of migrant agricultural workers.

Beth Stickney, former executive director and founder of the Immigrant Legal Advocacy Project (ILAP), a nonprofit group in Maine whose mission is to provide legal assistance on immigration issues for lowincome Mainers, observes that some policies in Maine can be perceived as unwelcoming. ILAP was aware of several immigrant doctors who “have had a terrible time getting or renewing their driver licenses while their applications…for H-1B extensions or for LPR status were pending—making it hard for them to live [and] work here—and then they tell their immigrant friends about the hard time they are having, making those friends look at going to other states.” Stickney reports that ILAP has “data on hundreds of police stops of immigrants of color that appear to be ‘driving while brown’ situations…being questioned by police and asked for papers when sitting on a bench…being stopped and questioned by police while walking down the sidewalk.... Word gets around about that kind of activity by police and people will say ‘why should we go to/stay in Maine, where we’re going to get harassed by police because of our color?’” (Stickney, personal communication).

Though state laws cannot ease the visa process, since visa processes are a federal matter, Maine can avoid the kind of anti-immigration laws that have been enacted by Georgia, Arizona, and Alabama. Furthermore, as

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Stickney suggests, “Maine can restore access to driver licenses and prohibit state law enforcement officers from inquiring about immigration status.” In May 2011, the Maine State Legislature voted to defeat LD 1496: “An Act to Enforce Immigration Laws and Restrict Benefits to Legal Citizens”—an Arizona-style immigration bill that would have required local and state officials to enquire about immigration status. At the last minute, the bill’s sponsor, Rep. Kathy Chase, killed the bill requesting that the legislature vote “ought not to pass.”

It was speculated that her change in position was in part the result of pressure from the hospitality industry in her constituency.

Role of Nongovernmental Organizations Nongovernmental organizations (NGOs) are already involved in supporting migrant farm workers in Maine. The Maine Migrant Education Program helps out-of-school youths who are younger than 21 get their high school diplomas. The program also organizes Harvest School, a three- to four-week educational program for young children of migrant workers. Maine Migrant Health, another federally funded organization, helps provide health care for any worker who qualifies as a migrant. This program spends $700,000 per year on health care for all migrant workers (of which blueberry rakers are a small segment) in the state.

Both these NGOs face the challenge of a lack of continuity in working with the blueberry rakers who are in Maine for only a limited time. For example, Maine Migrant Health cannot follow up on care for a migrant worker who has diabetes the way a local provider can with a year-round Maine resident. Yet, these organizations play important roles and seem to understand the unique challenges of migrant workers who come to Maine. In light of the value of migrant farm workers to Maine, both NGOs deserve our support.

Federal Policy Recommendations Federal laws and policies should be based on knowledge about the roles of migrant workers and on a deeper understanding of their lives and aspirations. For example, from an employer’s point of view, it is important that workers be able to freely move from state to state, as they are crucial to each employer within a specific window of time in the growing season. It is also important to note that many of these workers spend a portion of the year in their home country with their extended families. Most of them plan on retiring to 72

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their country of origin. Any immigration legislation should pay heed to this flow of workers from one crop/ one state/one employer to another.

An understanding of the work life of migrant workers reveals why a bill introduced to Congress by Rep. Lamar Smith of Texas in 2011 would have been ineffective had it passed. This bill, an overhaul of the current H-2A program, would have allowed a half million guest workers in to the country, but would have tied guest workers to a specific employer. As our study has shown, migrant workers depend on working for a series of employers, harvesting different crops sequentially in several states. Rep. Smith’s bill would have made this impossible. Because there is not a sufficient quantity and duration of employment in any one of these harvests, we would predict that such a bill such would cripple many of the harvests that depend on migrant workers. As the furthest tip in the Eastern Stream (and the most distant travel for many of the workers), the Maine blueberry harvest would certainly have felt the negative effects of this law. Congress should instead consider a guest-worker program that would allow workers to travel easily between states, work for different employers for each harvest, and easily return back to their country of origin when they wish.

Our examination of the aspirations of migrant Hispanic blueberry workers reveals the positive incentive that would be provided by the DREAM (Development, Relief, and Education for Alien Minors) Act, first introduced in 2001 and reintroduced in 2011.

“DREAMers” are young undocumented workers who were brought to the U.S. by their parents. In May 2012, President Obama eased up on the government’s policy of deporting the DREAMers and announced the reprieve program that deferred deportation for two years, although there was no provision of legal status. More than 300,000 young people applied for this program, even though by “outing” themselves, they exposed their parents and older siblings who were not covered under the deferred deportation program.

CONCLUSION

O

ur study highlights the many different crops in different states that are harvested by Hispanic workers of the East Coast Stream. By stringing together all these jobs, these workers can make a living and support their families. For this to be viable, work must available on crop after crop in these different states. If

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mechanization, crop failure, or onerous state laws and policies eliminated some of this work, could the viability of the entire stream be compromised? Or, if federal law becomes so restrictive that new workers do not join the East Coast stream as current workers age and retire, what will become of the agricultural industries that depend on the East Coast Stream of migrant workers to harvest their crops? ACKNOWLEDGEMENTS I would like to thank Nat Lindquist, Darrin Hammond, David Yeats, and David Stess for taking the time to talk with me.

Juan Perez-Febles, Barbara Ginley, Ian Yaffe, Julia Trujillo Luengo, and Edith Flores provided invaluable help with this study. I would also like to thank Mano en Mano for its financial assistance in translation.

ENDNOTES 1. www.ncfh.org/?pid=4&page=3 2. umaine.edu/blueberries/factsheets/statistics-2/statistics

REFERENCES Baxter, Tom. 2011. How Georgia’s Anti-Immigration Law Could Hurt the State’s (and the Nation’s) Economy.

Center for American Progress, Washington DC. www.americanprogress.org/issues/2011/10/georgia_ immigration.html [Accessed October 5, 2011]

Pew Hispanic Center. 2011. The Mexican-American Boom: Births Overtake Immigration. Pew Hispanic Center, Washington, DC. pewhispanic.org/files/reports/144.pdf [Accessed September 23, 2013] Peri, Giovanni. 2010. “The Effects of Immigrants on US Employment and Productivity.” Federal Reserve Bank of San Francisco: Economic Letter. www.frbsf.org/ publications/economics/letter/2010/el2010-26.html [Accessed September 23, 2013] Rosenbaum, René Pérez. 2002. Migrant and Seasonal Farmworkers in Michigan: From Dialogue to Action.

