As legislators look to rework the troubled school district reorganization law, one of the components of that law which has become the subject of some debate is the so-called “budget validation process.” This method of school budget approval has been an option for school districts since it was put into law in 1999 and is used by three school administrative districts, including two in the Bangor area.

The new school district reorganization law requires that all school districts in Maine begin using this budget approval procedure, starting with the budgets being prepared for the 2008-09 school year.

The process itself is a relatively simple one. A school district’s budget gets developed by the school board and is then presented at a public meeting where it is put to a vote. If approved at that meeting, the budget is then “validated” by a public referendum vote within the next 10 days. If the validation vote fails, the budget goes back to the school committee for more work and the process repeats itself until a budget is approved by voters.

As simple as it is, the process has come under considerable criticism. In testimony before the Legislature’s Education Committee, the Maine Education Association characterized the process as being “excessive, costly, and burdensome,” a sentiment shared by the Maine School Superintendents Association, which called the budget process “costly and cumbersome.”

To voters, though, the budget referendum process has proven to be astoundingly popular. The law requires that the validation procedure itself goes before voters for approval every three years, and in the three SADs that use the process that approval was overwhelming.

In 2002, voters in SAD 43, in the Mexico area, became the first to use the budget referendum process. Three years later, they voted to continue its use by a ratio greater than 3-to-1. The same result occurred in SAD 63, in the Holden area, which approved the continued use of the budget validation process in 2006 by a similar ratio.

In the Hampden area’s SAD 22, which adopted the process in 2003 by a slim 5 percent margin, the vote to continue using it was an overwhelming 1,114 in favor to 195 opposed.

SAD 22’s superintendent was quoted by the Bangor Daily News as saying that the vote made it “very clear that people want to embrace the current referendum validation process.”

Why has the budget validation process proved to be so popular in the school districts where it has been implemented? Certainly the greater voice it provides taxpayers is appealing, but it may also be that the process is remarkably effective at slowing the otherwise steady growth of school budgets.

In a new research report, The Maine Heritage Policy Center analyzed trends in school budgeting in the three SADs that use the budget validation process. In the five years before the use of the new budget process, school budgets in these three SADs grew at an average annual rate of 4.16 percent.

The budget validation process was first used by all three SADs in 2004 to approve the school budgets for the 2004-05 school year. Those budgets grew by an average of only 3.71 percent. A year later, the 2005-06 budgets of the three SADs, all of which used the budget validation process again, grew by only 2.59 percent, on average.

This slowing of school budget growth resulted in real savings. Had the 2004-05 budgets of these three SADs grown at the 4.16 percent rate, as they did before the enactment of the budget validation process, it would have cost taxpayers an additional $720,000 across the three districts.

Budget growth in these three SADs is also well below the state average. At the same time that the budgets of the three SADs using the budget validation process grew only 2.59 percent, the average budget growth for school districts statewide was 4.6 percent. That 4.6 percent increase resulted in more than $88 million in increased spending statewide.

Had state average school budget growth over that same period been held to the 2.59 percent average achieved by the three SADs using the budget validation process, Maine taxpayers would have saved almost $40 million.

In Augusta, though, the budget validation process has been criticized as being unworkable and unnecessary. Proposals have been put forward to either postpone the requirement that districts use the process or remove the budget referendum mandate altogether.

The evidence shows, however, that where the process has been used, it is not only overwhelmingly popular with voters, it leads to substantial savings – savings well above whatever additional costs the process itself may impose.

Clearly the additional budget oversight accorded voters by the budget validation process must remain a central component of the school district reorganization effort if Maine is ever to see any meaningful school budget savings in the years ahead.

Stephen Bowen is the education policy director at the Maine Heritage Policy Center. His report on the budget validation process is available at www.mainepolicy.org.