An Act to Implement School Funding Based on Essential Programs and Services, as the basis for determining the total cost ofK-12 public education. However, this bill differs from PL 2003, c. 504 in that it requires the State's share to increase to 55% by fiscal year 2009-10 versus the 50% requirement in PL 2003, c. 504. This bill also provides for the calculation of a full value education mill rate that is required to raise the total maximum local share of the cost offunding K-12 education and establishes a 10 mill cap on the full value education mill rate. The Department of Education estimates the mill rate expectation to be 8.55 mills in fiscal year 2005-06. This bill also provides for a transition adjustment through fiscal year 2009-10 for municipalities that experience an adverse fiscal impact as a result of the phase-in of the essential programs and services model and the maximum local share mill rate expectation method of determining the local contribution of funding K-12 education. This bill proposes a transition adjustment amount of $1 0,000,000 in fiscal year 2005-06 with the amount declining in each successive year through fiscal year 2009-10. Since this legislation does not specify the transition amounts for fiscal years 2006-07 through fiscal year 2009-10, this fiscal note assumes that the transition adjustment declines evenly over the 5-year period. This fiscal note also assumes that the transition adjustment amounts are included in the estimated General Fund appropriation amounts needed to fund K-12 education based on the Essential Programs and Services model in this measure thereby affecting the distribution among individual school units. The impact to each local school unit can not be determined at this time. The following table provides estimates for the total State and Local Operating Cost of funding education based on the Essential Programs and Services model and provides a comparison of the General Fund appropriations that are estimated to be needed to fund the state's share of the cost offunding K-12 education based on the State's contribution reaching 50% in fiscal year 2009-10, as approved in Public Law 2003, c. 504, versus the 55% State contribution proposed in this legislation.
Maine Legislature, Session 121, LD 1629
Committee Amendment CA_E_H603 (House)
Amends: 20-A MRSA §15671, 20-A MRSA §15671-A, 20-A MRSA §15684, 20-A MRSA §15686, 5 MRSA §1677, 5 MRSA §1514-A, 5 MRSA §1664, 36 MRSA §4641-B

COMMITTEE 
AMENDMENT 
to 
H. P. 
1209, 
L.D. 
1629, 
"RESOLUTION, Proposing a Competing Measure under the Constitution 
of Maine To Create Municipal Service Districts To Reduce the Cost 
of Local 
Government, 
To 
Provide Property Tax Relief and To 
Increase Economic Competitiveness" 
Amend 
the 
resolution 
by 
striking 
out 
the 
title 
and 
substituting the following: 
'RESOLUTION, Proposing a Competing Measure under the Constitution 
of Maine To Reduce the Cost of Local Government through 55~ State 
Funding of Public Education, To Reduce State Taxes by Requiring a 
2/3 Vote To Raise Taxes, To Limit the Growth of State Spending to 
the 
Growth in State Personal 
Income 
and To Dedicate Excess 
Revenue To Provide Income Tax Relief' 
Further amend the resolution in the first indented paragraph 
after the title in the last 2 lines (page I, lines 5 and 6 in 
L.D.) 
by striking out 
the 
following: 
"to 
Enact the 
School 
Finance" and inserting in its place the following: 'To Enact the 
School Finance and Tax Reform' 
Further amend the resolution by striking out all of Parts A 
to D and inserting in their place the following: 
Page l-LR2165(6) 
COMMITTEE AMENDMENT 
~,(J" 
COMMITTEE AMENDMENT ,,(., to H.P. 1209, L.D. 1629 
'PART A 
Sec. A-I. 20-A MRSA §15671, sub-§7, ~B, as enacted by PL 2003, 
c. 504, Pt. A, §5, is amended to read: 
B. 
The annual targets for the state share percentage are as 
follows. 
(1) 
For fiscal year 2005-06, the target is 49%. 
(2) 
For fiscal year 2006-07, 
the target is 49T6§% 
50.5'?-o. 
(3) 
For fiscal year 2007-08, the target is 49Ta9% 52%. 
(4) 
For fiscal year 2008-09, 
the target is 49T7§% 
53.5°-&. 
(5) 
For fiscal year 2009-10 and succeeding years, the 
target is §9% ~. 