Julian Samora Research Institute Working Paper #39.

Michigan State University, East Lansing.

Slesinger, Doris P. and Steven Deller. 2003. Economic Impact of Migrant Workers on Wisconsin’s Economy.

Center for Demography and Ecology Working Paper No. 2002-06. University of Wisconsin-Madison.

Trupo, Paul, Jeffrey Roger Alwang and R. David Lamie. 1998.

The Economic Impact of Migrant, Seasonal, and H-2a Farmworkers on the Virginia Economy. Virginia Tech, Rural Economic Analysis Program (REAP), Blacksburg, VA. ideas.repec.org/s/ags/vpturp.html [Accessed October 2, 2011] USDA 2007. Census of Agriculture—State Profile: Maine. (2007) USDA, www.agcensus.usda.gov/ Publications/2007/Online_Highlights/County_Profiles/ Maine/cp99023.pdf [Accessed September 23, 2013] Yarborough, David. 2004. Lowbush Blueberry Production Trends. Presented at the 2004 Great Lakes Expo in Grand Rapids, MI.

Card, David. 2000. “Is the New Immigration Really so Bad?” Economic Journal 115:F330–F323.

Fritzsche, T. 2003. Agribusiness, Labor, and Resistance– Latinos, North American Indians and Whites in Maine’s Blueberry Harvest, 1970–2002. Senior Thesis, Amherst College, Amherst, MA. Larson, Anne. 2005. Enumeration of Vegetable and Orchard Temporary Workers and Work Hours in Maine: Final Report. New York Center for Agricultural Medicine and Health, Cooperstown, NY. Mamgain, Vaishali. 2011. Ethnic Place Making: Hispanics in Downeast Maine. Department of Economics Working Paper. University of Southern Maine, Portland.

Mamgain, Vaishali. 2012. Work Ethic, Family Life, and Aspirations of Hispanic Migrant Workers in Maine’s Wild Blueberry Industry. Department of Economics Working Paper. University of Southern Maine, Portland.

Vaishali Mamgain is chair and associate professor in the Department of Economics at the University of Southern Maine. Her research interests include immigrant issues, contemplative pedagogy, and behavioral economics.

Previous published work has examined the impact of Asian immigrants in Maine and the integration of refugees from Vietnam, Cambodia, Somalia, Sudan, and Eastern Europe in Maine’s labor market.

Massey, Douglas. 2011. It’s Time for Immigration Reform. http://globalpublicsquare.blogs.cnn. com/2011/07/07/its-time-for-immigration-reform/ [Accessed September 23, 2013]

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COMMENTARY: MAINE CHARTER SCHOOLS

C O M M E N T A R Y

On Maine’s First Charter Schools: Promises and Pitfalls

by Sarah Butler Jessen

I

n September 2012, the landscape of education in Maine quietly shifted with the opening of the state’s first two charter schools. While the Cornville Regional Charter School in Cornville and the Maine Academy of Natural Science at Good WillHinckley in Hinckley enrolled just 106 students in their first days, they represent the first wave of a burgeoning educational movement set into motion by Governor Paul LePage and the Maine Association for Charter Schools, whose plans outline the opening of as many as 10 charter schools in the next 10 years in Maine (Barber 2012).

In the fall of 2013, three more charter schools joined the original two: Harpswell Coastal Academy in Harpswell, Baxter Academy for Technology and Science in Portland, and the Fiddlehead School of Arts and Science in Gray. Nationwide, the charter schools reform movement has been debated on numerous fronts—as part of a larger school-choice debate, as an experiment with increased autonomy within the public educational sector, and on an organization front, as small learning communities. These debates are underpinned by the question of whether charter schools produce better results in student performance. Opinions of charter schools and results of research on their performance are as varied as charter schools themselves, however. Thus, while Maine moves forward into this new educational realm, questions need to be raised about what the implementation of charter schools might mean for the state.

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the schools within their political and historical contexts. Though charter schools are new to Maine, they have been a part of the national educational policy landscape for more than two decades.

The first charter schools opened in Minnesota in 1991. Since then, charters have expanded rapidly to more than 40 states. In recent years, charter schools have seen increased support at the federal and state levels. Federal competitive grants such as Race to the Top (RttT) provide incentives for states to increase educational options and enact school “turnaround” reforms through the introduction of charter schools. In part because of this increased support, more than one-quarter of charter schools nationwide have been opened in the last few years, according to the National Alliance for Public Charter Schools’ website (dashboard.publiccharters.org/ dashboard/home). The number of charter schools varies between states, largely because state laws regulate charter schools.

Twenty-six states have caps on the num ber of charter schools that can be in operation. Other states allow a proliferation of charter schools. For example, since Hurricane Katrina in 2005, New Orleans has developed a system of schools that consists almost entirely of charters.

According to a report released from Tulane University in 2012, charter schools now make up 75 percent of the public institutions in the district, serving 78 percent of students (Cowen Institute 2012).

Despite their increasing prevalence, there is persistent confusion about the

organizational and operational structures of charter schools. According to the National Center for Education Statistics and the Institute for Education Sciences, a charter school is a publicly funded school under contract, or charter, with the state (U.S. DOE 2013). In exchange for public funding and autonomy of governance, charter schools must meet accountability benchmarks laid out in their charter.

Depending on state laws, charter schools also have control over hiring of teachers and staff, which allows them to employ uncertified teachers.

Unlike traditional public schools, charter schools are schools of “choice,” which means that, with some exceptions, charters admit students who opt-in, usually on a first-come, first-served basis.

When the number of applicants exceeds the number of available seats, they admit students using a lottery. Although, in general, charter schools do not screen applicants based on test scores or grades, entrance into a lottery can sometimes involve submitting paperwork, completing a school tour, or signing parent and student contracts. Yet within the specific admissions guidelines laid out by the school, any student within a catchment area can apply to a charter school, and if accepted, can attend for free, just as with a traditional public school.

Scaffolded by increased programmatic autonomy, charter schools commonly provide a curricular theme, such as science or arts. Structuring the curriculum around a theme also allows for the development of a cohesive school community, ideally increasing buy-in from students, family, and staff. While students still receive a general education, their studies often center around this theme.

