Maine School Management Association

49 Community Drive

Augusta, ME 04330






Legislative Bulletin




TO:                  Superintendents, Assistant Superintendents, MSBA Board of Directors, and Legislative Contact People


FROM:            Dale A. Douglass, Executive Director

Ronald T. Barker, Deputy Executive Director


DATE:             June 11, 2007


RE:                   Summary of Approved School Consolidation Legislation



As you know, the final legislation on school consolidation was enacted as part of the State Budget last week.  Attached is a memo that summarizes the most important aspects of this legislation. 


The legislation requires the Commissioner of Education to hold 26 regional meetings to explain the consolidation process by July 15, 2007.  We expect you will receive notice of these meetings very soon.  In the meantime, we anticipate there will be many questions and uncertainties surrounding the implementation of this new law.  To help address those questions, MSMA is working with Drummond Woodsum to plan briefings this summer to assist our member boards and superintendents. 


Please distribute this memo and attachment to all of your board members. 



MSMA Summary of the Approved School Consolidation Legislation

P.L. Chapter 240, Part XXXX



80 regional school unit mandate eased (RSUs).  The final legislation expresses the “intent” that schools be consolidated into 80 regional units or into a number of units that meets the administrative efficiencies established by statute.  The law also now prohibits the Commissioner of Education from making a finding that a consolidation plan does not meet the requirements of the law solely on the ground that it would cause the number of school administrative units to exceed 80. This means that the 80-unit maximum is not hard and fast. 


2,500 student minimum.  Each RSU must have at least 2,500 students unless circumstances justify an exception to that requirement.  When circumstances justify an exception to the requirement, the unit must serve at least 1,200 students, except for offshore islands and tribal schools. 


Exceptions for school units under 2,500 students.  The Commissioner may grant exceptions to the 2,500 student minimum based on the following factors:


·                Geography;

·                Demographics;

·                Economics;

·                Transportation;

·                Population Density, or

·                Other unique circumstances.


All resulting units, other than offshore islands and tribal schools, must have at least 1,200 students.



Timelines eased.  Existing school units must pick their partners by August 31, 2007 and must “exercise due diligence and good faith” to submit their proposed reorganization plans to the Commissioner by December 1, 2007.  The Commissioner must review the plans and notify the school boards of the existing units if the plan is not approved by December 15, 2007, with specific suggestions for modification of the plan and written findings providing the specific reasons why the plan did not meet the requirements.  A referendum on the final approved plan  must be held on January 15, 2008, for implementation July 1, 2008 if approved by the voters.  If, however, a plan developed with due diligence and good faith is received by the Commissioner or revised after December 15, 2007, the referendum need not be held until June 10, 2008, for implementation July 1, 2009.   If the plan fails at referendum, the planning process must be restarted.  The plan must be approved by the voters at referendum by November 4, 2008 and implemented July 1, 2009 in order to avoid the imposition of penalties.


Who must engage in the reorganization planning process?   By August 31, 2007, each school administrative unit shall file a notice of intent with the Commissioner.  School administrative units that do not fit within one of the exceptions must state their intent to engage in planning and negotiations with other school administrative units for the purpose of forming a regional school unit.  School units that do fit within one of the exceptions must file a notice of intent to submit an alternative plan addressing how the school unit will reorganize administrative functions, duties and noninstructional personnel so that the projected expenditures for system administration, transportation, special education and facilities and maintenance in FY 2008-09 will not have an adverse impact on the instructional program. 


Units that may submit an alternative plan:


·                An offshore island;

·                A school operated by a tribal school committee;

·                A school administrative unit that serves more than 2,500 students;

·                A school administrative unit that serves 1,200 to 2,500 students where circumstances justify an exception to the requirement of 2,500 students.

·                A school unit designated by the Commissioner as an “efficient, high-performing district.” 

·                A school unit that, after performing due diligence to become part of a unit with 2,500 students, is unable to achieve the goal due to the decision of nearby school administrative units to participate in a different regional unit. 


What is an “efficient, high performing district”?


A school administrative unit may avoid consolidation if (a) it contains at least 3 schools identified as “higher performing” in the May 2007 Maine Education Policy Research Institute report “The Identification of Higher and Lower Performing Maine Schools”; and (b) its reported 2005-2006 per-pupil expenditures for system administration represent less than 4% of its total per-pupil expenditures.


Who prepares the reorganization plans?  The final legislation is not entirely clear on this point.  The law requires that municipalities that intend to engage in planning and negotiation to create a regional school unit shall form a reorganization planning committee that meets guidelines to be issued by the Commissioner and that includes representatives of school administrative units, municipalities and the general public. The law goes on to say that “each school administrative unit” shall submit its plan by December 1, 2007.  The law also says that, in developing a reorganization plan, the “governing bodies” (school boards) of the existing school administrative units should meet certain parameters.  Under this framework, it appears that the existing school units and their school boards are responsible for preparing and submitting that plans, and the reorganization planning committees serve only an advisory function. 