Sec. A-2. 20-A MRSA §15671-A is enacted to read: 
§1567l-A. 
Property tax contribution to public education 
1. 
Definitions. 
For the purposes of this section, unless 
the context otherwise indicates, the following terms have the 
following meanings. 
A. 
"Funding public education from kindergarten to grade 12" 
means the cost of funding essential programs and services as 
described in this chapter plus the total allocations for 
program cost. debt service costs and adjustments. 
B. 
"Local cost share expectation" means the maximum amount 
of money needed for the purpose of funding public education 
from kindergarten to grade 12 that may be derived from 
property tax. 
2. 
Local cost share elQ!ectation established. 
The local 
cost share expectation is established as follows. 
A. 
This 
paragraph 
applies 
to 
the 
local 
cost 
share 
expectation. 
Notwithstanding any other provision of law, 
with respect to the assessment of any property taxes for 
property tax years beginning on or after April 1, 
2005~ this 
subsection establishes the local cost share expectation that 
may be assessed on the value of property for the purpose of 
funding public education from kindergarten to_grade 12. 
The 
COmmissioner shall annually by February 1st notify each 
COMMITTEE AMENDMENT 
r~:~'< 
SO 
COMMITTEE AMENDMENT lib. to H.P. 1209, L.D. 1629 
school 
administrative 
unit 
of 
its 
local 
cost 
share 
expectation. 
Each 
superintendent 
shall 
report 
to 
the 
municipal officers whenever a school administrative unit is 
notified of the local cost share expectation or a 
change 
made in the local cost share expectation resulting from an 
adjustment. 
B. 
This 
paragraph 
applies 
to 
the 
calculation 
of 
the 
full-value education mill rate. 
For property tax years 
beginning on or after April 1, 200S, the commissioner shall 
calculate 
the 
full-value 
education 
mill 
rate 
that 
is 
required 
to 
raise 
the 
total 
of 
the 
local 
cost 
share 
expectation for funding public education from kindergarten 
to grade 12. 
The full-value education mill rate is derived 
by dividing 
the 
applicable 
tax 
year 
percentage 
of 
the 
projected cost of funding public education from kindergarten 
to grade 12 by the certified total state valuation for the 
year prior 
to 
the 
most 
recently certified total 
state 
valuation for all municipalities. 
The full-value education 
mill 
rate 
must 
decline 
over 
the 
period 
described 
in 
subparagraphs (1) to (S) and may not exceed 10.0 mills. 
The 
full-value education mill rate must be applied according to 
section lS688, 
subsection 3, 
paragraph A to determine 
a 
municipality's 
local 
cost share expectation. 
Full-value 
education mill 
rates 
must 
be 
derived according 
to 
the 
following schedule: 
3. 
process. 
(1) 
For the 
200S property tax year, 
the full-value 
education mill rate is the amount necessary to result 
in a 51% local share in fiscal year 200S-06; 
(2) 
For the 2006 property tax year, 
the full-value 
education mill rate is the amount necessary to result 
in a 49.5% local share in fiscal year 2006-07; 
(3) 
For the 
2007 property tax year, 
the full-value 
education mill rate is the amount necessary to result 
in a 48% local share in fiscal year 2007-08; 
(4) 
For the 2008 property tax year, 
the full-value 
education mill rate is the amount necessary to result 
in a 46.S% local share in fiscal year 2008-09; and 
(S) 
For the 
2009 property tax year and subsequent 
years, the full-value education mill rate is the amount 
necessary to result in a 45% local share in fiscal year 
2009-10 and subsequent years. 
Exceeding 
local 
cost 
share 
e~ctatiQn; referendum 
Beginning 
with 
the 
2009-10 
school 
budget, 
the 
COMMITTEE AMENDMENT 
a~'v 
,,, 
COMMITTEE AMENDMENT .~ to H.P. 1209, L.D. 1629 
legislative body of 
a 
school 
administrative unit 
may 
adopt 
property tax rates that exceed the local cost share expectation 
calculated under section 15688, subsection 3, paragraph A if that 
action is approved by the 
vot~rs of the school administrative 
uni t 
by 
referendum 
or 
the 
referendum 
validation 
processes 
authorized by sections 1305-B and 1701-B and the voters are 
properly notified as required by section 15617 or Title 30 A, 
section 2523 or 2551, as gpp1icable. 