According the National Alliance for Public Charter Schools’ website, nearly a third of charter schools are operated by charter management organizations

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C O M M E N T A R Y (CMOs) or educational management organizations (EMOs). CMOs and EMOs create a charter model and replicate it in variety of locations. Well-known CMOs include KIPP (Knowledge Is Power Program) and Achievement First.

Since charter schools have been on the policy scene for a while, a significant body of research has been conducted on their efficacy and the outcomes of their implementation. In general, research findings on charter schools are as diverse as the charter schools themselves. As far as student performance, it seems clear that there are charter schools creating unique and beneficial opportunities for students and reaching high levels of academic success in education. Yet, despite the popularity of charters, the overwhelming body of research has not conclusively shown that charter schools always outperform traditional public schools. For every study or report that finds charter schools outperform traditional schools, another can be found with neutral findings, and still another that says that they underperform traditional schools. A meta-analysis of existing research found that a summative conclusion about the performance of charter schools cannot be drawn from existing studies (Berends et al. 2006).

One reason for the lack of a comprehensive conclusion is that the results of charter studies are often critiqued in replication studies, where differences in student populations are controlled. For example, one of the most famous studies on charter schools concludes that 17 percent of charter schools nationwide outperformed traditional public schools with a similar racial and socioeconomic makeup, 37 percent performed worse, and 46 percent had the same performance outcomes as similar public schools (CREDO 2009a). Following its publication, the findings of this report were

criticized by Stanford economist, Carolyn Hoxby (2009). After several rounds of published reciprocal critiques, Hoxby’s assertion was refuted by CREDO (2009b).

In addition, research has examined the introduction of markets in the public educational sector and enrollment patterns in charter schools. In the last decades it has been increasingly popular in educational policy to introduce outputsdriven, private-sector ideals in public education. Introducing charter schools as a way to invite market competition in education is one outcome of this trend.

Yet, research has raised concerns about the efficacy of such reforms in the public sector. While supporters of market theory would argue that competition is a positive side effect of choice, the introduction of competitive markets in conjunction with standard accountability measures has had problematic effects on equity. Instead of incentivizing improved performance, research has shown that, despite their lottery-based admissions processes, charter schools sometimes “compete” by encouraging the best-performing students—and most engaged parents—to apply, often at the exclusion of students most “at risk” or those with special needs or students with limited English proficiency (Jessen 2013; Lubienski 2007; Ancess and Allen 2006; Adnett and Davies 2005; Gewirtz 2002).

Techniques such as marketing and branding, or requirements for students and parents to interview, sign contracts, or take tours of the facilities can be intentionally deterring to less advantaged families (Jessen and DiMartino 2011; Lopez, Wells and Holmes, 2002). An offshoot of this concern is the finding that charter schools are more racially and economically segregated than traditional public schools (Civil Rights Project 2010).

Miron, Urschel and Mathis (2010) found that, compared to their sending districts,

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charter schools were much more segregated along socioeconomic lines. Clearly, research has raised concerns about student equity in market-driven reforms.

Like charters throughout the country, the charter schools in Maine are widely varied in purpose, challenges, and opportunities. Though Baxter Academy, Harpswell Coastal Academy, and the Maine Academy of Natural Sciences all happen to have nature- or science-based educational themes, they each employ a different curricular approach. The Maine Academy of Natural Sciences offers an alternative education program, particularly for students who have not thrived in traditional public settings. Harpswell Coastal Academy offers innovative assessment models with standards-based grading as a foundation. Fiddlehead School for Arts and Science follows a Reggio Emilia curricular program, a selfguided curriculum based on the interests of the children and founded on the principles of respect, responsibility, and community. Many of these schools use project-based learning models. Baxter Academy offers long-term science and technology project opportunities.

…research findings on charter schools are as diverse as the schools themselves.

The geographic locations of Maine’s charter schools may play an important role in the school’s outcomes and impact on both the students and the surrounding community. In part because of their location, those serving more rural areas of the state do not necessarily fall into a category

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C O M M E N T A R Y of “increasing market competition.”

While the enrollment and financial impacts of these schools may still be felt by a few local-area public schools, many more rural-area charter schools may face challenges different from their more urban counterparts, including sustaining enrollment while simultaneously maintaining the focus of their mission.

Baxter School for Technology and Science offers a good example of the challenges faced by a non-rural charter school.

With a focused science and technology curriculum, the approval of this school opens up an additional set of questions as it participates wholly within the educational landscape in the highly populated Portland area. Due to its location, this school cannot help but alter the educational market in area schools. Already, Portland-area schools are considering what effects the introduction of Baxter School for Technology and Science will have on them (Graff 2012), and Baxter has publicly positioned itself in contrast to local public schools (Amory 2013).

… having charter school status does not, in and of itself, result in better performance.

Of course, it is not always the founding educators who set the intention of feeding market competition. It is often the political support behind the introduction of charter policy that is motivated, in part, by an interest in creating market competition. However, conflicts can arise between the broader interests of policymakers and 76

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the intentions of the educators involved in starting a charter school. With pressures from a variety of political actors, charters schools can unwittingly become part of a larger political movement.

For example, conservative think tanks such as the Maine Heritage Policy Center base their educational policy ideals on the economic freedom principles of Milton Friedman. Market advocates espouse that providing choice to public school students creates competition, which incentivizes traditional local-area public schools to improve performance.

While Baxter Academy denies a direct alignment between the Maine Heritage Policy Center and the school, a recent luncheon hosted at the school for the center sparked speculation that one underlying political purpose of this charter school is to increase market competition in Maine’s largest public school district (Cousins 2013).

The differences in policy foundation and the intentions behind the formation of a charter school are seemingly slight, but can have significant effects. Charter schools have the opportunity to work in either a complimentary or competitive way with traditional public schools in their community. They can focus on providing niche educational programs offering unique and innovative opportunities within a local area. They can use their schools to provide models to inspire rebirth within the traditional public schools. The opportunity to create a charter school provides the autonomy and capacity to experiment with new models and foster innovation for education in general. Ideally, traditional public schools can gain insights into their own educational possibilities from the experiments that charter schools are conducting.

Alternatively, charter schools can be part of a larger drive to implement privatesector principles of markets in public

education. This is where the problem lies, given the concerns raised in the body of research about equity for students and the unintended outcomes of markets in the public sector. For Maine’s charter schools, as in other areas of the country, it will likely be a delicate balance to match intentions with practices.

