An Act to Implement School Funding Based on Essential Programs and Services, as the basis for determining the total cost ofK-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 2007-08 versus the 50% by fiscal year 2009-10 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 of funding K-12 education and establishes a 8.55 mill cap on the full value education mill rate. This bill also provides for a transition adjustment through fiscal year 2007-08 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 $10,000,000 in fiscal year 2005-06 with the amount declining in each successive year through fiscal year 2007-08. Since this legislation does not specify the transition amounts for fiscal years 2006-07 and fiscal year 2007-08, this fiscal note assumes that the transition adjustment declines evenly over the 3-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 of funding 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 by fiscal year 2007-08 proposed in this legislation. State and Local Cost to Fund K-12 Public Education Utilizing the Essential Programs and Services Model Comparison of50% State Contribution in FY 2009-10 vs. 55% by FY 2007-08 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 LR2165(5) - Fiscal Note - Page 2 of 4
Maine Legislature, Session 121, LD 1629
Committee Amendment CA_D_H602 (House)
Amends: 20-A MRSA §15671, 20-A MRSA §15671-A, 36 MRSA §6201, 36 MRSA §6207, 36 MRSA §6209, 36 MRSA §1817

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, Proposinq a Competinq Measure under the Constitution 
of Maine To Reduce Property Taxes by Increasinq State Fundinq for 
Education, 
Providinq a 
Local Option Municipal Sales Tax 
and 
Increasinq the Maine Residents Property Tax Rebate' 
Further amend the resolution in the first indented paragraph 
after the title in the last 2 lines (page 1, 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(5) 
COMM/rrEE 
~~co. 
COMMITTEE AMENDMENT :1)" to H.P. 1209, L.D. 1629 
'PART A 
Sec. A-I. 20-A MRSA §15671, sub-§7, 1J1JA and B, as enacted by 
PL 2003, c. 504, Pt. A, §5, are amended to read: 
A. 
The 
annual 
targets 
for 
the essential 
programs 
and 
services 
transition 
percentage, 
excluding 
program 
cost 
allocation, debt service allocation and adjustments, are as 
follows. 
(1) 
For fiscal year 2005-06, the target is 84% 86.25%. 
(2) 
For fiscal year 2006-07, the target is 88% 93%. 
(3) 
For fiscal year 2007-08, the target is 9a% 100%. 
~§~--~~-~-~~-~~-aQQ9-~Q-~-~~-~~&r-~Re 
~aI?EJe~-i:6-~QQ% ... 
B. 
The annual targets for the state share percentage are as 
follows. 
(1) 
For fiscal year 2005-06, the target is 49% 50%. 
(2) 
For fiscal year 2006-07, 
the target is 49 ... a§% 
~. 
(3) 
For fiscal year 2007-08, the target is 49 ... §Q% 55%. 
~§~--~~-~~~-~~-aQQ9-~Q-a£Q-~~-~~&r-~Re 
~aI?EJe~-i6-§Q% ... 
Sec. A-2. 20-A MRSA §15671, sub-§8 is enacted to read: 
8. 
Alternative 
calculation 
of 
state 
contribution 
to 
education. 
The 
Commissioner 
of 
Education 
shall 
annually 
calculate the percentage for the state share of funding the costs 
of public education by including the cost of teacher pensions and 
health insurance for retired teachers as part of total costs and 
attributing the appropriate state and local shares and report 
that calculation to the Legislature. 
Sec. A-3. 20-A MRSA §15671-A is enacted to read: 
§1567l-A. 
Prqperty tax contribution to public education 
COMM/rrEE 
"'~co. 
COMMITTEE AMENDMENT :1) .. to H.P. 1209, L.D. 1629 
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 e:Jpectation 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, 200S, 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 
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 (3) and may not exceed 8.SS 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 
COMMITTEE AMENDMENT 
"" .. 
COMMITTEE AMENDMENT :0>" to H.P. 1209, L.D. 1629 
education mill 
rates 
must 
be 
derived according to 
the 
following schedule: 
(1) 
For the 2005 property tax year, 
the full value 
education mill rate is the amount necessary to result 
in a 50% local share in fiscal year 2005-06; 
(2) 
For the 2006 property tax year, the full-value 
education mill rate is the amount necessary to result 
in a 47.5% local share in fiscal year 2006-07: and 
(3) 
For the 2007 property tax year, 
the full-value 
education mill rate is the amount necessary to result 
in a 45% local share in fiscal year 2007-08. 