Mandated reductions in State subsidy.  The plan saves $36.5 million by mandating an inflation adjusted 50% cut in State subsidy for system administration and 5% cuts in State subsidy for special education, transportation and buildings and maintenance.


Local expenditures.  The final legislation eliminated the provision that would have mandated an inflation-adjusted 50% cut in local spending for school system administration and 5% cuts in local expenditures for special education, transportation, and buildings and maintenance.  Instead, the law now says that the consolidation plans and the alternative plans must address how the school unit will reorganize administrative functions, duties and noninstructional personnel so that the projected expenditures in fiscal year 2008-09 for system administration, transportation, special education and facilities and maintenance will not have an adverse impact on the instructional program. 


State-mandated budget format.  The legislation requires a new State mandated line-item budget format with 11 expenditure articles, including separate articles for “system administration” and “school administration.”


State-mandated budget adoption process.  The legislation requires all school units, including Maine’s larger municipalities, to employ the budget validation referendum method for adoption of school budgets.  This process requires a budget meeting of the legislative body of the school unit followed 10 days later by a “validation” referendum.  In RSUs, the legislative body will be the voters.  In municipal school units with a chartered form of government, the legislative body is the body designated by charter, which may be the council, voters, or a representative town meeting. 


State-mandated financial penalties.  The penalties for failure to meet the requirements of the law contained in the Appropriations plan were reduced considerably in the final legislation, but an additional significant penalty was added.  The penalties are:


·                the total cost of education is reduced by reducing the cost component for system administration by half;

·                the minimum state EPS allocation, which is for low-receiving units, will be reduced by 50%;

·                the school unit is not eligible for a transition adjustment;

·                the school unit receives less favorable consideration of approval and funding for school construction.


The new penalty will change the local share full-value education mill rate from 45% to 46.14% in fiscal year 2009-10 and thereafter.


State-mandated minimum local mill rate.  The legislation mandates a 2 mill minimum local mill rate for education for municipalities in RSUs.  The proceeds above the municipality’s total cost of education are apportioned to the other municipalities in the RSU.


State-mandated ballot information statements.  The legislation includes mandated information statements on the ballots for approval of the reorganization plans and the ballots for the budget validation referenda. 


Cost sharing.  Under the new legislation, costs that are recognized under the EPS formula are shared in the same manner as they are under current law, except that the legislation establishes a new minimum required local contribution of two mills.  Any additional funds collected by an RSU as a result of this new minimum mill rate will be redistributed proportionately to the other municipalities in the RSU, and will result in a corresponding reduction in their full-value education mill rate.  Under the new legislation, additional local funds will be shared among the member municipalities of an RSU in the same proportion as each municipality’s required local contribution to the RSU’s EPS costs.  Exceptions to this new State-mandated cost sharing formula for additional local funds are provided for school administrative units whose cost-sharing formulas were previously established pursuant to private and special law and/or the cost sharing transition provisions of LD 1.


School unions are eliminated.  The legislation eliminates school unions as an option for school consolidation.


School choice.  The general statement of policy in the legislation provides for “the preservation of opportunities for choice of schools.”  Specifically, regional school units will be bound by tuition contracts for secondary students that were negotiated by the previous education unit, and, after a contract expires, students who had in their previous education unit the option to attend secondary school in a different unit will continue to have that option.  Due to some ambiguity in the language as enacted, the choices for students in existing units that do not have all 13 grades, that have no tuition contracts, and that become part of K-12 RSUs are less clear. 


Local school committees permitted.  The legislation provides that the consolidation plans may establish local school committees and specify their powers and duties.  The final version eliminated a previous requirement that these powers and duties must not be in conflict with other provisions in Title 20-A.  The legislation also authorizes RSU boards to create local school committees after consolidation has been implemented.


Municipal funding of K-8 schools.  The final legislation includes a provision allowing a municipality within a regional school unit to raise money and direct the spending of the funds, to a school serving children from kindergarten to no higher than grade 8.  This means that individual towns can raise additional local funds to spend on their own elementary schools. 


Collaboration is authorized.  The legislation authorizes collaboration among school units and with other levels of government to provide for shared delivery of administrative, instructional, and non-instructional services.


School closings.  The legislation requires a 2/3 vote of an RSU governing body to initiate a school closing.  The municipality may vote to keep the school open but must bear the additional costs of doing so.


Transfer of school property and school funds to RSUs.  The legislation provides for the transfer of school property and existing school balances to the new RSUs.  The RSUs assume indebtedness for State-approved school construction projects.  Assumption of local only debt by an RSU is optional.  The plan must also determine the disposition of existing reserve funds and trust funds. 


Employees.  All employees of school administrative units, including teachers and superintendents, will be transferred to the new regional school units. 


Collective bargaining.  All existing collective bargaining agreements will be assumed by the new regional school units and will stay in effect until their expiration dates, unless the bargaining agent and the regional school board negotiate a new agreement.  The law provides somewhat complicated mechanism for merging existing bargaining units after the regional school units are formed.