Sec. A-3. 20-A MRSA §15684, sub-§3 is enacted to read: 
3. 
Repeal. 
This section is repealed on July 1, 2005. 
Sec. A·4. 20-A MRSA §15686, as enacted by PL 2003, c. 504, 
Pt. A, §6, is amended to read: 
§15686. 
Transition adjustment 
For each of the fiscal years described in section 15671, 
subsection 7, 
the 
commissioner 
shall establish 
a 
transition 
adjustment calculated to 
minimize 
the 
adverse fiscal 
impact 
ai~eet~y---Felatea---te 
thgt 
may 
be 
experienced 
by 
some 
municipalities gS 
a result of the phase-in of this Act. 
The 
transitiQn adjustment for a municipality must be directly related 
tQ the phase-in Qf essentigl prQgrgms gnd services and the local 
cQst 
shgre 
expectation 
method 
Qf 
determining 
the 
local 
contribution to 
the 
cQst 
Qf 
funding essential programs 
and 
services. 
The 
amount 
of this 
adjustment is estgblished at 
$10,000,000 fQr fiscgl yegr 2005-06 and must decline with each 
successive fiscal yearr--and--tae. 
The adjustments must end no 
later than fiscal year 2009-10. 
Sec. A·5. 20·A MRSA §15688 is enacted to read: 
§15688. 
Schoo1 administrative unit contribution to tota1 
cost of funding public education from kindergarten 
to grade 12 
1. 
School administrative unit: total cost. 
For each school 
administrative unit, the cQmmissioner shall annually determine 
the schoQl administrative unit's total cost of education. 
A 
schoQl administrative unit's total cQst of education must include: 
A. 
The school administrative unit's tQtal cost of funding 
essential programs gnd services subject to the transition 
percentages 
described 
in 
section 
15671, 
subsection 
, 
pgrggraph A; 
B. 
The program cost allocation as used in chapter 606; and 
COMMITTEE AMENDMENT 
,,~~iO, 
~,' 
COMMITTEE AMENDMENT "t, to H.P. 1209, L.D. 1629 
C. 
The debt service allocation as used in chapter 606. 
2. 
Member municipalities in school administrative districts 
or 
communitr 
school 
districts: 
total 
costs. 
For 
each 
municipality that is a member of a school administrative district 
or community school district, the commissioner shall annually 
determine 
each 
municipality's 
total 
cost 
of 
education. 
A 
municipality's 
total 
cost 
of 
education 
is 
the 
school 
administrative district's or community school district's total 
cost of fundin9 times the percentage that the municipality's most 
recent 
calengar 
year 
average 
pu,pils 
is 
to 
the 
school 
administrative district's or community school district's most 
recent calengar year average pupils. 
3. 
School 
administrative unit: 
contribution. 
For 
each 
school 
agministrative 
unit, 
the 
commissioner 
shall 
annually 
determine 
the 
school 
administrative 
unit's 
contribu,tion 
in 
accordance with the following. 
A. 
The school administrative unit's contribution to the 
total cost of education is the lesser of: 
(1) 
The tQtal CQst for each municipality as described 
in su,bsectiQn 1 Qr 2: or 
(2) 
The total of the full-value edu,cation mill rate 
gerived in sectiQn l5671-A, subsection 2 multiplied by 
the certified state valuation for the year prior to the 
most 
recently 
certified 
state 
valuation 
fQr 
each 
municipality in the school administrative unit. 
B. 
The school administrative unit's state contribu,tion to 
the total cost of egucatiQn is the total cost of educatiQn 
calcu,lateg 
pursuant 
tQ 
su,bsection 
less 
the 
school 
administrative u,nit's contribution calcu,lated pursu,ant to 
paragraph A. 
4. 
Effective date. 
This section takes effect July 1, 2005. 
Sec. A·6. Basis for funding costs of education from kindergarten to 
grade 12. 
Notwithstanding any other provision of law, beginning 
in fiscal year 2005-06, funding of the costs of educatiQn from 
kindergarten to grade 12 must be based on the cost Qf providing 
essential programs and services as described in the Maine Revised 
Statutes, Title 20-A, chapter 606-B. 