3. 
Ezceeding 
local 
cost 
share 
e~ctation: referendum 
process. 
Beginning 
with 
the 
2007-08 
school 
budget, 
the 
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 voters of the school administrative 
unit 
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 applicable. 
Sec. A-4. 20-A MRS A §lS684, sub-§3 is enacted to read: 
3. 
Repeal. 
This section is repealed on July I. 2005. 
Sec. A-S. 20-A MRSA §lS686, 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 
eiFee~~Y---Fe~a~ee---~e 
that 
may 
be 
experienced 
by 
some 
municipalities as a result of the phase-in of this Act. 
The 
transition adjustment for a municipality must be directly related 
to the phase-in of essential programs and services and the local 
cost 
share 
expectation 
method 
of 
determining 
the 
local 
contribution to 
the 
cost of 
funding essential 
programs 
and 
services. 
The 
amount 
of this 
adjustment is established at 
$10.000.000 for fiscal year 2005-06 and must decline with each 
successive fiscal 
yearT--and--~B.e. 
The adjustments must end no 
later than fiscal year 6999-19 2007-08. 
Sec. A-6. 20-A MRSA §lS688 is enacted to read: 
COMMITTEE AMENDMENT 
'f!' .<0. 
COMMITTEE AMENDMENT J) .. to H.P. 1209, L.D. 1629 
§15688. 
School .,.,...inistrative unit contribution to total 
cost of funding public education from kindergarten 
to grade 12 
1. 
School administrative unit: total cost. 
For each school 
administrative unit, the commissioner shall annually determine 
the school administrative unit's total cost of education. 
A 
school administrative unit's total cost of education must include: 
A. 
The school administrative unit's total cost of funding 
essential programs and services subject to the transition 
percentages 
described 
in 
section 
15671, 
subsection 
7, 
paragraph A: 
B. 
The program cost allocation as used in chapter 606: and 
C. 
The debt service allocation as used in chapter 606. 
2. 
Member municipalities in school administrative districts 
or 
commpDit,y 
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 funding times the percentage that the municipality's most 
recent 
calendar 
year 
average 
pupils 
is 
to 
the 
school 
administrative district'S or community school district's most 
recent calendar year average pupils. 
3. 
School 
administrative unit: 
contribution. 
For 
each 
school 
administrative 
unit, 
the 
commissioner 
shall 
annually 
determine 
the 
school 
administrative 
unit's 
contribution 
in 
accordance with the fOllowing. 
A. 
The school administrative unit's contribution to the 
total cost of education is the lesser of; 
(1) 
The total cost for each municipality as described 
in subsection 1 or 2: or 
(2) 
The total of the full-value education mill rate 
derived in section 1567l-A, subsection 2 multiplied by 
the certified state valuation for the year prior to the 
most 
recently 
certified 
state 
valuation 
for 
each 
municipality in the school administrative unit. 
B. 
The school administrative unit's state contribution to 
the total cost of education is the total cost of education 
COMMITTEE AMENDMENT 
~ ..... 
COMMITTEE AMENDMENT ,))" to H.P. 1209, L.D. 1629 
calculated 
pursuant 
to 
subsection 
less 
the 
school 
administrative unit's contribution calculated pursuant to 
paragraph A. 
4. 
Effective date. 
This section takes effect July 1, 2005. 
Sec. A-7. 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 education from 
kindergarten to grade 12 must be based on the cost of providing 
essential programs and services as described in the Maine Revised 
Statutes, Title 20-A, chapter 606-B. 
Sec. 
A-8. 
Appropriations and 
allocations. 
appropriations and allocations are made. 
EDUCATION, DEPARTMERT OF 
General Purpose Aid for Local Schools 
The 
following 
Initiative: 
Provides funds to increase the State's share of 
education funding costs. 
General Fund 
All Other 
General Fund Total 
PARTB 
2004-05 
$30,000,000 
$30,000,000 
Sec. B-1. 36 MRSA §6201, sub-§I, as amended by PL 1993, c. 
670, §9, is repealed and the following enacted in its place: 
1. 
Benefit base. 
