An Act To Limit the Growth of Government Spending
Maine Legislature, Session 121, LD 1383
Committee: Appropriations and Financial Affairs
Sponsors: TURNER, BRUNO, DAVIS, NASS, WOODCOCK, BOWLES
Amends: 5 MRSA §1513

Legislative Document 
No. 1383 
S.P.453 
In Senate, March 18, 2003 
An Act To Limit the Growth of Government Spending 
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed. 
Presented by Senator TURNER of Cumberland. 
Cosponsored by Representative BRUNO of Raymond and 
JOY J. O'BRIEN 
Secretary of the Senate 
Senators: DAVIS of Piscataquis, NASS of York, WOODCOCK of Franklin, Representative: 
BOWLES of Sanford. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. I. 5 MRSA c. 52 is enacted to read: 
CHAPTER 52 
STATE AIID LOCAL GOVERNMENT EXPENDITURE LIMITS 
§56l. 
DefinitioDS 
As 
used in this chapter, 
unless 
the context otherwise 
indicates, the following terms have the following meanings. 
1. Inflation. 
"Inflation" means the percentage change in 
the Consumer Price Index, as defined in Title 36, section 5402, 
subsection 1. 
2. 
Local 
government. 
"Local 
government" 
means 
a 
municipality or a county. 
§562. 
State and local government e~nditure limits 
1. 
State spending limit. 
Except as provided in subsection 
3, 
the 
maximum 
annual 
percentage 
increase 
in 
General 
Fund 
expenditures, excluding federal funds 
received by the General 
Fund, 
may not exceed inflation plus the percentage change in 
state population in the prior year. 
2. 
Local government e~nditure limit. 
Except as provided 
in subsection 3, the maximum annual percentage increase in the 
expenditures of a local government may not exceed inflation plus 
the percentage change in state population in the prior year. 
3. 
Two-thirds 
vote 
required. 
The 
State 
or 
a 
local 
government may authorize an expenditure in excess of the limit 
established in subsection 1 or 2 only upon a vote of 2/3 of the 
entire elected membership of each House of the Legislature, in 
the case of the State, or upon a 2/3 vote of the governing body 
of the local gOVernment, in the case of a local government. 
4. 
PQPulation determination. 
For purposes of subsections 1 
and 2, population must be determined by annual federal census 
estimates, and that number must be adjusted every decade to match 
the Federal Decennial Census. 
§563. 
Disposition of excess revenue 
1. 
State 
el8erge~ reserve fund. 
If the State collects 
revenue that exceeds the expenditure limit established for that 
fiscal year in section 562, subsection L 
as the first priority 
Page l-LR0562(1) 
before any other transfer. the State Controller shall at the 
close of the fiscal year transfer the amount representing the 
excess funds to the emergency reserve fund established by the 
State pursuant to section 564 at the beginning of the next fiscal 
year or. if the emergency reserve fund contains the requisite 
amount of funds. refund the excess funds to the citizens of the 
State in the next fiscal year. 
2. 
Local goyerpeept disposition. 
If a 
local government 
collects revenue that exceeds the expenditure limit established 
for that fiscal year in section 562. subsection 2. the local 
government shall transfer an amount representing the excess funds 
to the emergency reserve fund established by the local government 
pursuant to section 564 at the beginning of the next fiscal year 
or. if the emergency reserve fund contains the requisite amount 
of funds. refund the excess funds to the citizens of the local 
government. 
§564. 
lllergency reserve fund 
The State and each local government shall reserve in an 
emergency reserve fund the equivalent of 3 months of operating 
revenue. 
Appropriations from the State's emergency reserve fund 
may be made by a 
2/3 vote of the entire elected membership of 
each 
House 
of 
the Legislature. 
and 
appropriations 
from 
the 
emergency reserve fund of a local government may be made by a 2/3 
vote of the governing body of the local government. 
Sec. 2. 5 MRSA §1513, sub-§l, as corrected by RR 1999, c. 2, 
§1, is amended to read: 
1. 
Maine Rainy Day Fund. 