PARTB 
Sec. B-1. 5 MRSA §1677 is enacted to read: 
COMMITTEE AMENDMENT 
t." 
~~ 
COMMITTEE AMENDMENT ,,(, to H.P. 1209, L.D. 1629 
§1677. 
Enactment of or increase in tax or certain license fees 
The 
following provisions 
apply to 
the 
enactment 
of 
or 
increase in a tax or certain license fees. 
1. 
Enactment. 
A tax or license fee assessed by the State 
may not be enacted except by vote of at least 2/3 of all members 
of each House of the Legislature. 
For purposes of this section, 
"license 
fee" 
means 
license 
and 
registration fees 
that are 
assessed by the State in connection with the operation of motor 
vehicles on the roads and highways of the State or for the 
privilege of hunting or fishing. including commercial fishing. in 
the State; 
2. 
Increase. 
A tax or license fee assessed by the State 
may not be increased except by vote of at least 2/3 of all 
members of each House of the Legislature; 
3. 
Exemption repeal. 
A tax exemption may not be repealed 
except by vote of at least 2/3 of all members of each House of 
the Legislature; and 
4. 
Exception: debt payment. 
To the extent necessary to 
make up for General Fund revenues set apart by the Treasurer of 
State to pay interest and principal on bonded debt as provided 
under the Constitution of Maine. Article V. Part Third. Section 
5, 
the 
Legislature 
may 
eliminate 
a 
tax 
exemption 
without 
application of subsection 3 or enact a tax or license fee or 
increase the rate of taxes or license fees without application of 
subsections 1 and 2. 
PARTC 
Sec. C-l. 5 MRSA §1514-A is enacted to read: 
§1514-A. 
Income Tax Rate Management Fund 
1. 
Fund established. 
For the 
pur. .loses of reducing the 
volatility of state tax revenues. improving the predictability of 
state 
and 
local budgeting efforts 
and 
managing 
the State's 
overall tax burden, there is established the Income Tax Rate 
Management Fund, referred to in this section as "the fund." The 
fund may be used to alleviate only the characteristics of· the 
State's income tax rate structure that concentrate the individual 
income tax rates within a narrow range of taxable incomes and 
apply the highest marginal rate to a relatively low level of 
taxable income. 
Money in the fund does not lapse, but is carried 
forward for the purposes of this section. 
COMMITTEE AMENDMENT 
.. '" 
t~.~~' 
/ 
COMMITTEE AMENDMENT .. b· to H.P. 1209, L.D. 1629 
2. 
Revenues reserved. 
Beginning with fiscal year 2005-06, 
and before making transfers required by section 1513, if the 
total General Fund revenues for a fiscal year, as determined by 
the State Controller at the close of the fiscal year, exceed 
those of the previous fiscal year by more than the average real 
personal 
income 
growth 
rate, 
as 
defined 
in 
section 
1665, 
subsection 1, the State Controller shall at the close of the 
fiscal 
year 
reserve 
from 
amounts 
available 
from 
the 
unappropriated surplus of the General Fund an amount equal to the 
identified excess General Fund revenues and transfer that amount 
to the fund before any other transfer. 
3. 
Changes to rate structure. 
By September 1st, annually, 
the State Tax 
Assessor shall adopt by rule changes to the 
individual income tax rate structure for income tax years that 
begin on or after January 1st of that year in accordance with 
this 
section and within the 
financial 
limits of 
the 
money 
available 
in 
the 
fund. 
Specifically, 
the 
assessor 
shall 
proportionately reduce the individual income tax rates to the 
nearest 1/lOth of 
l~ without exceeding the 
amount of money 
available in the fund. 
Rules adopted under this section are 
routine technical rules as defined in Title 5, 
chapter 375, 
subchapter 2-A. 
4. 
Transfer to General Fund. 
The State Controller shall 
transfer from the fund to the General Fund the amount certified 
by the State Tax Assessor as the adjustment necessary to offset 
any individual income tax revenue reduction implemented by the 
assessor pursuant to subsection 3. 
