It's probably from the mid eighties. It takes place at a summer camp. At one point some of the kids think that one of the counselors/camp workers is a killer. The guy comes in with what appears to be blood dripping off of his hatchet. They later find out that it was paint. The guy dips his hatchet in it and slings it at the canvas or whatever he was painting on. That's really all I can remember.

The Burning?

I'm pretty sure it wan't a horror film.

I know that's not The Burning.

Meatballs? Or a Meatballs sequel?

POISON IVY (1985) with Michael J. Fox.

Yup, that sounds right to me as well.
I used to watch that all the time when I was a kid.

i think it is safe to say that any G rated camp movie from the 80's that seems to always be forgotten, the answer will be Poison Ivy with Michal J. Fox and Nancy McKeon. though, i did think there was a paint scene similar to OP in The Burning.

I guess that's it, although I don't remember Michael J. Fox being in it. It doesn't appear to be on dvd and I couldn't find a trailer for it. I'll have to do a better search later.

From wikipedia description:

"Maintenance man Walter carries around a red-stained axe and is rumored to be a murderer."

Here's a quasi-trailer for it:

http://www.youtube.com/watch?v=-6-yfXmZepI

And the scene where the maintenance worker first appears:

http://www.youtube.com/watch?v=shEqt-9QOjk