By SUSAN M. COVER
Staff Writer Thursday, January 18, 2007

An analysis performed by the State Planning Office shows 81 percent of school administrative units exceeded the amount of money they were supposed to spend under a state formula. The formula, called Essential Programs and Services, sets limits for how much schools should be spending in certain areas.

Most school units exceeded those limits, part of a 2005 state law known as Legislative Document 1, or LD 1.

"That is terrible and it's unacceptable," Baldacci said in a Cabinet Room press conference. "The failure to live within the means must be corrected."

To force districts to live within those limits, Baldacci wants lawmakers to require that new education money be passed onto taxpayers from now on. Previous proposals rejected by the Legislature called for 90 percent of all new money to end up in the wallets of taxpayers.

Baldacci, who is taking a hard line on the issue, repeated his pledge to veto tax-relief legislation if it doesn't require the bulk of the state money to be given to residents.

By 2009, the state will have given local schools an additional $800 million over four years to offset property taxes.

The report released Wednesday also showed that state, municipal and county governments have stayed within their spending growth limits, and that taxes are lower as a result of LD 1.

Passed by the Legislature in early 2005, lawmakers hailed LD 1 as the key to lowering local property taxes because the state would pay a higher percentage of school costs. At the same time, the state changed the school funding formula to make schools more accountable for the money they spend on education.

LD 1 put spending caps at the state, county and municipal level, and it required separate votes by elected officials, and in some cases townspeople, if they wanted to exceed the caps.

An analysis performed by Maine Revenue Services concludes that the average homeowner paid $245 less in taxes than they would have if LD 1 had not been in effect.

Despite that good news, Baldacci said he's heard from too many people that they haven't seen the kind of relief that was promised when lawmakers passed the bill two years ago.

One local superintendent said that for many school systems, it's not realistic to stay within the funding formula. Augusta Superintendent Connie Brown said the formula covers only a fraction of the cost to run school sports, bands and clubs, just one example of what she considers shortfalls in the formula.

"It's 10 cents on the dollar," she said. "Most communities would say that's unacceptable. It's a vital part of education."

Schools with fewer than 200 children are not supposed to have a principal under the formula, she said. And school nurses aren't approved for every school, although she believes they should be.

Although Brown is critical of the formula and believes it should be revisited, Augusta schools spent less than what the state allowed. She said the city council was unwilling to spend more.

Augusta proved to be the exception, since more than 80 percent of school units statewide opted to spend more than the formula.

"If 81 percent approved exceeding the formula, they must agree the amount provided by the state is insufficient," she said.

Other superintendents in Winslow, Waterville, Hall-Dale and Maranacook did not return phone calls seeking comment Wednesday afternoon.

Baldacci said he's taking a two-pronged approach to the school funding issue. First, he wants to require the money to be passed on. Second, he's proposing to reduce the number of district administrations from 152 to 26, which he believes will cut administrative costs by nearly $250 million over three years.

"I've given them a plan for action," he said. "I've given them a plan which sets into motion the administration being more efficient and central."

The Maine Municipal Association came to a similar conclusion about school funding in its analysis of LD 1, said Kate Dufour, a policy analyst with the association, which represents cities and towns.

"We really need to look at what's going on in the schools and figure out why they aren't coming in within (their limit)," she said.

She said any solution needs to take into account what's happening with the school funding formula.

"How do we get those dollars back to the property taxpayers?" she said. "It needs to be a reasonable plan as well."

Baldacci said that while schools may have had good reason for exceeding the formula, they must work to reign in spending.

"We must have accountability at all levels of government," he said. "School administrative districts, like everybody else, must learn to live within their means."

Susan Cover -- 623-1056

scover@centralmaine.com