Research on a national level has identified a number of questions regarding charters that need to be raised. Do charter schools outperform, or at least perform as well as, traditional public schools? What impact does the introduction of markets and choice have on the charters and localarea public schools and students?

If anything is clear from the research and experience with charter schools across the country, it is that having charter school status does not, in and of itself, result in better performance. Those involved in charter movement at all levels would do well to recall what Bill Gates admitted in a speech in 2008 after spending close to $2 billion supporting the development of hundreds of small public charter-like schools across the country in the early part of this century: “It’s clear that you can’t dramatically increase college readiness by changing only the size and structure of a school.

The schools that made dramatic gains in achievement did the changes in design and also emphasized changes inside the classroom” (www.gatesfoundation.org).

Clearly, much more depends upon what happens inside a charter school than on the charter status itself.

Considering the range of unique needs of schools and communities, the effect of each charter school in Maine must be evaluated individually. Before pushing forward with the development of new charter schools, Maine should examine how each of the schools in this first set performs and their impact on public education in the state and in their

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COMMENTARY: MAINE CHARTER SCHOOLS

C O M M E N T A R Y communities. By taking this opportunity to learn from the few charter schools we have, not only do we stand to ensure continued equity for students, we can gain insights into those “changes in design” and “changes inside the classroom” that might serve as models elsewhere. -

Cousins, Christopher. 2013. “Alfond Attacks New Portland Charter School for Aligning with ‘Extreme Organization.’”

Bangor Daily News (July 27).

REFERENCES

Gewirtz, Sharon. 2002. The Managerial School: Post-Welfarism and Social Justice in Education. Routledge, New York.

Adnett, Nick and Peter Davies. 2005.

“Competition between or within Schools?

Reassessing School Choice.” Education Economics 13(1): 109–121.

Ancess, Jacqueline and David Allen.

2006. “Implementing Small Theme High Schools in New York City: Great Intentions and Great Tensions.” Harvard Educational Review 76(3): 401–416.

Amory, Jonathan. 2013. “Maine Voices: Baxter Will Address What Public High Schools Can’t.” Portland Press Herald (March 29).

Barber, Alex. 2012. “First Charter Schools in Maine Start First Day of School.” Bangor Daily News (October 1).

Berends, Mark, Caroline Watral, Bettie Teasley and Anna Nicotera. 2006.

“Charter School Effects on Achievement: Where We Are and Where We’re Going.”

Paper Presented at the National Center on School Choice “Charter Schools: What Fosters Growth and Outcomes?”

Vanderbilt University, Nashville, TN. Center for Research on Educational Outcomes (CREDO). 2009a. Multiple Choice: Charter School Performance in 16 States. CREDO, Stanford University, Stanford, CA. Center for Research on Educational Outcomes (CREDO). 2009b. CREDO Finale to Hoxby’s Revised Memorandum.

CREDO, Stanford University, Stanford, CA. Civil Rights Project. 2010. Choice Without Equity: Charter School Segregation and the Need for Civil Rights Standards.

Harvard University, Cambridge, MA. civilrightsproject.ucla.edu/research/ k-12-education/integration-and-diversity/ choice-without-equity-2009-report.

[Accessed October 14, 2013]

Cowen Institute. 2012. The State of Public Education in New Orleans 2012 Report.

Scott S. Cowen Institute for Public Education Initiatives at Tulane University, New Orleans, LA.

Graff, Will. 2012. “Legislators, Cape Elizabeth Elected Officials Wary of Charter Schools.” The Forecaster (November 29).

Hoxby, Caroline. 2009. A Statistical Mistake in the CREDO Study of Charter Schools.

Stanford University and NBER, Stanford, CA.

Miron, Gary, Jessica Urschel, William Mathis and Elana Tornquist. 2010.

Schools without Diversity: Education Management Organizations, Charter Schools, and the Demographic Stratification of the American School System. Education and the Public Interest Center, Boulder, CO, and Educational Policy Research Unit, Tempe, AZ. nepc.colorado.edu/publication/ schools-without-diversity [Accessed October 23, 2013] U.S. Department of Education (USDOE) 2013. The Condition of Education 2013.

U.S. DOE, National Center for Education Statistics, Washington, DC. nces. ed.gov/programs/coe/indicator_cgb.asp [Accessed October 23, 2013]

Sarah Butler Jessen is an

Jessen, Sarah Butler. 2013. “Special Education & School Choice: The Complex Effects of Small Schools, School Choice and Public High School Policy in New York City.” Educational Policy 27(3): 427–466.

Jessen, Sarah Butler and Catherine DiMartino. 2011. “Corporate Style Schooling: Marketing for Private Gain Rather than the Public Good.” Teachers College Record 16556.

Lopez, Alexander, Amy S. Wells and Jennifer J. Holmes. 2002. “Creating Charter School Communities: Identity Building, Diversity, and Selectivity.” Where Charter School Policy Fails: The Problems of Accountability and Equity, ed. Amy Wells.

Teachers College Press, New York.

independent educational research consultant living near Portland, Maine.

Her 2011 Ph.D. dissertation from NYU explored the expansion of public school choice in New York City and was awarded “runner up” for the American Educational Research Association’s Division L Outstanding Dissertation Award.

Lubienski, Christoper. 2005. “Public Schools in Marketized Environments: Shifting Incentives and Unintended Consequences of Competition-based Educational Reforms.” American Journal of Education 111:464–486.

Lubienski, Christoper. 2007. “Marketing School: Consumer Good and Competitive Incentives for Consumer Information.” Education and Urban Society 40(1): 118–141.

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Margaret Chase Smith Library 2013 Essay Contest First Place Essay

Improving the American Educational System

Each year, the Margaret Chase Smith Library sponsors an essay contest for high school seniors.

by Samantha Leiper

This year, students were

I

n the U.S. educational system, there is a certain quantity of luck associated with success. Undeniably, hard work, dedication, and a positive attitude allow students to obtain achievement from their instructions. However, there are too many factors that stifle the schooling of today’s students, and therefore jeopardize their future. Aspects such as outdated educational methods, school-bred bias, and harmful government regulations contribute to holding the children of America back—and thereby restraining the future of this country. Young adults should not have to rely substantially on luck to get into the training programs or schools they desire. The American educational system can be improved by a new, fresh outlook on personal connections, the ridding of present bias in educational institutions, and the refining of ineffectual federal government involvement.