Sec. C-Z. 5 MRSA §1664, last 1(, as enacted by PL 2003, c. 451, 
Pt. X, §s, is amended to read: 
The total General Fund appropriation for each fiscal year of 
the 
biennium 
in 
the 
Governor' s 
budget 
submission 
to 
the 
Legislature may not exceed the General Fund appropriation of the 
previous fiscal year multiplied by one plus the average real 
personal 
income 
growth 
rate, 
as 
defined 
in 
section 
1665, 
subsection 
1T--p-l-u-s--t::ae--a>v-e-£~-~l'eGa-s-t.e4-.,iR.f.J.a-t..,iaR-~-at-e-.---~a~ 
p1:l~pa6e6-~--t::a.i-&-~-a¥~--·!.a-...e-~-.fao£e€a-6-t.ee.--~],.a.t-.i,.on..-f'al::e!! 
ffieaQ6-~~~~-~9f'eeast:ee.-~~~-~-t::ae-~~~~-~~~-*ae.eH 
1:lQe.ef'~yiQ~--tae--f'eveQ1:le--pFa~eet:ieQ6--QeVe~apee.--By--t:ae--ReveQ1:le 
~aFeeast:iQ~---bemmit:t:ee---p1:l~61:laQt:---t:a---eaapt:e~---~§~-B. 
This 
appropriation limitation may be exceeded only by the amount of 
the 
additional 
costs or 
the lost federal 
revenue 
from 
the 
following exceptional circumstances: unfunded or under-funded new 
federal mandates; losses in federal revenues or other revenue 
sources; 
citizens' 
initiatives 
or 
referenda 
that 
require 
increased state spending; court orders or decrees that require 
additional state resources to comply with the orders or decrees; 
COMMITTEE AMENDMENT 
~\~.~. 
COMMITTEE AMENDMENT ,,£.. to H.P. 1209, L.D. 1629 
and sudden or significant increases in demand for existing state 
services that are not the result of legislative changes that 
increased eligibility or increased benefits. 
The Governor may 
designate 
exceptional 
circumstances 
that 
are 
not 
explicitly 
defined in this paragraph but meet the intent of this paragraph. 
For purposes of this paragraph, "exceptional circumstances" means 
an unforeseen condition or conditions over which the Governor and 
the 
Legislature 
have 
little 
or 
no 
control. 
Exceptional 
circumstances do not apply to new programs or program expansions 
that go beyond existing program criteria and operation. 
PARTD 
Sec. D-l. 36 MRSA §4641-B, sub-§3, as enacted by PL 2001, c. 
559, Pt. I, §4 and affected by §15, is amended to read: 
3. 
Disposition of funds. 
Each register of deeds shall, on 
or before the 10th day of each month, pay over to the State Tax 
Assessor 90% of the tax collected pursuant to this section during 
the previous month. 
The remaining 10% must be retained for the 
county by the register of deeds and accounted for to the county 
treasurer as reimbursement for services rendered by the county in 
collecting the tax. 
If the tax collected is not paid over by the 
lOth day of the month, the State Tax Assessor may impose interest 
pursuant to section 186. 
This subsection is repealed July L 
2005. 
Sec. D-2. 36 MRS A §4641-B, sub-§3-A is enacted to read: 
3-A. 
Disposition of funds. 
Each register of deeds shalL 
on or before the 10th day of each month, pay over to the State 
Talt Assessor 5Q'l-o of the tax collected pursuant to this section 
during the previous month. 
The remaining SO'l-o must be retained 
for the county by the register of deeds and accounted for to the 
county treasurer as reimbursement for services rendered by the 
county in collecting the tax. 
If the tax collected is not paid 
oyer by the 10th day of the month. the State Tax Assessor may 
impose interest pursuant to section 186. 
This subsection takes 
effect July 1, 2005.' 
Further amend the resolution in Part E 
striking out all of the question and inserting 
following: 
in section 1 by 
in its place the 
• "Do you want the State to pay 55% of the cost of public 
education, provide greater financial assistance to counties 
and lower state taxes by limiting annual state spending and 
revenue growth to the same percentage as personal income 
growth, 
using any excess 
revenues to 
reduce 
income tax 
COMMITTEE AMENDMENT 
· ~~". 