"Benefit base" 
means 
property taxes 
accrued on the first $200,OQO of taxable just value of the 
homestead or rent constituting property taxes accrued. 
In the 
case of property taxes accrued, the benefit base is determined by 
multiplying $200,000 by the ratio of current just value upon 
which the assessment is based as furnished in the assessor's 
annual return to the State Tax Assessor filed in accordance with 
section 383 times the municipal tax rate. 
If the benefit base as 
calculated 
in 
the 
previous 
sentence 
exceeds 
property 
taxes 
accrued, the property taxes accrued become the benefit base. 
In 
the case of a claimant paying both rent and property taxes for a 
homestead, "benefit base" means both property taxes accrued as 
limited by this subsection and rent constituting property taxes 
accrued. 
Sec. B-2. 36 MRSA §6207, first ~, as amended by PL 1997, c. 
557, Pt. A, §3 and affected by Pt. G, §l, is further amended to 
read: 
COMMITTEE AMENDMENT 
-. .'0-
COMMITTEE AMENDMENT y" to H.P. 1209, L.D. 1629 
A claimant representing a nonelderly household qualifies for 
- the 
following 
benef i ts 
SliB:3-ee~---t;e.---t:-he---.f"-e-l~-ew4TH3---iB.eefRe 
;!,ifRi~a~ieB.s. 
Sec. B-3. 36 MRSA §6207, sub-§I, ,A-I, as amended by PL 1997, 
c. 557, Pt. A, §3 and affected by Pt. G, §l, is further amended 
to read: 
A-I. 
~if~y-~~~~-~sa~ The portion of the benefit base 
that exceeds 
4%-.J:I.u.t---4Ge-s--£e~-~-8% 5'l-o of income F!liS 
;!'QQ%-e.f"--t:~-~~~~~-~se-aeB.ef4~-~€--t:~-~-S%-ef 
iB.eefRe-~e-a-fRaHifRl:ifR-FaYfReB.~-ef-$;!,TQQQ. 
Sec. B-4. 36 MRSA §6207, sub-§2, as amended by PL 1997, c. 
557, Pt. A, §3 and affected by Pt. G, §l, is repealed. 
Sec. B-S. 36 MRSA §6209, as amended by PL 1989, c. 508, §25, 
is further amended to read: 
§6209. Annual adjustment 
1. 
Household limitation adjustment. 
Beginning March 1, 
1989, 
and annually thereafter, 
the State Tax Assessor shall 
determine the household income eligibility adjustment factor. 
That factor ssa;!,;!, ~ 
be multiplied by the income limitations in 
section 6206, applicable for the year prior to that for which 
relief is requested. The result ssa;!,! ~ 
be rounded to the 
nearest $100 and ssa;!,;!, ~ 
apply to the year for which relief is 
requested corresponding to the year on which the annualized cost 
of living adjustments were based. 
8e!jJiB.:ai-:a!jJ-Ma.£€fi-~-,--J:.g.g.J:.r-Ule 
safRe-~e€eQ~.£e-~~-~-&fRp~eyee-~e-~~--t:-he--~~-;!'ifRieaeieB. 
iB.-seeeieB.-e6Q+T-sl:iBseeeieR-6T 
PARTe 
Sec. C-l. 36 MRSA §1817 is enacted to read: 
§1817. Municipal 1oca1 option sales and use tax 
1. 
Definitions. 
As 
used 
in this section. 
unless 
the 
context 
otherwise 
indicates, 
the 
following 
terms 
have 
the 
following meanings. 
A. 
"Adjusted property tax rate" means 
a municipality's 
property tax rate per $1,000 of assessed valuation, adjusted 
for 
inflation using 
the 
Consumer 
Price 
Index 
and 
any 
neighborhood or municipality revaluations. 
COMM/rrEE AMENDMENT 
~." 
COMMITTEE AMENDMENT ·Y" to H.P. 1209, L.D. 1629 
B. 
"Eligible 
municipality" 
means 
a 
municipality 
or 
organized municipal township. 
"Eligible municipality" does 
not include a county or a subsidiary unit of government such 
as an unorganized township. village. special district or 
school district. 
C. 
"Local option sales and use tax" means the sales and use 
tax 
imposed 
by 
an 
eligible 
municipality 
pursuant 
to 
subsection 2. 
D. 
"Participating county" means a county in which there is 
at least one participating municipality. 
