Logging off? GOP duo asks if state can break laptop pact

Wednesday, July 10, 2002

By PAUL CARRIER, Portland Press Herald Writer

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IN DEPTH: LAPTOPS

AUGUSTA — Two state lawmakers have asked Attorney General Steven Rowe if the state could break its laptops-for-students contract with Apple Computer without incurring any financial liability. Reps. Philip Cressey Jr. of Baldwin and Brian Duprey of Hampden, both Republicans, posed that question Tuesday in a letter suggesting that the Legislature might want to get out of the Apple contract because of the state's budget shortfall.

"Given the severity of the shortfall and the need to make informed policy choices, we ask for an opinion on the state's liability vis-a-vis this contract," the lawmakers wrote. "Your opinion would provide some insight into the possible outcomes should the Legislature decide that, given our fiscal crisis, the laptop funds could be better spent elsewhere."

Cressey and Duprey do not hold leadership positions in the Legislature. In addition, neither sits on the Legislature's Education Committee or on its budget-writing Appropriations Committee, so it remains unclear how many legislators share their views on the contract.

The state has a four-year, $37 million contract with Apple to provide 36,000 iBook laptops to seventh- and eighth-grade students and their teachers at all public schools across the state. Nine pilot schools received laptops this spring, and seventh-graders statewide are supposed to get them in the upcoming school year. Eighth-graders statewide would get them the following year.

But state government faces a substantial budget shortfall that has some lawmakers, including Cressey and Baldwin, wondering if the Legislature should honor the Apple contract or divert the money to meet other needs. Unofficial revenue figures for the fiscal year that ended June 30 show that state tax collections fell about $93 million short of projections, and a substantial deficit is expected this year as well.

The latest budget numbers suggest that the shortfall isn't as bad as an earlier prediction of $110 million to $115 million per year, but it's still bad enough to require substantial spending cuts. Gov. Angus King balanced last year's budget, largely by raiding the state's savings account. Now state officials are struggling to fill the projected hole in this year's budget.

King has made or proposed spending cuts, some of which would require approval by the Legislature. The governor has said he probably will call the Legislature into special session later this year, but no date has been set.

King already has cut $10 million from state funding for local schools in the coming year, and he has asked the Legislature to shrink, but not eliminate, a fund that the state created to help pay the Apple contract. Some lawmakers question whether the state should be cutting funding to schools for general expenses while preserving King's treasured laptop program.

"I'd rather have the cash than the laptops," said Duprey, whose school district has been hit with an $85,000 cut in funding because of the state deficit. "I just want to see if (breaking the contract) is an option for us."

The state has set aside $25 million to help buy iBooks. State officials also have access to supplemental funds, including a $1 million training grant from the Gates Foundation, a $1 million pledge from MBNA and more than $2 million a year from a fund administered by the state Public Utilities Commission.

King wants the Legislature to take $10 million from the $25 million and use it to help balance the state budget. The remaining $15 million would provide enough money to equip seventh- and eighth-graders statewide with laptops over the next two school years, but the Legislature would have to put up more money later to pay the rest of the bill.

The state has received 2,868 iBooks - 868 computers for the nine pilot schools and 2,000 computers for seventh-grade teachers. Apple plans to deliver another 16,700 iBooks no later than the middle of next month, for seventh-grade students.

The Apple contract includes an escape clause that says the state "is not obligated to make payment under this agreement" if the money is not available, but that does not necessarily mean the state would be off the hook if it broke the contract.

That's because the agreement also says the state's failure to pay up "shall be deemed to be a default under this agreement." Whether that would trigger hefty penalties or fines for breach of contract is what Cressey and Duprey want to find out from Rowe. A spokesman for the attorney general said Tuesday that Rowe probably will respond to the lawmakers' letter "within a couple of weeks."

If Rowe concludes that the state can break the contract without having to pay penalties, that could build support in the Legislature for gutting the laptop fund, instead of shrinking it from $25 million to $15 million, as King has proposed.

But some lawmakers say that probably would not happen, for two reasons: One, the program already has been sharply scaled back since King proposed a $50 million plan two years ago; and two, the program already is under way, thanks to the spring startup at the pilot schools.

"This has some momentum," said Education Commissioner Duke Albanese. "We're moving to implementation. Let's see the effects on teaching and on learning."

Staff Writer Paul Carrier can be contacted at 622-7511 or at: pcarrier@pressherald.com

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