With a deadline to act looming, Gov. John Lynch announced yesterday that he would allow a school funding plan to become law, but without his signature.

His decision paves the way for shifts in the way the state distributes its education dollars, and likely brings the state one step closer to fulfilling court requirements. The New Hampshire Supreme Court has ruled that the state must pay for the full cost of an adequate education for every child in every district, and the funding plan's backers say it complies with the constitution.

Lynch's announcement ended weeks of speculation about his intentions and assuaged the bill's Democratic supporters. But though Lynch didn't veto the bill, he made his distaste perfectly clear.

"This legislation is not my preferred solution," Lynch, a Democrat, said in a statement yesterday afternoon. "I believe New Hampshire should direct more education aid to communities with greater needs. That is not possible, however, under the constraints of the Supreme Court's decisions.

"The bill meets the court-imposed deadline for establishing a cost for an adequate education, which allows us to keep moving forward on school funding," Lynch added. "That is why I will allow it to become law."

For more than a year, Lynch lobbied for a constitutional amendment to allow lawmakers to bypass portions of the Supreme Court rulings and distribute more money to needy communities and less (or nothing) to wealthier ones. Last month, the House overwhelmingly rejected an amendment. It was the second year in a row that an amendment met clear defeat in that chamber, a point that Lynch acknowledged yesterday.

Without an amendment, lawmakers must comply with the court or risk future court rulings. With the school funding plan now becoming law, lawmakers have next year to determine how to pay for the plan, which would require the state to pay a base amount of money for every public school student. Last year, lawmakers met a court-ordered deadline to define an adequate education.

If progress stalls, the group of communities that recently sued the state over its school funding system could ask the court to intervene.

For all the controversy surrounding the school funding plan, most districts won't see dramatic changes in state aid for several years. When the bill landed in the House, lawmakers added a two-year transition period before the plan would take full effect. During the transition, communities due to lose money wouldn't see a decline in state aid, and communities due to receive more money under the plan would see their increases capped at 15 percent.

And because the bill won't take effect until the 2009-2010 school year, lawmakers could tweak it in the coming legislative session.

"The legislature has to change it next year," said Charlie Arlinghaus, president of the Josiah Bartlett Center for Public Policy and the former executive director of the New Hampshire GOP. "They have to pass something within the terms of its own budget."

For the most part, reaction to Lynch's decision fell into one of two camps.

Leading Democrats - among them Senate President Sylvia Larsen of Concord and House Speaker Terie Norelli of Portsmouth - applauded Lynch for allowing the plan to become law. For the plan's sponsors, who worked on the issue for months, yesterday brought relief.

"My biggest fear was he'd veto it," said Rep. Judith Reever, a Laconia Democrat who co-sponsored the plan. "I was really frightened that this was in fact going to fail at the last moment."

Sen. Iris Estabrook, a Durham Democrat who sponsored the plan, acknowledged in a statement that, "I understand that the governor would have preferred to be working with a constitutional amendment." Estabrook added, however, that "the governor also understands that until such an amendment is successful, we have a collective duty to follow the law as it is."

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