E. 
"Participating 
municipality" 
means 
an 
eligible 
municipality that has imposed a local option sales and use 
tax pursuant to this section. 
F. 
"Sales tax base" means those items subject to sales 
taxation under this Part. 
G. 
"Single transaction limitation" means 
a dollar limit 
that a participating municipality may place on the amount of 
tax the municipality collects from a single item transaction 
subject to the local option sales and use tax. 
2. 
Authorization to impose local qption sales and use tax. 
An eligible municipality may impose a local option sales and use 
tax of 1~ on those items that are part of the sales tax base. 
An 
eligible municipality that adopts a local option sales and use 
tax pursuant to this section may not alter the range of items 
subject to sales taxation. 
A municipality that adopts a local 
option sales and use tax also may adopt a single transaction 
limitation. 
The single transaction limitation may not exceed 
$100. 
3. 
~dministration. 
Retailers 
in 
a 
participating 
municipality shall transfer the revenue from the local option 
sales and use tax at the time of and in the manner provided in 
section 
1951-A 
for 
the 
transfer 
of 
state 
sales 
and use tax revenue. 
The tax is subject to the same interest. 
penalties and administrative actions as other taxes assessed 
under this Part. 
4. 
TrHD§fer of revenue. 
Each month. 
the assessor shall 
identify the amount of revenue attributable to each municipality 
under this section. subtract the costs of administering this 
section and certify the net amount due each municipality to the 
Treasurer of State. 
Of 
the net amount certified under this 
subsection. the Treasurer of State shall make monthly payments to: 
COMMITTEE 
..,.". 
COMMITTEE AMENDMENT ,])" to H.P. 1209, L.D. 1629 
A. 
The treasurer of a participating municipality in the 
amount 
of 
75% 
of 
the 
net 
amount 
collected 
from 
that 
participating municipality; and 
B. 
The treasurer of a participating county in the amount of 
25% 
of 
the 
net 
amount 
collected 
from 
participating 
municipalities within that county. 
For purposes of this subsection, 
"costs of administering this 
section" means the lesser of the actual cost to the assessor and 
2% of the total revenue generated by local option sales and use 
taxes. 
5. 
Disposition 
of 
participating 
co1JD.tlr 
share. 
Each 
participating county shall deposit the revenue received pursuant 
to subsection 4, paragraph B in a segregated account. 
A county 
shall 
determine 
its 
annual 
budget 
and 
assessment 
without 
consideration of the amount received pursuant to subsection 4, 
paragraph B. 
Funds within the segregated account may only be 
used by the county to reduce on a pro rata basis the property tax 
assessment required from each participating municipality within 
the participating county. 
6. 
Disposition of participating municipality share. 
Each 
participating municipality shall deposit the revenue received 
pursuant to subsection 4, paragraph A in a segregated account. 
A 
municipality shall determine its annual budget and assessment 
without 
consideration 
of 
the 
amount 
received 
pursuant 
to 
subsection 4, paragraph A. 
Funds within the segregated account 
may be used only as provided in this subsection. 
A. 
As the first priority, the participating municipality 
shall use at least 50% of the funds annually deposited in 
the 
segregated 
account 
to 
stabilize 
or 
lower 
that 
municipality's projected property tax rate. 
If, despite the 
application of at least 
50% of the funds, 
the combined 
effect of changes in the municipality's appropriations and 
revenue streams results in a projected adjusted property tax 
rate that exceeds the previous tax year's actual tax rate by 
more than 1%, then whatever portion of the remaining amount 
of segregated funds must be applied to maintain the adjusted 
property tax rate at or below 101% of the previous year's 
property tax rate. 
Notwithstanding any provision to the 
contrary, if a municipality uses all of the funds in the 
segregated account and the adjusted property tax rate is 
more than 
1'1-0 above the previous year's property tax rate, 
the final municipal budget containing the higher adjusted 
property tax may be adopted only by a 
2/3 vote of the 
governing body of that municipality. 
COMMITTEE 
~ .. ,. 
COMMITTEE AMENDMENT ::p .. to H.P. 1209, L.D. 1629 
B. 
As the 2nd priority, after compliance with paragraph A, 
the 
municipality 
may 
use 
any 
funds 
rema~n~ng in 
the 
segregated account for 
economic development purposes; 
to 
augment school budgets; to improve local roads, sewers and 
other infrastructure of the municipality; or for any other 
permissible 
spending 
or 
budgetary 
needs 
of 
the 
municipality. 