There is no doubt that many students establish beneficial connections with their teachers during their high school years. I am fortunate to be one of these students.

Strong teacher relationships are something that I believe have furthered not only my education, but my desire and thirst for knowledge. However, in my school, strong teacher-student relationships are not only supported, but encouraged. Students and teachers are provided constant support and the opportunity to communicate through an email system

invited to propose what they would do to improve the American educational system. We feature here the top three 2013 prizewinning essays.

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created by the high school. Every day there is time for students to meet with teachers face to face for any assistance they may need. Sadly, this is not the case for every high school. Often, these relationships are either discouraged, or not given the opportunity to flourish. I believe wholeheartedly that an increase in student-teacher communications is the first step to a positive growth of the current educational system in the U.S. Many people assume that “hard to change factors such as class size, teacher experience, or availability of instructional supplies are crucial for predicting student achievement” (Rimm-Kaufman 2012: 4). However, these aspects, while important, are not as important as positive student-teacher relationships.

According to Rimm-Kaufman, “teachers who foster positive relationships with their students create classroom environments more conducive to learning and meet students’ developmental, emotional and academic needs” (Rimm-Kautillan 2012: 1). Although students who already excel academically also benefit from a healthy relationship with their teachers, that benefit is greater for at-risk students.

Often, positive relationships between teachers and at-risk students create a support system not present in the lives of these struggling students. Even more intriguing is that the fate of these at-risk students can be reversed by positive relationships with their teachers. In fact, it is not uncommon for students who are failing most of their courses to earn above-average grades in classes where they have a caring relationship with their teachers (Phelan, Davidson and Cao 1992). These close relations may also help students in other ways, such as improving their social skills and increasing their resiliency (RimmKaufman 2012).

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STUDENT PERSPECTIVE

With such positive results, it seems absurd that student-teacher relationships are not emphasized more. While some institutions make an effort, it should be considered a norm for students and teachers to develop relationships that will better the students’ education, social skills, and influential connections. It is important to note that improving studentteacher relationships is indeed possible to achieve, and students would value it. I conducted a survey, asking my peers the question, “In your high school education, would you rather have a teacher with whom you have a close, healthy relationship, or a laptop/other technology that is issued to you?” Ninety-three percent of respondents chose a healthy teacher relationship, while only seven percent chose technology. This small study indicates that despite the undeniable importance of computers, close student-teacher relationships are more important to students.

Action should be taken in schools nationwide to incorporate more time for students and teachers to establish bonds that can help both groups succeed later in life. As a student, I have seen how a block of 20 minutes a day allowed relationships between student and teacher to blossom, so it seems both a simple and clever way to give American students the opportunity to be successful.

Although a strong connection between students and teachers increases students’ confidence, that poise is instantaneously destroyed if students are undermined by factors they cannot control.

Although many consider racism and its devaluing consequences to be an issue of the past, racism and bias are introduced into school systems through official legislation. Standards have been set in some states, such as Virginia and Florida, that demand higher grades and test scores from certain races of students. In Virginia, “45 percent of black students are required to pass the math state test, whereas 82 percent of Asian Americans, 68 percent of

whites, and 52 percent of Hispanics are required to pass” (Hooda 2012). This bias in American school systems is not acceptable, as it tarnishes both the drive of students and the reputation of the country. Every American citizen is supposed to have equal opportunity and expectations. This American precept is diminished as more states set up similar educational standards. As many school officials have expressed, “if a state expects less performance from a particular group of students, they will lose the motivation to perform better” (Hooda 2012).

According to an article in the Huffington Post from October 12, 2012, similar standards have been set in Florida, where former Gov. Jeb Bush was concerned that the new “measures would send a ‘devastating message’ that black and Hispanic students weren’t as capable as others.”

In the same article Jeannie Oakes, of the University of California, Los Angeles, states that putting students in groups gives “them very different opportunities to learn—with strong patterns of inequality across teachers, experience, and competence. There was this pervasive view that Latino and African American kids can’t measure up in a way that more affluent or white kids can and we can’t do anything about it.” Another concern is that if standards are set according to race, students and teachers will begin believing and fulfilling the prophecy (Hooda 2012).

The key to crossing racial lines and fully desegregating schools involves heterogeneous grouping and a method known as detracking. This is simply the mixing of students into the same classes to ensure they have the same opportunities for growth. In a school outside of Chicago called Evanston Township High School, detracking resulted in desegregation and a reduction of bias, and also improved percentages for honors curriculums. In 2006, new superintendent Eric Witherspoon entered a math class with only black students. As he walked in “a

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young man leaned over … and said ‘this is the dummy class’” (Halpert 2012).

Prior to Witherspoon’s appointment, students in the honors classes were primarily white. However, by September 2011, a majority of Evanston freshman were completely integrated in more rigorous courses, where they met in small, heterogeneous groups to discuss their learnings. In 2006, only 19 percent of minority students were in honors classes; by 2011, it had jumped to 39 percent.

The goal of the school is to “establish honors classes across the curriculum because [Witherspoon] believes that the achievement levels of minority students will remain low if they aren’t placed in more rigorous classes” (Halpert 2012).

As a student who has attended a detracked high school, I wholeheartedly believe that it propels many students into academic success. At Nobel High School, students are separated randomly into one of three academies, where they stay for the duration of their high school experience.

With their own set of teachers and peers, each academy forms a small, heterogeneous community, which creates support and a sense of family. Students are admitted into advanced placement classes based on completion of a summer project, not test scores. This brings a diversity of students with a variety of interests and perspectives into a small, strong classroom environment. The detracking method and heterogeneity of Noble High School exposes its students to new opinions and ideals, while preparing them for the outside world in terms of listening skills and teamwork.

In 2001, President George W. Bush signed the No Child Left Behind Act, a reauthorization of the 1965 Elementary and Secondary Education Act. The purpose of the Act is to ensure “that all children have a fair, equal, and significant opportunity to obtain a high-quality education and reach, at a minimum, proficiency on challenging State academic

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achievement standards and state academic assessments.” Though these goals seem beneficial, the way they have been executed in the classroom has diminished the education of students and their test scores. According to a blog by Grace Rubenstein on Parenting.com, test scores have gone down after lecture-style teaching methods for third graders were implemented at Hillside Elementary in Lorenzo, California. As teacher Krista Sokolsky says, “the program doesn’t really allow for variation,” therefore, kids have “nothing they get to look forward to when they come to school.” These enforced methods do not seem to be working at this school, as “scores actually dropped in the 2007-2008 school year, when teachers had to start sticking closely to the new reading program.” With practical expectations to be reached by impractical means, No Child Left Behind has been dubbed by many as “a classic case of good idea, bad execution,” according to Rubenstein’s blog. To ensure national academic success, No Child Left Behind must be refined, with individual needs being addressed by state governments and schools.

