CHINA -- School Committee members don't know what's going to happen with their proposed eight-town regional school unit, negotiated in response to a state mandate, now that Waterville has pulled out.

They don't know how much state funding to expect next year, because state officials haven't sent preliminary figures.

However, China expects 2009 state funding for education will be equal to or less than this year's amount -- meaning an increase in local taxes, without any new local educational programs.

And they expect the new state-mandated budget process will complicate getting voters to approve the budget, once they have the information to prepare it. At Wednesday's meetings of the School and Budget committees, Gary Smith, director of business and assistant superintendent in School Union 52, shared a draft expenditure budget that totals $8.2 million.

The figure is an increase of $219,000, or 2.8 percent, over the current year.

Smith explained that, because China's state valuation has increased more than the state average and the number of students has declined, China's share of state education funding is unlikely to increase -- and may decrease. The state valuation, he and School Committee Chairman Charles Clark emphasized, is entirely separate from the almost-completed local property revaluation. Results of the local revaluation will determine each individual property owner's contribution to the total taxes the town needs to raise.

Depending on how much the Legislature approves for education and how that money is apportioned, Smith said the best-case scenario for China is flat funding.

Another blow to the revenue side comes from changes in federal Medicaid rules: Smith is counting on no Medicaid money in 2009.

His preliminary estimate is that funding the $8.2 million budget will require an additional $400,000 to $425,000 from local taxes.

Even if the budget were held at the 2008 level, he said town taxpayers would need to provide another $200,000.

If China gets less state money than he expects, the local contribution would increase correspondingly.

Once state figures are available, perhaps in April, the School Committee will prepare a final budget to be submitted to voters.

State law requires a two-step approval process:

n an open town meeting at which 11 expenditure articles can be amended, either up or down, and approved by majority vote, followed within 10 days by

n a written-ballot referendum at which voters either approve or reject the total figure that comes out of the open meeting.

China officials want the referendum on June 10, coinciding with state primary elections. The open town meeting, which requires a quorum of 191 voters, must be between May 27 and June 9. "Can that one [referendum] vote take away everything that was done at the town meeting?" resident Jenny Clair asked incredulously.

Yes, Smith and Clark said.

If voters reject the budget at referendum, the process starts over, with another open meeting followed by another referendum.

In the interim, 2008 budget figures would remain in effect.

School officials reviewed the budget with five members of the Budget Committee, explaining that no decisions can be made yet. No action was taken on regionalization, either. Smith said the School Union 52 board, consisting of School Committee members from China, Vassalboro and Winslow, meets at 6 p.m. March 4 at China Middle School.

, so the three boards can ponder their next moves.

The regional unit Waterville has decided not to join includes Union 52 and School Administrative District 47 -- Belgrade, Oakland, Rome and Sidney. Only Waterville wants to pull out; but other towns' officials have concerns, especially about costs of the proposed unit.