By JIM BARON

PROVIDENCE — The Caruolo Act, which has several local communities fighting in court with their own school systems spending money that neither side says it has enough of, was both bashed and defended Tuesday before the House Finance Committee.

“It's time has come and gone,” declared Pawtucket Rep. Peter Kilmartin, author of one of the two bills currently before the General Assembly that would abolish the 1995 law that allows school committies to go to court if they believe they have not been allocated sufficient money to operate school systems up to the specifications of law.
Kilmartin's home city of Pawtucket is currently enmeshed in what have come to be called a “Caruolo action” and Woonsocket's school committee filed a suit against the city just over a week ago. West Warwick officials are currently taking turns on the witness stand in Kent County Superior Court fighting a Caruolo lawsuit.
Kilmartin told the House finance panel that it is time to “eliminate or tweak it in a way that is fair to all parties involved.”
But Warwick Rep. Alfred Gemma said “you can't tweak an Edsel. It was dead at birth. It is time to bury it.
The testimony at Tuesday's lengthy hearing demonstrated that this is one of those issues that occur from time to time
that could lead to scorched-earth remedies in attempts to address it.
Supporters of the Caruolo Act, including teachers unions and the Rhode Island Association of School Committees want to keep the law, but eliminate the three-year old law that caps increases in local property tax levies, known in Statehouse jargon as “3050.” That law reduces the amount by which municipalities are allowed to hike their property taxes. It was 5.5 percent when the bill passed and it ratchets down by a quarter percent each year. The cap this year is 4.75 percent.
Dan Beardsley, executive director of the League of Cities and Towns said the parade of mayors and town managers who testified in favor of junking Caruolo “would never have been here askeing for a repeal of the law if you didn't pass 3050.”
“3050 is killing education as we know it,” testified Henry Boeniger, who noted that the bill called for a statewide school funding formula that has never been adopted and doesn't seem to be under serious consideration this year, either.
Another suggestion that seemed to be getting some traction at the finance hearing was abolishing elected school committees in favor of having members appointed by the mayors or town administrators of the various communities. Providence's school committee is currently appointed by the mayor.
Pawtucket Mayor James Doyle offered a less drastic solution than eliminating the school committees: he suggested they be required to raise their own taxes to fund school operations. “Systems don't work where the people who get to spend the money are not responsible for raising it. The state could either give cities and towns more control over school spending, or could require school committees to look the taxpayers in the eye and ask them for the money to run their school departments, with the 3050 cap in place.”
Doyle also suggested that the state prevent school departments by law from running deficits.
Noting that his city “narrowly avoided bankruptcy” last month, Doyle pointed out how Pawtucket has eliminated part-time employees, axed 40 full-time positions since last year and has negotiated contracts with police and fire unions with hundreds of thousands of dollars worth of givebacks. “At the same time, however,” the mayor said, we are faced with the impending loss of $2.1 million in revenue sharing in fiscal year 2010, a reduction in auto values will result in a loss of revenue of about $1 million and a (current year) school department deficit of $5.3 million  for which we are currently facing a Caruolo action. This is the fourth year in a row in which the school department finished the year with a deficit. While we are working on a plan to overcome all of this, I and other city offficials are hearing that the school department may be projecting a deficit of about $8 million in fiscal year 2010 (which starts July 1). We haven't seen anything in writing yet, so we hope that's not true. If it is true, I can tell you in all honesty that there is no plan in place for funding it.”
Doyle has protested in the past that, while municipalities and the state share the cost of the original school budget, if the schools win a Caruolo action in court, all of the additional money comes from the property taxpayer, the state does not give any new funds. 
Warwick Mayor Scott Avedesian complained to the committee that he can not even get the school committee in his city to give him figures on the budget situation until it is too late. Last year, he said, the schools did not inform the city there was a budget deficit until after the budget year was over, so it was too late to come up with a plan to avoid ending in the red.
“This committee has had Caruolo in front of it for the last three years,” Finance Chairman Steven Costantino said. “The challenge is, what's the alternative?”
A bill sponsored by Kilmartin and West Warwick Rep. Patricia Serpa received a lukewarm reception. It calls for the presiding justice of the Superior Court to appoint a special master who would commission an audit of both the school committee's budget and the municipality's tax assessment, appraisal, exemption classification and tax collection practices.
After finding facts on a 12-point checklist of the school and community finances, the special master will write an opinion to the presiding justice who will then issue a decision. If the schools are not satisfied with that decision, they may then file a Caruolo action, Serpa said, but it would be held to the facts found by the special master, making it difficult to win an award higher than what the court would have given.
Tim Duffy of the RI Association of School Committees said after the hearing that it is disingenuous of communities to claim they have no more money for schools, when they give tax breaks to lure large companies for economic development and have a slew of other tax exemptions. He said in communities in other states where school committees raise their own taxes, they are empowered to not allow the exemptions offered by the municipalities.