,*:tS 
/ 
COMMITTEE AMENDMENT "t:;, .. to H.P. 1209, L.D. 1629 
rates, 
and to require a 
2/3 vote of the Legislature to 
increase any taxes or certain license fees?'" 
Further amend the resolution by 
any 
nonconsecutive 
Part 
letter 
or 
consecutively. 
SUMMARY 
relettering or renumbering 
section 
number 
to 
read 
This amendment is a minority report. 
It replaces Parts A to 
D of 
the 
resolution. 
Part 
A of 
the 
amendment 
changes 
the 
Essential 
Programs 
and Services 
Funding Act 
to increase the 
State's share of funding public education from kindergarten to 
grade 12 from 50% over 5 years to 55% over 5 years. 
Part A also 
establishes the essential programs and services model for funding 
education as 
the basis 
for 
the calculation of 
a 
full-value 
education mill rate expectation identifying the state and local 
share of the cost of providing essential programs and services 
beginning in fiscal year 2005-06. 
Part B requires a 2/3 vote of each House of the Legislature 
to enact or increase taxes or certain license fees. 
Part 
C restricts growth in state 
revenues 
and 
in the 
Governor's budget request to the rate of growth in average real 
personal income. 
If revenues exceed the limit, the excess would 
be placed in the Income Tax Rate Management Fund and used to 
reduce income tax rates. 
Part D changes the disposition of the real estate transfer 
tax by permitting counties to retain 50% of the revenues rather 
than the current 10%. 
This amendment also replaces the question in Part E of the 
resolution. 
FISCAL :\OTE REQUlRED 
(See attached) 
COMMITTEE AMENDMENT 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Referendum Costs 
Approved: 08/19/03 ;:b;?ac:.. 
Office of Fiscal and Program Review 
LD 1629 
RESOLUTION, Proposing a Competing Measure under the Constitution 
of Maine To Reduce the Cost of Local Government through 55% State 
Funding of Public Education, To Reduce State Taxes by Requiring a 2/3 
Vote To Raise Taxes, To Limit the Growth of State Spending to the 
Growth in State Personal Income and To Dedicate Excess Revenue To 
Provide Income Tax Relief 
LR216S(06) 
Fiscal Note for Bill as Amended by Committee Amendment" " 
Committee: Taxation 
Fiscal Note Required: Yes 
Minority Report 
Fiscal Note 
2003-04 
2004-05 
$0 
$0 
$0 
$0 
$0 
$0 
$0 
$0 
MonthN ear 
Election Type 
Question 
Nov-03 
General 
Referendum 
Projections 
2005-06 
$5,042,033 
$0 
($5,042,033 ) 
($4,430,033) 
Length 
Lengthy 
Projections 
2006-07 
$76,128,9k 
$20,235,995 
($55,892,929) 
($4,518,634) 
The Secretary of State's budget includes sufficient funds to accommodate one ballot of average length for the general 
election in November 2003. If the number or size of the referendum questions increases the ballot length, an additional 
appropriation of $8,000 or more may be required. 
Fiscal Detail and Notes 
The implementation of this bill is contingent upon approval by the voters. If approved by the voters, this bill has the 
following impact. 
General Fund Summary 
Additional Appropriation needed to fund EPS in 
LD 1629 
Cost of General Fund revenue growth cap at the 10-
year moving average of real personal income 
growth 
Cost of the revenue loss associated with Real 
Estate Transfer Tax changes 
Net General Fund Cost (Savings) 
2003-04 
2004-05 
$0 
$0 
$0 
$0 
$0 
$0 
$0 
$0 
Projections 
2005-06 
$0 
$0 
$5,042,033 
$5,042,033 
Projections 
2006-07 
$20,235,995 
$50,750,055 
$5,142,874 
$76,128,924 
This bill provides for a new method of determining the state and local share of funding the cost of K-12 public 
education beginning in fiscal year 2005-06. This bill includes the Essential Programs and Services model, as 
approved by the Legislature in Public Law 2003, c. 504, An Act to Implement School Funding Based on Essential 
Programs and Services, as the basis for determining the total cost ofK-12 public education. However, this bill differs 
from PL 2003, c. 504 in that it requires the State's share to increase to 55% by fiscal year 2009-10 versus the 50% 
requirement in PL 2003, c. 504. This bill also provides for the calculation of a full value education mill rate that is 
required to raise the total maximum local share of the cost offunding K-12 education and establishes a 10 mill cap on 
the full value education mill rate. The Department of Education estimates the mill rate expectation to be 8.55 mills in 
fiscal year 2005-06. 
