The school consolidation bill that was signed into law last Thursday – the day after it was passed by two-thirds of the Legislature – will have a dramatic, statewide impact on how local education is managed, forcing local referendums to cut the number of school superintendents and the central offices they administer roughly in half.

Cape Elizabeth, however, may be able to win an exemption.

The law requires cities and towns to create new districts serving no fewer than 2,500 students except where geography, demographics, economics, transportation, population density and other unique circumstances justify an exemption. The existing 290 districts in the state run by 152 superintendents and their staff – including those currently bound together by school unions – will be reduced to around 80 districts. While rural legislators fought for and won an amendment to the bill that makes it clear 80 is only a target, the value of that victory is unclear since it would be nearly impossible to get above 80 with the student population parameters stipulated in the law.

But Cape Elizabeth, among five districts found to be efficient and high performing, can make the case it should be left alone, though the criteria is not yet fully developed and won’t be until the end of the year.

The districts, which also include Yarmouth, Brunswick, School Administrative District 75 in Topsham and School Administrative District 22 in Hampden, were identified as high performing in a state policy report released earlier this year. That is not yet a sure out, according to Jim Rier, the Department of Education’s director of finance and operations.

“It’s premature to determine that,” Rier said. “Nothing is automatic,” under the law, he said, except that tribal and island schools are exempt.

Scarborough and South Portland, which both have more than 3,000 students in their districts, will not have to consolidate either, due to the population of the schools.

According to Rep. Cynthia Dill, towns were determined as high performing through a 2007 report by David Silvernail of the Center for Education Policy. At least three schools within in the district had to be classified as high performing in the report in order to make the cut.

Cape Elizabeth has 1,813 students in its school system. The qualification for efficiency, Dill said, was that less than 4 percent of the school’s expenditure per pupil went to the administration. According to Dill, Cape Elizabeth spends about $9,600 on each student and about $300 of that goes toward administration.

Cape Elizabeth Town Council Chairman Paul McKenney said the efficiency of the school system can, in part, be attributed to the “one-town” concept that Cape has adopted, which means that the town and the school district share employees. He cited examples, such as public works running the school buses and the school’s finance person managing the payroll for municipal employees. If Cape had to consolidate, McKenney said, the one-town concept would be lost, resulting in higher costs for both the school district and the town.

“We feel we’re already in line with what the state government wants to do,” McKenney said. “We shouldn’t be penalized just for the sake of consolidation.”

The next step for Cape Elizabeth is to submit a plan for how it will continue to be high performing and efficient.

The consolidation plan was approved as part of the overall state budget in a 112-29 vote in the House, with nine members absent, and a 28-7 vote in the Senate. All those voting against it in the Senate were Republicans, and Minority Leader Sen. Carol Weston of Waldo County was the only member of leadership in either body to vote no.

Gov. John Baldacci praised the bipartisan vote when he signed the bill into law. “Together, we recognized the need to cut administration in order to create opportunities and put more money in the classroom where it belongs,” he said.

The Department of Education is hitting the road next week to start the planning process. Meetings will be held between June 18 and July 15 in each of the 26 regional vocational/technical districts serving the state, where regional planning committees will be formed. Education Commissioner Susan Gendron and a few of her top staff will do presentations on what the law requires and offer planning support.

By Aug. 31, units will notify the department of their intent to enter negotiations with others. By Dec. 1, units have to submit a reorganization plan. Those the commissioner says meet the requirement of the law will be voted on in a community-wide referendum by Jan. 15, 2008. Those that are not ready would be voted on June 10, 2008.

The new districts formed would be run by regional school boards, which can create local school committees, whose power and duties would be specified by the regional board.

Financial penalties

There is an opt-out provision where plans can be rejected at the local referendums in 2008, but those that don’t eventually play and have a plan ready for July 2009 will pay through penalties.

For the 85 or so largely property-rich communities that are minimal receivers of state aid, that would mean a 50 percent reduction in state aid for special education – the one reimbursement they get. For the rest of the cities and towns, which get state aid for an array of school functions, the penalties are two-fold.

Those that refuse to consolidate would see a 50 percent reduction in state aid for system or central office administration and also would be required to raise more on the local mil rate to support local education before state aid kicks in. That local mil rate requirement has gone down over the last three years as the state reaches its goal of picking up 55 percent of the cost of education on a statewide average basis by 2008-2009. Those that don’t consolidate would be stuck at state aid rates in effect for the school year just ending.

All districts that don’t accept consolidation also would lose points on the scoring criteria that determines who gets state aid for school construction. The law says schools that can’t find partners after diligently trying will not be penalized.

Future budgets

Further complicating the school consolidation bill is the fact it was put inside the two-year, $6.3 billion state budget and is being used to justify a $36.5 million cut in state aid for administrative efficiencies that have yet to occur through district consolidation. The largest reduction will be a 50 percent cut in system administration. There also will be 5 percent cuts in special education, transportation, and facilities and maintenance funding.

Those cuts are the same ones proposed when Baladdci announced a school consolidation plan in January that would have reduced the number of districts statewide to 26.

Department officials say the savings are still doable because studies have shown districts of around 2,500 are the most efficient, and there is diminishing return the larger you get. The governor’s proposal would have created districts as large as 17,000 to 20,000 students.

To keep the pressure on local districts to keep school costs down, the consolidation bill also requires all districts, whether newly consolidated or not, to put the school budget on the ballot. Voters will be told how much the budget is over or under recommended spending levels in areas like administration, general education, special education, transportation and facilities and maintenance.

For those over spending levels recommended by the state, voters will be asked:

“Do you favor approving the budget for the upcoming school year that was adopted at the latest regional school unit budget meeting and that includes locally raised funds that exceed the required local contribution as described in the Essential Programs and Services Funding Act?”

The new law also clarifies other contentious issues, including local school closings and school choice.

A decision to close local schools would first require a two-thirds vote of the regional school board and a vote in the city or town where the school is located. If voters want to keep the school open, the municipality would be liable for the amount the district would have saved by closing it.

School choice of high schools is preserved under the new law despite the creation of new districts. Students in units that have school choice now will continue to have that choice after consolidation.

Reporter Leslie Bridgers also contributed to this story.