Funds may also be committed to meet annual 
budgetary or 
long-term capital 
investment 
needs 
of 
the 
municipality. 
7. 
Effect on revenue sharing and other state-aid programs. 
Revenue received pursuant to subsection 4 may not be considered 
to be receipts from the taxes imposed under this Part for the 
purpose of transfers to the Local Goyernment Fund under Title 
30-A, section 5681. 
Revenue received pursuant to subsection 4 
may not be used to reduce or eliminate any funding otherwise due 
the participating county or participating municipality under any 
provision of law providing aid to the participating county or 
participating municipality, including, but not limited to, aid to 
schools, roads, public assistance or jails. 
8. 
Referendum. 
The question of whether to impose a local 
option sales and use tax must be submitted to the legal voters of 
a municipality that seeks to impose the local option sales and 
use tax. 
The petition process and the voting at elections held in cities, 
towns and plantations must be held and conducted in accordance 
with Title 
30-A, 
sections 
2528, 
2529 
and 
2532 
even if the 
municipality has not accepted the provisions of section 2528. 
The voting at elections held in municipalities must be held and 
conducted in accordance with Title 21-A. 
The municipal clerk shall make a return of the results, certify 
the results 
and send them to the Secretary of State. 
The 
Secretary of State shall forward the results to the assessor. 
The 
local option sales 
and use 
tax may 
be discontinued by 
referendum 
conducted 
in 
the 
same 
manner 
as 
the 
referendum 
adopting the tax under this section was conducted. 
9. 
Effective date of tax. 
The tax authorized by this 
section takes effect 120 days after the municipal referendum vote 
under subsection 8 if it is accepted by a majority of the local 
voters voting at the election and the total number of votes cast 
equals or exceeds 
20~ of the total number of votes cast in that 
municipality in the most recent gubernatorial election. 
COMMITTEE AMENDMENT 
".~,. 
COMMITTEE AMENDMENT .~. to H.P. 1209, L.D. 1629 
PARTD 
Sec. 
D-l. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
The 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Maine Residents Property Tax Program 
0648 
following 
Initiative: 
Appropriates funds required due to the expansion of 
the Maine Residents Property Tax Program. 
General Fund 
All Other 
General Fund Total 
Revenue Services - Bureau of 
0002 
2003-04 
$0 
$0 
2004-05 
$34,350,000 
$34,350,000 
Initiative: 
Provides 
funds 
for 
one 
Tax 
Examiner 
position 
effective July 1, 2004 and other related costs associated with an 
increase in the number of applications for the Maine Residents 
Property Tax Program. 
General Fund 
positions - Legislative Count 
Personal Services 
All Other 
General Fund Total 
Revenue Services - Bureau of 
0002 
2003-04 
2004-05 
(0.000) 
(1.000) 
$0 
$46,135 
51, 028 
$0 
$97,163 
Initiative: 
Appropriates one-time funds to be deposited in Maine 
Revenue Services' Other Special Revenue program to support the 
start-up costs associated with a limited local option sales and 
use tax. 
General Fund 
All Other 
General Fund Total 
Revenue Services - Bureau of 
0002 
2003-04 
$0 
$0 
2004-05 
$956,561 
$956,561 
Initiative: 
Allocates funds for the additional costs associated 
with administering a limited local option sales and use tax, 
including 
funds 
for 
computer 
programming 
and 
software 
development. 
Position 
count is authorized to establish 
one 
Page ll-LR2165(5) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,~, to H.P. 1209, L.D. 1629 
Senior Tax Examiner position, one Taxpayer Assistance Specialist 
position and one Clerk II position. 
Other Special Revenue Funds 
Positions - Legislative Count 
Personal Services 
All Other 
Other Special Revenue Funds Total 
ADMIRISTRATIVE AIm FIRARCIAL SERVICES, 
DEP~ 
OF 
DEP~ 
'l'O'XALS 
GERERAL FORD 
o:rBEB SPECIAL REVENUE FORDS 
DEP~ 
'l."OTAL -
ALL FORDS 
EDUCATIOIJ, DEPARTMENT OF 
General Purpose Aid for Local Schools 
0308 
2003-04 
(0.000) 
$0 
o 
$0 
2003-04 
$0 
o 
$0 
2004-05 
(3.000) 
$134,696 
821, 865 
$956,561 
2004-05 
$35,403,724 
956,561 
$36,360,285 
Initiative: 
Appropriates funds for general purpose aid for local 
schools. 
