AUGUSTA (AP) – A bipartisan group of lawmakers named by House and Senate leaders outlined an agreement with representatives of community officials and teachers Tuesday that they said could settle a ballot battle over education funding.

The Baldacci administration, however, responded with little more than a shrug.

The so-called Working Group of legislators declared its support for an immediate increase in local school aid of $40 million as a step toward boosting the state share of local school costs to 55 percent in 2010.

In return, officials of the Maine Municipal Association and the Maine Education Association said they could withdraw their support for a June referendum question that would require the state to raise its share to the 55 percent level immediately, at a cost pegged at around $250 million.

“With the agreement of the Legislature to implement the working group’s recommendations, the Maine Municipal Association and the Maine Education Association will withdraw their support for the June referendum,” MEA spokesman Steve Crouse said in a statement.

A key adviser to the governor, State Planning Officer Director Martha Freeman, said the Baldacci administration welcomed the group’s backing of an Essential Programs and Services school funding model but that referendum supporters had yet to offer assurances that more aid to local schools would restrain local property taxes.

Key issues, she said, are “how you fund it and guaranteeing property tax relief,” adding that the governor was pleased to see bipartisan involvement in discussions.

Working Group members themselves, meanwhile, acknowledged it was unclear where all of the money they would be seeking for an initial increase in education funding would come from.

“While the Working Group has reached consensus on its recommendation, it recognizes there are a number of challenges to achieving these goals,” the legislative group wrote to Senate President Beverly Daggett and House Speaker Patrick Colwell.

“In addition to proposals regarding school funding, the Working Group also discussed several strategies for reducing property taxes. The Working Group has not reached consensus on those options,” the letter said.

Listed options included “homestead tax relief proposals, revenue sharing reform, realignment of the state’s major revenue sources, costs savings through reorganization and spending growth limitations at all levels of government.”

Inconclusive voting last November kept the MMA-backed plan from becoming law but killed off a more gradual competing measure supported by Baldacci and the Legislature.

Earlier this month, Baldacci weighed back in on the multi-sided debate over taxes and school funding, proposing an additional $25 million in school funding for the fiscal year that begins on July 1 and an additional $25 million for an expanded circuit-breaker program to aid some lower- and middle-income property taxpayers.

Baldacci also called for caps on municipal and county budgets and an end to the state’s homestead exemption program.

Now also awaiting a statewide vote is still another proposal that would cap property taxes at $10 per $1,000 of assessed value, based on values in 1996-97.

On Monday, the House and Senate voted to ask the state supreme court for an advisory opinion on such a tax cap’s constitutionality. Questions about key provisions of the pending proposal have been raised by Attorney General Steven Rowe.

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