This bill also provides for a transition adjustment through fiscal year 2009-10 for municipalities that experience an 
adverse fiscal impact as a result of the phase-in of the essential programs and services model and the maximum local 
share mill rate expectation method of determining the local contribution of funding K-12 education. This bill 
proposes a transition adjustment amount of $1 0,000,000 in fiscal year 2005-06 with the amount declining in each 
successive year through fiscal year 2009-10. Since this legislation does not specify the transition amounts for fiscal 
years 2006-07 through fiscal year 2009-10, this fiscal note assumes that the transition adjustment declines evenly over 
the 5-year period. This fiscal note also assumes that the transition adjustment amounts are included in the estimated 
General Fund appropriation amounts needed to fund K-12 education based on the Essential Programs and Services 
model in this measure thereby affecting the distribution among individual school units. The impact to each local 
school unit can not be determined at this time. 
The following table provides estimates for the total State and Local Operating Cost of funding education based on the 
Essential Programs and Services model and provides a comparison of the General Fund appropriations that are 
estimated to be needed to fund the state's share of the cost offunding K-12 education based on the State's contribution 
reaching 50% in fiscal year 2009-10, as approved in Public Law 2003, c. 504, versus the 55% State contribution 
proposed in this legislation. 
State and Local Cost to Fund K-12 Public Education 
Utilizing the Essential Programs and Services Model 
Comparison of 50% State Contribution vs. 55% by FY 2009-10 
Base Year 
2003-04* 
2004-05* 
Projections 
2005-06 
Projections 
2006-07 
Total State & Local Operating 
Cost allocation based on EPS 
model (100%) 
1,256,951,694 
1,260,260,954 
1,270,125,664 
1,285,714,652 
EPS Transition Percentage 
Adjusted Total Operating 
Allocation based on EPS model 
80.82% 
1,015,819,375 
82.00% 
84.00% 
88.00% 
1,033,413,982 
1,066,905,558 
1,131,428,894 
Total State & Local cost based 
on EPS funding model (includes 
program costs, debt service and 
adjustments) 
1,467,408,412 
1,518,173,106 
1,537,199,970 
1,618,879,589 
State Share Targets to fund K-12 
education based on EPS model 
approved in P.L. 2003, c. 504 
State Share Targets to fund K-12 
education based on EPS model in 
LD 1629 
Estimated General Fund 
appropriation needed to fund K-
education based on EPS 
model approved in P.L. 2003, c. 
Estimated General Fund 
appropriation needed to fund K-
education based on LD 1629 
Additional General Fund 
Appropriation required to fund 
EPS model in LD 1629 vs. P.L. 
2003,c.504 
49.89% 
49.89% 
* No adjustment in fiscal year 2003-04 and fiscal year 2004-05 
47.81% 
47.81% 
49.00% 
49.25% 
49.00% 
50.sf 
753,227,985 
797,298,197 
753,227,985 
817,534,192 
o 
20,235,995 
• 
The change in the distribution of the revenue generated by the Real Estate Transfer Tax will reduce General Fund 
Revenue by $5,042,033 in fiscal year 2005-06 and $5,142,874 in fiscal year 2006-07 and will reduce Other Special 
Revenue to the Housing Opportunities for Maine Fund by $4,430,033 in fiscal year 2005-06 and $4,518,634 in fiscal 
year 2006-07. The increase in the amount of transfer tax revenue that the counties may retain is estimated to be 
$9,472,067 in fiscal year 2005-06 and $9,661,508 in fiscal year 2006-07. 
Establishing a General Fund revenue growth cap at the 10-year moving average of real personal income growth will 
reduce General Fund revenue in fiscal year 2006-07 by over $50 million since this amount will be transferred to the 
Income Tax Rate Management Fund at the end of fiscal year 2006-07. Beginning in fiscal year 2007-08 individual 
income tax revenue will be reduced as a result of the required proportionate adjustment in individual income tax rates. 
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