General Fund 
All Other 
General Fund Total 
EDUCATIOIJ, DEPARTMENT OF 
DEP~ 
'l."OTALS 
DEP~ 
'l."OTAL -
ALL FORDS 
SECTIOIJ 'l'O'XALS 
GERERAL FORD 
o:rBEB SPECIAL REVENOE FORDS 
SECTIOIJ 'l."OTAL -
ALL FONDS 
Further 
striking out 
following: 
amend 
the 
the resolution 
question 
and 
2003-04 
$0 
$0 
2003-04 
$0 
$0 
2003-04 
$0 
$0 
2004-05 
$30,000,000 
$30,000,000 
2004-05 
$30,000,000 
$30,000,000 
2004-05 
$65,403,724 
956,561 
$66,360,285' 
in Part E 
inserting in 
in section 2 
its place 
by 
the 
COMMITTEE AMENDMENT 
\\. .f8. 
COMMITTEE AMENDMENT :Y" to H.P. 1209, L.D. 1629 
'''Do 
you want 
the State to 
relieve the burden 
on 
the 
property tax by increasing the state contribution to the 
cost of essential education programs and services, relieving 
municipali ties from having to pay more than 8.55 mills in 
property tax toward the cost of essential education programs 
and services, providing property tax rebates for homeowners 
whose 
property 
taxes 
exceed 
4% 
of 
their 
income 
and 
permitting municipalities to adopt a local sales and use tax 
if approved by local referendum?'" 
Further amend the resolution by relettering or renumbering 
any 
nonconsecutive 
Part 
letter 
or 
section 
number 
to 
read 
consecutively. 
SUMMARY 
This amendment is a minority report of the committee. 
It 
replaces 
Parts 
A to 
D of the 
resolution. 
Part A of this 
amendment provides $30,000,000 of additional state funding for 
education in fiscal year 2004-05 and speeds up the implementation 
of the essential programs and services funding model by phasing 
in recognition of 100% of essential programs and services and a 
55% state share by fiscal year 2007-08 rather than by fiscal year 
2009-10. 
Part B expands the Maine Residents Property Tax Program, 
commonly referred to as "the circuitbreaker program," by removing 
the income eligibility requirements and providing for a rebate 
equal to the amount by which the property taxes on the first 
$200,000 of the value of 
a 
homestead, 
or rent constituting 
property taxes, exceed 5% of a household's income. 
Part C of the amendment allows municipalities to impose a 1% 
local option sales and use tax. 
Revenue from the tax, after the 
deduction 
of 
administrative 
costs, 
is 
divided 
between 
the 
municipality and the county in which the municipality is located 
on a 
75/25 basis, respectively. 
A municipality must use the 
revenue generated by the local option sales and use tax to reduce 
the property tax rate. 
If, despite the use of all the revenue 
generated by the local option sales and use tax, the property tax 
rate, after adjustment for inflation, can not be decreased below 
a level that is 1% higher than the previous year's property tax 
rate, then this amendment requires a 213 vote of the governing 
body of the municipality to pass the budget containing the higher 
tax rate. 
Part D provides appropriations and allocations to implement 
the provisions of the resolution, as amended. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .:J) .. to H.P. 1209, L.D. 1629 
The amendment also changes the question proposed for the 
competing measure. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Net Cost (Savings) 
General Fund 
Appropriations! Allocations 
General Fund 
Other Special Revenue Funds 
Referendum Costs 
Approved: 08/19/03 ~ac:.. 