President Barack Obama’s administration has begun to reform the No Child Left Behind Act. As President Obama (2012) himself stated: Standards and accountability—those are the right goals. Closing the achievement gap, that’s a good goal….We’ve got to stay focused on those goals. But we’ve got to do it in a way that doesn’t force teachers to teach to the test, or encourage schools to lower their standards to avoid being labeled as failures.

That doesn’t help anybody. It certainly doesn’t help our children in the classroom.

With this reform, more power is being given to the states to determine the standards for their own schools. The importance of local influence in education is one that should not be undermined. After all, according to President

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Obama “what might work in Minnesota may not work in Kentucky—but every student should have the same opportunity to reach their potential.”

America has been dubbed by many people as a “melting pot,” a mixture of ethnicities, backgrounds, and cultures. It makes sense that learning styles and educational needs and implementations are also included in the melting pot.

Education should continue to be handled close to home, so success can be defined and maintained by people who are directly involved. In 2009, President Obama and Secretary of Education Arne Duncan introduced the Race to the Top, which grants funds for innovative and creative reforms in education by state and district governments. This has created a healthy competition between schools and states for specialized, successful education.

Because state and local governments are more able to clearly determine what school goals should be, they, using input of each school, should be the ones to explain how goals will be attained.

The education of America’s youth should be held to certain standards.

However, these standards should be established by the states instead of a national government, which cannot understand each area’s specific needs.

President Obama started his reform by telling states directly that the national government will grant flexibility in meeting the standards in ways determined by the states themselves.

Despite the success of the American education system, there are still key issues to address in regards to strengthening the country’s academic structure.

There are certain aspects of education that may have been established with good intentions, but have either not adapted to changing times or have not been executed in a proper manner. To improve the educational system in the U.S., I believe we need to redefine student-teacher relationships, rid schools

of bias that hides around country, and refine certain government educational initiatives. It is now time to establish a truly equal footing for all American students to preserve the notions on which America was founded. Life, liberty, and the pursuit of happiness are indicative of a democratic society, which grants this country the right and ability to move forward as a nation into times of intellectual prosperity and the true achievement of the American dream. REFERENCES Halpert, Julie. 2012. “Do We Still Segregate Students?” Pacific Standard (22 August).

Hooda, Samreen. 2012. “Virginia New Achievement Standards Based on Race and Background.” The Huffington Post (24 August). www.huffingtonpost. com/2012/08/23/virginia-new-achievement-based-on-race_n_1826624.html [Accessed September 20, 2013] Obama, Barack. 2012. Remarks by the President on No Child Left Behind Flexibility. Office of the Press Secretary, The White House, Washington DC. Phelan, Patricia, Ann Locke Davidson, and Hanh Thanh Cao. 1992. “Speaking Up: Students’ Perspectives on School.” Phi Delta Kappan 73:695–704.

Rimm-Kaufman, Sara. 2012. “Improving Students’ Relationships with Teachers to Provide Essential Supports for Learning.”

American Psychological Association. www.apa.org/education/k12/relationships. aspx [Accessed September 20, 2013]

Samantha Leiper graduated from Noble High School in North Berwick, Maine, after four years of magna cum laude honors.

She was a member of the symphonic band, student council, and the National Honor Society. This fall she started college at the University of New Hampshire.

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STUDENT PERSPECTIVE

Margaret Chase Smith Library 2013 Essay Contest S e c o n d P l a c e E s s ay

Each year, the Margaret Chase Smith Library sponsors an essay contest

Improving the American Educational System

for high school seniors.

By Brady Davis

This year, students were

W

invited to propose what they would do to improve the American educational system. We feature here the top three 2013 prizewinning essays.

hen I voiced my interest in becoming an educator to one of my teachers, his response was simple, “Don’t be a teacher.” That struck a significant chord with me, not because I thought he doubted whether or not I could teach, but because for the past four years I had been witnessing a significant deterioration in the morale of teachers whom I respect at my high school. My first awareness of the morale issues in the secondary education system came as a freshman, when one of the best English teachers I had ever had announced that she would be leaving and she was unable to hide her frustration. Then, at the end of my sophomore year, a different teacher openly apologized to my class for letting certain administrative issues get in the way of his algebra teaching. He mentioned to the class multiple times during the year how he felt the administration had mistreated him and his colleagues with regard to fair pay and accountability. I couldn’t help but notice how, on some days, my teachers looked defeated and under significant stress. Nevertheless, it was at these moments that I learned to respect the resilience and commitment each of my teachers displayed. As professionals, they continued to teach us despite all that appeared to be affecting them. My algebra teacher ended the year with an apology, but he still taught, and

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our class thrived; he did his job successfully in the opinion of his students.

The dedication my teachers displayed in the face of many challenges is one of the main reasons I am still inspired to become a high school teacher. However, the warning not to become an educator is one I couldn’t help but take to heart, and one I believe forewarns of some core issues within the current secondary education system. In secondary education specifically, but also in American education as a whole, there are three major issues that inhibit improvement. These are the overwhelming degree to which teachers are held accountable, the generalizing standards that measure an educator’s success, and the limited time available for educators to develop their skills. All of these issues have contributed to the loss of morale in the teaching profession. The solutions to these problems require a greater awareness of the significance of teachers in our society.

As I began to think about becoming an educator, I started to look at the individuals responsible for my education differently. I came to the conclusion that, while teaching is an incredibly difficult profession, it is one that is critically essential and significant. However, through a number of observations and experiences, I became conscious of how the current educational system in the U.S. is negatively affecting its teachers and obstructing their success.

For more than 100 years, teacher ability and accountability have been concerns in the U.S. education system.

