THINKING AHEAD ON 1B

The most appealing aspect of referendum question 1A, which requires the state to pay 55 percent of school costs, is its swiftness. It falls like the blade of a guillotine on property taxes, chopping off a substantial portion instantly by mandating that the state pick up hundreds of million of dollars in school costs. This is the part state officials like least about the proposal and why they, led by Gov. John Baldacci, offered an alternative, which will appear as 1B on the November ballot.

The officials don’t like 1A because they know the havoc a sudden shift in responsibility will cause in state government. They prefer a competing measure, 1B, not only because they wrote it but because it is incremental – it takes six years to accomplish what 1A does right away. Question 1B even uses as a guide the sensible new model for school funding, Essential Programs and Services, basing increases for school funding on expected growth in state government, thereby promising a far less painful, if longer march toward equity.

State officials are now spreading the word around Maine for voters to reject the radical 1A in favor of the more comfortable 1B. It is an enticing trade, on paper, but 1B’s very incrementalism presents a problem beyond telling local taxpayers to wait until 2010 for the tax break they should have received when the 55 percent rule was passed in 1986. That statute ultimately was ignored, and then reconsidered only long enough for lawmakers to develop creative ways around it. (Ask your local legislator sometime to explain the “percentage reduction factor” – you’ll be impressed.)

The Legislature never made the funding goal of the ’86 law because of a recession beginning in 1990. Similarly, it did not remain on pace with funding a few years ago to begin Essential Programs and Services because of state revenue shortfalls beginning in 2000. Both attempts began with good intentions but both fell apart because funding increases for schools is one of the things lawmakers drop during difficult financial times – and don’t make up fully in good times. So in considering the 1B option, voters should ask themselves whether it is likely Maine will have some sort of economic downturn between now and 2010. It wouldn’t be extraordinary if it did, nor would it be a surprise if a slowdown or recession occurred late in the decade, just as the largest increases in funding under 1B are supposed to take effect.

That is the largest flaw in 1B. To correct it, Gov. Baldacci should demonstrate the state is serious about meeting the goal the question establishes and he should do so before the election. Increases in state revenues are projected to be paltry for the next two years: another $35.7 million increase between this year and next, nothing for the year after. In this instance, that’s good news because if the governor can show that he will substantially increase school funding under these conditions, Maine can feel more assured that he would raise it under whatever the economy is likely to do for the rest of the decade. If he can’t find the money now, chances are he won’t find it later.

What’s substantial? The state share of school funding this year is $730 million, projected to drop to $725 million next year. The governor says he hopes to push that back up to flat funding. He can do better. A 2 percent increase over the current year – tiny under normal conditions, meaningful here – would push the state share to $745 million next year. It would show commitment from lawmakers and, as important, make the climb to full funding under the new model more likely.

The governor should pledge to submit legislation raising the state share to $745 million and further promise to work with lawmakers to find ongoing savings governmentwide. A 2 percent increase is a mere down payment for what will require a long-term commitment to local schools. If the supporters of 1B cannot pledge even this small expression of good faith, the choice of the 1A guillotine immediately becomes more attractive.