HOULTON, Maine -- Regional School Unit 29's additional local contribution for next school year's proposed $18.5 million budget is set to increase 10.57% from this year.
In the Houlton school district's 2026-2027 proposed budget, the total local contribution is $4.6 million, with $2.9 million required by the state and an additional local contribution of $1.6 million to bridge the funding gap, Superintendent Joe Fagnant said.
He attributed the increase to the state's current school funding formula, which he said relies heavily on property valuations and is not working for poor rural communities. As valuations rise, school districts get less from the state. That means district residents will pay more.
"As costs continue to rise, the current funding formula for Essential Programs and Services does not keep up with required expenditures," Fagnant said. "The valuation continues to rise, but the state continues to lower the mill rate, essentially keeping us stagnant for costs."
Despite Southern Aroostook's high poverty rates and 80% of the district's students on free or reduced school lunch, the budget is affected by continually rising property valuations and lowering mill rates, Fagnant said.
Many Maine school districts face similar challenges, especially those in high poverty, rural locations. But proposed legislation, LD 2226, if signed into law, could provide some relief to these communities with updated formulas for future years, Fagnant said.
The proposed change to the state funding formula would set regional adjustments to reflect cost of living and labor markets, adjust mill rates by regions, look at disadvantaged students, and create an opportunity for poor rural districts to earn more funding.
"We could potentially gain anywhere from $700,000 to $990,000 in state funding," he said.
With only a few days left in the legislative session, Fagnant said Tuesday that the Maine House, Senate and Appropriations Committee each voted to approve the bill: Maine House,122-23; Senate, 28-6 and the Appropriations Committee approved it late Monday night.
"The bill now heads from the appropriations committee back to the House and Senate for a few procedural votes," Fagnant said. "After that, LD 2226 will hopefully head to the governor's desk."
Valuations for the district's four towns - Hammond, Houlton, Littleton and Monticello - cumulatively increased 8.1% this year, or roughly $38 million over last year. Hammond increased 4.94%, Houlton, 8.42%, Littleton, 8.13% and Monticello, 6.85%.
"There are no new housing developments, no new businesses, no major industries in our area that represent $38 million of true taxable income," Fagnant said. "Next year, valuation is proposed to increase another 10.2%."
The proposed $18.5 million budget, set by the school board on April 6, reflects a 3.77% increase over last year and there are no proposed staff or program cuts, Fagnant told Houlton Town Councilors on Monday night.
"We are very fortunate to receive state funding of around 81%, which makes up a large amount of our budget," he said. "But when you look at the figures, we received $94,026 more from the state than last year, and the required local was only $1,382 more than last year."
Such slim increases do not meet the district's required increases. Personnel costs alone jumped $213,000 from required state minimum wages for hourly employees, he said.
Over the past several years the district has reduced 30 positions, and held equipment and supplies flat, Fagnant said Monday night.
"We are trying to cut things to save people," he said.
RSU 29 is the lowest school district in the state for per pupil expenditures, at $12,958.
"We have been very efficient compared to other Aroostook County schools," Fagnant said.
RSU 50 spends $16,920 per student; RSU 39 in Caribou spends $19,619 per student; MSAD 1 in Presque Isle spends $14,601 per student according to state records.
The district will hold a public budget information session at 6 p.m. Monday, April 27, in the Southside School cafeteria. Residents will vote on the budget in person at 6 p.m. Monday, May 11, at Houlton Middle High School.