Within the past decade or so, these concerns have risen as the academic achievements of students in the U.S. have largely fallen behind those of students from numerous countries around the world. U.S. students are far outperformed in mathematics, science, and reading by students in countries such as Singapore, Finland, and China. To

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catch up and attain the level of excellence that other educational systems around the world have achieved, the U.S. has conducted volumes of research and initiated numerous programs to improve education and raise achievement scores.

Most research indicates that “of all the variables under a school’s control, the single most decisive factor in student achievement is excellent teaching” (Friedman and Mandelbaum 2011). So it appears that the success of students, and ultimately the success of education in the U.S., rests on the shoulders of American educators. Despite the mounting pressure on teachers to improve education, more research revealed that “compared to the other countries that outperform [the U.S.] in education, [the U.S. does] very little to measure, develop, and reward excellent teaching” (Friedman and Mandelbaum 2011). In response to such findings, numerous federal initiatives, such as the Bush Administration’s No Child Left Behind (NCLB), initiated in 2002, were established to set achievement standards for students and pressure educators into teaching their students at an “excellent” level. In 2009, the Obama Administration initiated its Race to the Top program to create a standard of achievement for teachers that required a process of evaluation in order for their schools to be rewarded with federal grant money.

The message these initiatives and programs convey is that teachers are accountable for the success and failure of the American educational system as a whole. “Let there be no doubt about it: The United States looks to its teachers and their efforts, but not to its students and their efforts, for success in education,” said one teacher from Texas, named Paul Zoch (Bauerlein 2011). So much responsibility is put on educators that is it no wonder they look defeated and under significant stress. For American education to be improved, teachers should not be

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the only ones held accountable. Outside of the classroom, where a tremendous amount of learning should take place through homework and study, teachers have no control over their students.

Though it is up to the parents or guardians to assure a safe and conducive environment for that work to be done, it is the student’s job to accomplish it. Currently, a lack of structure and shirking of responsibility at home reflects badly on the teacher when a student performs poorly.

This may be one of the reasons the U.S. has fallen behind countries whose students have developed a more formidable work ethic. Former U.S. Assistant Secretary of Education, Diane Ravitch, illustrates the lack of accountability to everyone but teachers as she explains that, “One problem with test-based accountability, as currently defined and used, is that it removes all responsibility from students and their families for the students’ academic performance. NCLB neglected to acknowledge that students share in the responsibility for their academic performance and that they are not merely passive recipients of their teachers’ influence” (Bauerlein 2011).

The solution to this problem requires collaboration between teachers, parents, and students. Educational responsibilities that cannot be carried by one party alone must be shared. Excellent teaching alone will not solve the issues facing American education—the solution also requires driven students and caring parents. Many politicians and education officials who set the standards for student and educator achievement do not have the opportunity to set foot in every school and community around the country. Therefore they do not understand what is and isn’t under a teacher’s control (Ballard 2011). There are many factors that affect student success. Unfortunately, due to a host of reasons, not all parents can provide their children with environments conducive to study. Another factor that is outside a

teacher’s control is the broad spectrum of learning styles between students. These differences make standards-based teaching difficult because some students do not learn in such a concrete way and others become extremely anxious during standardized testing.

Aside from reducing the accountability of teachers on matters that are outside their control, a possible solution lies in a more sensitive approach to standardization. A heightened level of awareness of the specific details of education at a localized level would cater to the diverse nature of learning and teaching. This solution would treat students and teachers as individuals with individual needs, not numbers and data belonging to districts and school units. In this way, teachers could be given more opportunity to sit down with students who require more time to master a topic, or alternatively, provide students with greater opportunity to excel. Standardization could then also be catered to student diversity, as one subject test could have many forms allowing a number of students on varying levels of comprehension to take and score well on tests.

While teachers are incredibly resilient people, it comes as no surprise when the expectations placed on them have a significant impact. The impacts I have witnessed can be described as a deterioration of the morale of teachers at my high school. This level of accountability on educators is nationwide; certainly teachers across the country must be feeling the effects these unreasonable demands. Poor morale may be attributed to the lack of opportunity for teachers to hone and develop their skills because as demands have risen, professional development time has not. Alternately, the education systems in leading academic countries such as Finland and Singapore allot nearly ten percent of educators’ time for professional development.

Furthermore, the environment within

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these foreign education systems highly encourage a more collaborative educational process, featuring teacher observation and teacher-to-teacher coaching in the name of improving individual teaching practice (Friedman and Mandelbaum 2011). The American educational system can learn from the example set by these nations.

Just as students find pride in developing proficiency in various subjects, teachers find a heightened sense of professionalism and preparedness from development time. As a student, it is obvious when a teacher has had the time to develop a quality lesson plan, presentation, or lecture, as demonstrated by the teacher’s confidence and enthusiasm. As students are given the opportunity to work in peer groups, teachers should be given the opportunity to attend workshops where their peers discuss effective teaching and problem-solving methods.

Teacher collaboration should not be limited to the U.S. either; the U.S. educational system should encourage American educators to collaborate with teachers in other countries to learn what has and hasn’t worked for them. In this way, American education could be improved from the inside out, with individual development, and from the outside in, with international collaboration.

Nations with the highest student achievement attract teachers because teaching is one of the most respected careers in their societies. Alternatively, in the U.S, teaching is one of the less desirable professions. Perhaps it is the low starting salaries of teachers that dissuade many students in the U.S., while in other countries the high starting salaries, equal to many other graduate salaries, surely attract the best and brightest who otherwise might have gone into a more lucrative profession (Friedman and Mandelbaum 2011). In countries where teaching remains in the top three career choices for university students, teachers

are held in the highest professional regard (Friedman and Mandelbaum 2011). Also the world’s top 10 bestperforming educational systems attract the top 10 percent of their student to become educators (Friedman and Mandelbaum 2011).

Surely, teaching cannot be as respected as it once was in the U.S. when even teachers are attempting to steer prospective students, such as myself, away.