As-.t.he-..f-i-l"-&t.--pc-i-Gl"-i-t-y--:9&f.G.Fe--aay 
e~heF-.t.~aa6feF After transfers made pursuant to section 563, the 
State Controller shall at the close of each fiscal year reserve 
from the unappropriated surplus of the General Fund an amount 
equal to 1/2 the excess of total General Fund revenues received 
over accepted estimates in that fiscal year and transfer that 
amount to the Maine Rainy Day Fund at the beginning of the next 
fiscal year. 
Accepted revenue estimates may not be increased 
after 
adjournment 
of 
each 
First 
Regular 
Session 
of 
the 
Legislature except as provided. 
For 
the first year of the 
biennium, revenue estimates for the 2nd year of the biennium may 
be 
adjusted 
once 
during the 
Second 
Regular 
Session of 
the 
Legislature. 
Accepted revenue estimates may be increased for 
other fiscal periods only if an amount not to exceed 1/2 of the 
increase is transferred by the State Controller to the Rainy Day 
Fund at the same time from the unappropriated surplus of the 
General Fund. 
The fund may not exceed 6'\ of the total General 
Fund revenues received in the· immediately preceding fiscal year 
and may not lapse, but remains in a continuing carrying account 
to carry out the purposes of this section. 
A reduction in the 
fund is not necessary in the event the total General 
Fund 
revenues received in the immediately preceding fiscal year are 
less than the total General Fund revenues received in the fiscal 
year 2 years previous and if the fund is at its 6% limit. 
Sec. 3. Statutory referendum procedure; submission at statewide 
election; form of question; effective date. 
This Act takes effect when 
approved only for the purpose of permitting its submission to the 
legal voters of the State at a statewide election held on the 
Tuesday following the first Monday of November following passage 
of this Act. 
The municipal officers of this State shall notify 
the inhabitants of their respective cities, towns and plantations 
to meet, in the manner prescribed by law for holding a statewide 
election, to vote on the acceptance or rejection of this Act by 
voting on the following question: 
"Do 
you 
favor 
placing 
a 
limit 
on 
the 
maximum 
annual 
percentage 
increase 
in 
state 
and 
local 
government 
expenditures; requiring a 
2/3 vote of the Legislature to 
approve state General Fund expenditures that exceed this 
limit and a 2/3 vote of a local government's governing body 
to approve local government expenditures that exceed this 
limit; and requl.rl.ng that surplus funds be placed in an 
emergency reserve fund or returned to the citizens?" 
The legal voters of each city, town and plantation shall 
vote by ballot on this question and designate their choice by a 
cross or check mark placed within a corresponding square below 
the word "Yes" or "No." 
The ballots must be received, sorted, 
counted and declared in open ward, town and plantation meetings 
and returns made to the Secretary of State in the same manner as 
votes for members of the Legislature. 
The Governor shall review 
the returns and, if it appears that a majority of the legal votes 
are cast in favor of the Act, the Governor shall proclaim that 
fact without delay, and the Act takes effect 30 days after the 
date of the proclamation. 
The Secretary of State shall prepare and furnish to each 
city, town and plantation all ballots, returns and copies of this 
Act necessary to carry out the purposes of this referendum. 
SUMMARY 
This bill establishes expenditure limits on state and local 
governments as follows. 
1. 
It provides that the maximum annual percentage increase 
in state General 
Fund expenditures, 
excluding federal 
funds 
received by the General Fund, may not exceed inflation plus the 
percentage change in state population in the prior year. 
2. 
It provides that the maximum annual percentage increase 
in local government expenditures may not exceed inflation plus 
the percentage change in state population in the prior year. 
3. 
It authorizes 
the 
State 
or 
a 
local 
government 
to 
authorize expenditures in excess of the established limit only 
upon a vote of 2/3 of the entire elected membership of each House 
of the Legislature, in the case of the State, or upon a 2/3 vote 
of the governing body of the local government, in the case of a 
local government. 
4. 
It requires that revenues collected in excess of the 
spending limits must be placed in an emergency reserve fund 
containing the equivalent of 3 months of operating revenues or, 
if the 
fund 
already contains 
that 
amount, 
refunded 
to 
the 
citizens. 
5. 
It requires that, 
the issue be submitted to 
approval. 
in order for the bill to take effect, 
the voters of the State for their