AUGUSTA – Although the penalties for school units that fail to consolidate into larger districts are not as harsh as originally proposed, schools that resist mergers will be confronted with significant reductions in their state subsidies.

Districts that decide against consolidation would lose one-half of their subsidy for administrative costs and would see their percentage of the general purpose aid for overall programs frozen at 2008 levels for all time under the amended legislation passed Tuesday.

“It’s not that we won’t give them any more dollars; it’s just that we won’t give them a higher percentage of their share,” Department of Education director of communications David Connerty-Marin said Thursday. “There is a financial incentive for consolidation.”

Included in the Legislature’s approval of the $6.3 billion budget for the coming two years is the requirement that the 290 school units now in place be reduced to a maximum of 80 units by next July.

Each district must have at least 2,500 students and one publicly funded high school. Districts of at least 1,200 students would be permitted when demographics or geography makes it unreasonable to fold the schools into a larger district.

Connerty-Marin noted that even in situations where districts already have more than 2,500 students, such as Bangor or Portland, those school departments still would need to find savings in their budgets or face subsidy reductions. For instance, savings could be found through joint purchasing or by sharing transportation costs with a neighboring district, he said.

For minimum-receiver districts, communities whose property values are so high that the state provides a minimum subsidy, they would find that figure cut in half if they decided to opt out of consolidation. Under the original proposal districts would have lost their entire subsidies if they failed to consolidate.

“They’ve been described as weakening the penalties but the minimum subsidy is still a significant number and one-half the subsidy is a significant number,” Connerty-Marin said. “We’re talking serious money.”

The consolidation proposal was designed to save the state $36.5 million in costs while improving students’ access to quality educational programs. State educators and lawmakers believe savings gained from reducing administrative costs could be used to expand opportunity in the classroom. Larger school districts, they believe, will improve access to those programs.

“All the things we need to do to improve test scores and conform to Learning Results standards will be easier to do in a system that is not so fragmented,” Connerty-Marin said. “A fragmented system will be pulled tighter together.”

The initial proposal put forth by Gov. John Baldacci mandated school consolidation. The eventual compromise measure still demands consolidation, but the schedule has been relaxed and certain school systems, such as American Indian schools, those in certain isolated areas and on islands can remain the same. Communities that tuition students to high schools outside their districts would retain that option.

Under the proposal, the Department of Education has until July 15 to conduct briefings with educators in each of the 26 vocational regions to outline the methods needed to pursue consolidation. That meeting schedule will be determined next week, Connerty-Marin said.

Locally, communities will have until Dec. 15 to submit merger plans to the department. Local referendums on the expanded districts must be conducted by Jan. 15.

“It’s absolutely aggressive, there’s no question about it,” Connerty-Marin said of the consolidation timetable. “Everything is in place to move forward on this. The political reality is it’s better to push forward and get it done.”

He said the referendum elections could be postponed until June 10 next year, provided the department is convinced the communities were working hard toward consolidation and not simply dragging their feet.

“If a district does all the preliminary work in good faith and feels it can’t vote in January, they can request to hold the vote in June,” Connerty-Marin said.

He added that the January elections would be paid for by the state. If the vote is delayed until June, the local communities will have to cover the cost.

“There is some small financial incentive,” he said.