AUGUSTA — A bill to include personal income and the local cost-of-living when figuring state school aid to towns drew fire from northern Maine school officials Tuesday at a legislative hearing.

The current formula relies solely on property value to determine a community’s ability to pay for its schools.

Sen. Jane Amero, R-Cumberland, sponsor of LD 902, said using only property value does not give a true picture of a community’s wealth. She said household income and the regional cost adjustment factor must be used together, in addition to property value, to assess a community’s need for state school aid.

Members of the Legislature’s Education Committee heard public testimony on Amero’s bill, which embodies the recommendations of the Committee to Study Organizational and Tax Issues in Public Schools. The committee, nicknamed for its chairman, John Rosser, a former commissioner of the Department of Mental Health and Corrections, made 20 recommendations, including the use of personal income and local cost-of-living factors to figure local school aid.

The cost-of-living factor, which received the most criticism at Tuesday’s hearing, is necessary because it costs more to live and to operate schools in some areas of the state than in others, the Rosser committee concluded.

Under the committee’s calculations, those communities with the highest cost of living are in the southern and coastal parts of the state. Even though personal income in northern Maine is less than it is in southern Maine, if the cost of living factor is included in the formula, most northern and eastern Maine school systems would lose state school aid, while most southern Maine systems would gain. For that reason, the most vocal opponents of the bill come from northern and eastern Maine.

A superintendent from eastern Maine offered graphic evidence about how school spending splits along north-south lines, and how the Rosser Comission recommendations would exacerbate the situation.

“There is a big difference between the two Maines,” said Betty Jordan, superintendent of SAD 77 in Machias. Adding income and the regional cost factor into the funding formula will only increase that difference, she said.

If the Rosser recommendations are implemented as proposed by LD 902, Machias would lose nearly $30,000 in state funding next year, while Falmouth, a similar size town in southern Maine would gain $185,000.

The per pupil valuation in SAD 77 is roughly $193,000 with an average teacher salary of $27,000. Per pupil spending at the high school level is just over $4,000. While state support to SAD 77 has dropped steadily since 1991, local spending on education has increased.

In Falmouth the per pupil valuation is $498,000. The average teacher salary is $35,000 and per pupil spending at the high school is $7,500. State support to Falmouth has increased sinced 1991 while local spending on education has decreased.

“To give the so-called wealthy towns more money just doesn’t make sense,” Jordan said.

Education Commissioner Wayne Mowatt also rejected the cost-of-living adjustment as recommended by the Rosser Committee. He said his department favors using aggregate income for an entire county to smooth out “peaks and valleys” that exist from one community to another. He said the use of personal income in the formula should be phased in gradually.

Nat Crowley, a member of the Rosser Committee and a former legislator from Stockton Springs, told legislators that while he voted to approve the committee’s report, he has reservations about the cost-of-living adjustment. He suggested that the legislators postpone any change in the funding formula until fiscal year 1997 while the cost-of-living adjustment factor is fine-tuned.

“The cost-of-living adjustment, in this form, is not working,” Crowley said. He said the Legislature should take time to fix it before embarking on any sweeping changes in the formula.

Educators from southern Maine praised LD 902 as the most equitable approach to school funding.

The Rosser report is “the best approach available at this time,” said Edward Ainsworth, business manager of the Falmouth School Department.

Under the current formula, one family pays $2,000 in property taxes toward education while another only pays $100, and that’s not equitable, said Frank O’Hara of the Coalition for Equitable School Funding. “Rosser is fairer than the status quo,” he said.