BLUE HILL, Maine — Over the past eight years, George Stevens Academy has been chronically underpaid by the Maine Department of Education in funds totaling more than $800,000 that were specifically meant to help with building maintenance, according to lawyers hired by the Maine Association of Independent Schools.
At the heart of the issue is the Insured Value Factor, or IVF, a formula that provides funding to schools based on the number of students and the value of private buildings, land and additional assets required to operate a school. Under Maine law, the IVF is designed to help cover infrastructure and maintenance costs for schools that do not have publicly funded buildings and property, and cannot access local tax dollars for this purpose.
The amount of money provided via the IVF was decreased statewide in 2013, but the Legislature set annual incremental increases in the following years. The state, however, failed to make those increased payments.
In a Jan. 10 memo obtained by Penobscot Bay Press, the Portland based law firm Bernstein Shur notified GSA that the state had been underpaying the school for years.
“Recently, we discovered the Maine Department of Education has been calculating IVF incorrectly — artificially low — for at least eight years. The Department has confirmed that it agrees with our legal analysis of this miscalculation and is revising its calculation for the 2024-2025 academic year and going forward,” the memo stated.
The law firm estimates the state underpaid GSA by at least $821,670 since 2016 and said the miscalculation has “unsurprisingly” had a significant financial impact on GSA. School officials agreed.
“This is critical infrastructure funding that would have made a huge difference for our school,” GSA Board Chair Deb Ludlow said in a statement on Tuesday. “We are still figuring out what this means for GSA and hope to work with the state to make GSA whole so we can put this overdue funding to work and ensure our students have access to a campus and facilities that are safe, well-maintained, and contribute to the high-quality educational experience GSA provides.”
Over the past decade, the school has faced significant maintenance issues.
In November 2023, a $50,000 donation from an anonymous Penobscot resident funded emergency repairs to the roof of the school cafeteria. The work, completed by volunteer contractors from Jaffray Construction of Blue Hill, owned by GSA graduate Curtis Jaffray, prevented the closure of the school’s entire east wing, which houses the cafeteria, kitchen and two classrooms.
Breaking down the numbers
The IVF is set as a percentage of an independent school’s maximum allowable tuition, or MAT, which is the amount a school may charge sending towns for tuition. In 2013, the IVF was reduced to 6 percent from 10 percent of the MAT, with the understanding that it would incrementally increase back to 10 percent over the following years, according to the memo.
In 2014-15, when the IVF was set at 6 percent, the state paid $585 per student. By the 2023-24 school year, the IVF payments should have increased to $1,330 per student — or 10 percent of GSA’s established MAT, the memo stated.
The memo stated that the IVF for GSA has “never been adjusted” and “has resulted in a loss of more than $800,000 to GSA.”
“The Department has confirmed, through counsel, that GSA’s reading of the applicable law regarding IVF is correct,” the law firm stated. “It is our understanding that MDOE is currently reviewing the matter internally and determining next steps.”
A spokesperson from the Maine Department of Education said on Tuesday that MDOE is aware of the issue but declined further comment.
This story appears through a media partnership with the Penobscot Bay Press.
