Gov. Jim Doyle is preparing a far-reaching public school funding reform that could provide more accountable and cost-effective teaching for students but that would also loosen protections for property taxpayers.

By next fall, the Democratic governor said he hopes to have a bill before lawmakers that would provide districts with a voluntary method to move away from the state's revenue caps imposed on schools since 1993. Critics say the caps have failed to keep up with schools' costs and forced cuts in services.

The proposed moves could lead to political fireworks, since they would change benefits supported by teachers unions and remove limits on taxes favored by Republicans and taxpayer groups.

"Where I'm heading on this is a system by which school districts are able to come out from under the caps but they can do it only with a pathway," Doyle said Wednesday in a meeting with the Wisconsin State Journal editorial board. "It's something in the next couple months that we're going to put forward and it's deserving of a huge discussion in the state."

Under Doyle's plan, the state's per pupil revenue caps would remain on districts that can't or don't want to meet the new requirements. In his budget proposed Tuesday, Doyle also is proposing another major change — ending the "qualified economic offer," or QEO, which allows school districts to impose a minimum wage-and-benefit increase in union contracts of 3.8 percent if bargaining fails to produce an agreement.

The state's school revenue caps currently limit how much total money schools can collect for each student from both state aid and local property taxes. The caps rise each year with inflation, and this year's per-pupil increase was $275 for a statewide average of $9,607, according to the Legislature's budget office. The caps are part of a key state system to hold down school property taxes along with the QEO and strong state aids.

From Republican lawmakers to the state teachers union, reaction to Doyle's proposal included both applause and concern.

Rep. Brett Davis, R-Oregon, the ranking minority member on the Assembly education committee, praised Doyle for seeking more accountability for schools but said his proposal would lead to property taxes rising too much.

"I give the governor credit for taking that piece on," Davis said of the measures. "But we are playing with fire if we are talking about eliminating the revenue caps because these efficiencies that are in there aren't nearly enough to protect property taxpayers."

To avoid the revenue caps, Doyle's plan would require districts to:

• Join together for the purposes of negotiating union contracts

• Make employees use the state health plan unless the school district already has a plan that is cheaper

• Require schools to agree to a list of practices that would improve student performance

• Provide compensation for teachers that better reflects the needs of individual schools such as those in rural districts that struggle to attract teachers for some subjects

Doyle said his proposals on best practices for schools would draw on the work of UW-Madison professor Allan Odden, co-director of the Consortium for Policy Research in Education.

Odden said Doyle's plan would be a good compromise because it would allow school districts more money but also ensure that it was better spent. Odden said recommendations of his group included setting sharply higher expectations for student achievement, giving small-group tutoring to struggling students and more testing of students by teachers beforehand to develop their curriculum.

Todd Berry, president of the Wisconsin Taxpayers Alliance, said that teachers' benefits in the state are currently among some of the most generous in the country. Requiring districts to offer the state plan would lower benefit costs for some districts, he said.

Mary Bell, president of the Wisconsin Education Association Council, welcomed Doyle's proposal, calling it "well worth talking about." But she said that teachers would be concerned about changes to their health care. That's because since the 1990s the QEO, when imposed, has had the effect of making teachers' benefits rise at a faster rate than their salaries by devoting most of the 3.8 percent minimum increase to benefits.

Many state teachers also are currently insured through WEA Trust, which was created by WEAC.

Joe Quick, lobbyist for the Madison School District, praised Doyle for trying to fix "a current system that is not working." But he said it was unfair for Doyle to try to remove the QEO, which seeks to hold down teacher pay — schools' largest cost — before allowing districts to exceed the revenue caps.

John Ashley, executive director of the Wisconsin Association of School Boards, said he wanted to see more details of the governor's plan. But he said requiring districts to band together to bargain with unions would weaken local control of schools and, without the QEO, might make it easier for unions to bargain for higher salaries.