But without dedicated teachers, there would be no hope for the American educational system. So it is crucially important to attract individuals to the teaching profession not only to improve education, but to maintain it. The solutions outlined in this paper will restore respect to the teaching profession, attract more teachers, and effect great change for the American educational system. Despite all I have experienced and witnessed in regard to the issues in the American educational system today, what has left the most resounding impact on me is how each of my teachers have risen to the call of improving education. Many of my teachers have displayed qualities that I greatly respect and hope to cultivate within myself. Also, should I become an educator, I would hope to leave an impact with my future students similar to the impact my teachers have left on me. I have not lost faith in education in our country, and I strongly believe that with the combined effort of teachers, policymakers, parents, and students, the American education system will rise to prominence in the world once again. -

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REFERENCES Ballard, Chris. 2011. “Student Accountability: The Real Problem with Education - Page 2.” Student Accountability: The Real Problem with Education. Technorati (April 2). http://technorati.com/lifestyle/ article/student-accountability-the-realproblem-with/. [Accessed September 22, 2013] Bauerlein, Mark. 2011. “Accountability on the Student Side.” Brainstorm. The Chronicle of Higher Education (29 August). http://chronicle.com/blogs/ brainstorm/accountability-on-the-studentside/38708 [Accessed September 22, 2013] Friedman, Thomas L., and Michael Mandelbaum. 2011. That Used to Be Us: How America Fell behind in the World It Invented and How We Can Come Back.

Farrar, Straus and Giroux, New York.

Brady Davis graduated summa cum laude from Freeport High School, where he was a member of the National Honor Society, Seeds of Independence Mentoring Program, Reducing Sexism and Violence Program, Western Maine Conference All-Academic Team, varsity cross country, alpine skiing, and baseball. He is enrolled at the University of Maine, studying Business Management.

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Margaret Chase Smith Library 2013 Essay Contest Third Place Essay

Improving the American Educational System

Each year, the Margaret Chase Smith Library sponsors an essay contest for high school seniors.

By Mariah Damon

This year, students were

I

believe that the American education system has a few flaws that cause it to be unsuccessful. Our country has very high drop-out rates, and the programs we currently have are not doing much to fix this. Today’s schools are geared toward those people who will continue their education in college after high school.

This does not help those who do not want to go to college; sometimes, students who cannot keep up in academics drop out because schools have no other programs for them. Education has become competitive; the main focus is test scores, with many school districts worried about getting better scores than neighboring schools. This is not encouraging to students because they feel that if they cannot keep up, they might as well drop out. However, I believe that this can be fixed by making a few changes to how our students are educated. A few things that could be changed include the No Child Left Behind Act, vocational programs in schools, and how much standardized testing we allow. By addressing these key problems, we could make school more school a more enjoyable and profitable place for every type of student, regardless of what path they choose to take after high school.

First, the U.S. should eliminate the No Child Left Behind Act because it is doing exactly the opposite of what its name says: it is leaving students behind.

invited to propose what they would do to improve the American educational system. We feature here the top three 2013 prizewinning essays.

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This Act created more standardized tests so the performance of different schools could be compared. Although this sounds like a good idea, it also left it up to each state to decide how they would meet the appropriate standards needed to be viewed as successful. Many teachers have begun teaching to the tests, and this has caused the students to lose out on valuable instruction time. In the end, this hurts the students because they are only learning what is on the tests. They are losing out on most of their education and growth, which causes some of them to fall behind.

As the National Council of Churches points out in a press release (www.ncccusa. org/news/051130NoChildBehind.html), “Instead of treating children ‘as unique human beings to be nurtured and educated’…the act has encouraged school districts to regard children as ‘products to be tested and managed.’” We are testing our children too much and not giving them an individualized education. Instead, they are forced to learn what everyone else does and they are not given as much individual attention from the teacher. Our schools are turning into assembly lines that only prepare students for the tests that they will have to take. We should stop focusing on trying to meet the No Child Left Behind standards; instead we should try to educate our children with more instruction time and classroom interactions.

A second part of our education system that could be improved is the lack of vocational programs in most schools.

Today, American schools are geared toward students who will be entering college after high school, but this is not the best path for everyone. The students who are struggling in the classes that prepare students for college are probably not motivated to attend a four-year university. Instead they may want to do

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a more hands-on job such as a mechanic or an electrician. By cutting vocational programs, our schools are not only denying students the right of finding what they have a passion for, they are also eliminating a reason for some students to come to school. Many students, who do not like the academic part of school, enjoy the vocational part.

This program is what keeps them from dropping out of high school. A one-sizefits-all model won’t work for every student. Our society needs mechanics, welders, and plumbers. Through the eliminations of these programs, we are limiting the number of students with whom our schools can connect and graduate into society. Offering a wider range of vocational programs would lower our drop-out rates because these students would a have a reason to come to school.

A final part of our education system that should be changed is the amount of standardized testing that occurs in our schools. By constantly testing our schoolchildren, we are robbing them of valuable lessons and instructional time within the classroom. Many teachers agree that there is too much standardized testing and that sometimes the tests are not always the best indicators of performance. In many schools, teachers have begun teaching to the tests because their students’ scores may be correlated with their salaries. This has taken the fun out of learning and made education more about scoring high on these tests.

Sure, our children may do well on these tests, but what else will they have learned? Learning should be more individualized and not about what a certain tests needs the students to know. By taking away many of the standardized tests, our school systems would not only be saving money, but both the students and teachers would be much happier. school should be enjoyable and contain many experiences and memories that will stay with the children throughout their lives.

America’s education system could be greatly improved by changing some of what we focus on today, including eliminating the No Child Left Behind Act, increasing vocational programs in schools, and decreasing the amount of standardized testing we allow. Through these improvements, we could make education more relatable and enjoyable for all students regardless of career path. In today’s world, people need to at least have a high school education to be successful.

By changing these three items, U.S. schools could greatly reduce their dropout rates and make their faculty and pupils happier. Through improving the U.S. education system, we could ensure that all students find the career path that they are destined for. -

Mariah Damon was valedictorian of her Gardiner Area High School class. She served as vice president of the National Honor Society, president of Student Council, and captain of the color guard team. She has volunteered at the Pittston Elementary School and Maine General Medical Center.

Mariah is enrolled at the University of New England, majoring in pre-pharmacy.

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Thanks to Our Reviewersâ&#x20AC;Ś

We would like to extend our sincere thanks and appreciation to all those who took time to review articles submitted for consideration for Volume 22 of Maine Policy Review.

Their insights and recommendations assist us in our editorial decisionmaking, and provide valuable feed back to authors in revising their articles to be suitable for publication in the journal.

The following individuals reviewed articles for Volume 22 (2013): James Acheson Mary Budd Catherine Dickerson Janet Fairman Deborah Felder Joel Johnson Dora Anne Mills Charles Morris Valerie Osborne Joyce Rumery Linda Silka Richard Woodbury

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