Office of Fiscal and Program Review 
LD 1629 
RESOLUTION, Proposing a Competing Measure under the Constitution 
of Maine to Reduce Property Taxes by Increasing State Funding for 
Education, Providing a Local Option Municipal Sales Tax and 
Increasing the Maine Residents Property Tax Rebate 
LR 2165(05) 
Fiscal Note for Bill as Amended by Committee Amendment" " 
Committee: Taxation 
Fiscal Note Required: Yes 
Minority Report 
Fiscal Note 
Projections 
Projections 
2003-04 
2004-05 
2005-06 
2006-07 
$0 
$65,403,724 
$65,473,461 
$123,610,417 
$0 
$65,403,724 
$65,473,461 
$123,610,417 
$0 
$956,561 
$0 
$0 
MonthlYear 
Election Type 
Question 
Length 
Nov-03 
General 
Referendum 
Lengthy 
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 for the General Purpose 
Aid for Local Schools program 
Additional Appropriation needed to fund EPS in 
LD 1629 
Projections 
2003-04 
2004-05 
2005-06 
$0 
$30,000,000 
$0 
$0 
$0 
$29,660,9l3 
LR2165(5) - Fiscal Note - Page 1 of 4 
Projections 
2006-07 
$0 
$86,363,596 
Additional appropriations associated with the 
expansion of the Maine Residents Property Tax 
$0 
$34,447,163 
$35,812,548 
$37,246,821 
~ffle appropriation for a local option sales and 
use tax. 
$0 
$956,561 
$0 
$() 
Net General Funa Cost (Savings) 
$0 
$65,403,724 
$65,473,461 
$123,610,417 
This bill includes a General Fund appropriation of $30,000,000 in fiscal year 2004-05 for the General Purpose Aid for 
Local Schools program within the Department of Education. This bill provides for a new method of determining the 
state and local share of funding the cost ofK-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-
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 2007-08 versus the 50% by fiscal year 2009-10 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 of funding K-12 education and establishes a 8.55 mill cap on the full value education mill rate. 
This bill also provides for a transition adjustment through fiscal year 2007-08 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 $10,000,000 in fiscal year 2005-06 with the amount declining in each 
successive year through fiscal year 2007-08. Since this legislation does not specify the transition amounts for fiscal 
years 2006-07 and fiscal year 2007-08, this fiscal note assumes that the transition adjustment declines evenly over the 
3-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 of funding 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 by 
fiscal year 2007-08 proposed in this legislation. 
State and Local Cost to Fund K-12 Public Education 
Utilizing the Essential Programs and Services Model 
Comparison of50% State Contribution in FY 2009-10 vs. 55% by FY 2007-08 
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 
LR2165(5) - Fiscal Note - Page 2 of 4 
EPS Transition Percentage based 
on EPA model approved in PL 
2003,c.504 
EPS Transition Percentage based 
on EPA model in LD 1629 
Adjusted Total Operating 
Allocation based on EPS model 
approved in PL 2003, c. 504 
Adjusted Total Operating 
Allocation based on EPS model 
in LD 1629 
Total State & Local cost based 
on EPS funding model (includes 
program costs, debt service and 
adjustments) approved in PL 
2003, c. 504 
Total State & Local cost based 
on EPS funding model (includes 
program costs, debt service and 
adjustments) in LD 1629 
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 
80.82% 
82.00% 
84.00% 
88.00% 
80.82% 
82.00% 
86.25% 
93.00% 
1,015,819,375 
1,033,413,982 
1,066,905,558 
1,131,428,894 
1,015,819,375 
1,033,413,982 
1,095,483,385 
1,195,714,626 
1,467,408,432 
1,518,173,106 
1,537,199,970 
1,618,879,589 
1,467,408,432 
1,518,173,106 
1,565,777,797 
1,683,165,321 
49.89% 
47.81% 
49.00% 
49.25% 
49.89% 
47.81% 
50.00% 
52.50% 
753,227,985 
797,298,197 
782,888,899 
883,661,794 
29,660,913 
86,363,596 
* No adjustment in fiscal year 2003-04 and fiscal year 2004-05 
LR2165(5) - Fiscal Note - Page 3 of 4 
This bill includes a General Fund appropriation of $34,350,000 in fiscal year 2005-06 to support the additional costs 
of the expansion of the Maine Residents Property Tax program. It also includes $97,163 for the administrative costs 
I 
associated with this expansion. 
This bill also provides for a limited local option sales and use tax. The revenue associated with this provision can not 
be estimated at this time and will depend on the number and size of the municipalities that elect to impose this tax. 
This bill also includes a one-time General Fund appropriation of$956,561 in fiscal year 2005-06 for Maine Revenue 
Services for certain costs associated with establishing a municipal local option sales and use tax. 
LR2165(5) - Fiscal Note - Page 4 of 4