An Act To Make Minor Technical Changes to Maine's Spending Growth Benchmarks
Maine Legislature, Session 122, LD 1909
Committee: Appropriations and Financial Affairs
Sponsors: WOODBURY
Amends: 5 MRSA §1535, 5 MRSA §1536, 30-A MRSA §706-A

Legislative Document 
No. 1909 
H.P.1350 
House of Representatives, January 4,2006 
An Act To Make Minor Technical Changes to Maine's Spending 
Growth Benchmarks 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed. 
Presented by Representative WOODBURY of Yarmouth. 
Printed nn recycled paper 
/rj~/J7.~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 5 MRSA §IS31, sub-§2, as enacted by PL 2005, c. 2, Pt. 
A, §5 and affected by §14, is amended to read: 
2. 
Average real personal income growth. 
"Average real 
personal 
income 
growth" 
means 
the 
average 
for 
the prior 
calendar years, ending with the most recent calendar year for 
which data is available, 
o~ the percent change in personal income 
in this State, as estimated by the United States Department of 
Commerce, Bureau of Economic Analysis, less the percent change in 
the Consumer Price Index for the calendar year. 
For purposes of 
this subsection, "Consumer Price Index" has the same meaning as 
in Title 36, 
section 5402, 
subsection 1. 
The 
average 
real 
personal income growth is determined by October 1st, annually, by 
the Director of the State Planning Office within the Executive 
Department. 
Sec. 2. 5 MRSA §IS31, sub-§3, as enacted by PL 2005, c. 2, Pte 
A, §5 and affected by §14, is amended to read: 
3. 
Baseline General Fund revenue. 
"Baseline General Fund 
revenue" 
means 
the 
recommended General 
Fund 
revenue 
forecast 
reported by the Revenue Forecasting Committee in its December 1st 
report of even-numbered years, increased by ~Re-e6~4ffia~eQ-ame~Rt 
ef-~--geReFal-~-FeyeR~e-~~,--4f-~--feF-~~--eRae~eQ 
eRaR~es-~~~-~~~~-aRQ--~~-~~--B~FQeR--~~-~~-tRat 
feFeeast the net reduction of General Fund reyenue. if any. for 
all enacted changes affecting state and local tax burden since 
the previous December 1st report of even-numbered years of the 
Revenue Forecasting Committee. 
Sec. 3. SMRSA§lS34,sub-§1, as enacted by PL 2005, c. 2, Pt. 
A, §5 and affected by §14, is amended to read: 
1. 
Establishment of General Fund appropriation limitation. 
As of December 1st of each even-numbered year, there must be 
established a General Fund appropriation liffiit limitation for the 
ensuing 
biennium. 
The 
General 
Fund 
appropriation 
liffiit 
limitation applies to all General Fund appropriations, except 
that the additional cost for essential programs and services for 
kindergarten to grade 
education under Title 20-A, 
chapter 
606-B over the fiscal year 
2004-05 appropriation for general 
purpose aid for local schools is excluded from the General Fund 
appropriation limitation until the state share of that cost 
reaches 55% of the total state and local cost. 
A. 
For the first fiscal year of the biennium, the General 
Fund appropriation limitation is equal to the biennial base 
year 
appropriation 
multiplied 
by 
one 
plus 
the 
growth 
limitation factor in subsection 2. 
B. 
For the 
2nd year of the biennium, 
the General Fund 
appropriation 
±iffii~ 
limitation 
is 
the 
General 
Fund 
appropriation limitation of the first year of the biennium 
biennial base year 
approp~iation multiplied by one plus the 
growth limitation factor in subsection 2. 
Sec. 4. 5 MRSA §1535, as enacted by PL 2005, c. 2, Pt. A, §5 
and affected by §14, is amended to read: 
§1535. General Fund transfers to stabilization fund 
Baseline General Fund revenue, as recommended by the Revenue 
Forecasting 
~effiffiissieA Committee 
and authorized in accordance 
with chapter l51-B, 
and other available budgeted General Fund 
resources that exceed the General Fund appropriation limitation 
established 
by 
section 
1534 
plus 
the 
additional 
cost 
for 
essential programs 
and services for kindergarten to grade 
education under Title 20-A, chapter 606-B over the fiscal year 
2004-05 appropriation for general purpose aid for local schools 
until the state share Of that cost reaches 55% of the total ~~ 
and local cost must be transferred to the stabilization fund. 
The State Controller, at the close of each fiscal year, shall 
transfer the available balance remaining in the General Fund to 
the 
stabilization 
fund 
after 
all 
required 
deductions 
of 
appropriations, 
budgeted 
financial 
commitments 
and 
other 
adjustments considered necessary by the State Controller. 
Sec. 5. 5 MRSA §1536, sub-§l, as enacted by PL 2005, c. 2, Pt. 
A, §5 and affected by §14, is amended to read: 
1. 
First priority reserve. 
The State Controller shall, as 
the first priority at the close of each fiscal year, 
f'esef'Ye 
transfer from the unappropriated surplus of the General Fund an 
amount equal to the excess of total baseline General Fund revenue 
received over accepted estimates in that fiscal year aAe-~~aASfef' 
~Ra~-affie~A~-a~-~Re-Be~iARiR~-ef-~Re-ReH~-fisea±-yeaF as follows: 
A. 
Thirty-two percent to the stabilization fund; 
B. 
Thirty-two percent to the Retirement 
Allowance 
Fund 
established in section 17251; and 
C. 
Sixteen 
percent 
to 
the 
Reserve 
for 
General 
Fund 
Operating Capital. 
Sec. 6. 30-A MRSA §706-A, sub-§I, 1JA, as enacted by PL 2005, 
c. 2, Pt. a, §1 and affected by §§2 and 4 and c. 12, Pt. WW, §14, 
is amended to read: 
A. 
"Average real personal income growth" meaas-t:ae-ave'Ea~e 
~9'E-~:ae-~~9~-~~~~-~~,~~~it~-~&&-m9S~-~eeeat 
ealeaQa~-~--f9F-~~-Ga~a-~~-~~~~r-9~-~~-pe~eeat 
e:aaa~e-ia-pe~s9£~1-~~~~~~~~~~~r~-&s~~a~-9y-t:ae 
YaiteQ-~~~-~~~--9~--G9mmeFeer-~~-~--Ee9a9mie 
AaalysisT--~SS-~~-~€eB~--e:aaa~e--~&-~-~~S~~--P~iee 
laQeH--.f-€>-£---~he---ea-leaQa~--~-.----f:9F--~-£f>€l£~---G-f.---t:ai6 
6\i9Seeti9aT-.!'.c~--P.F-.i:ee--IaQe*!!--has--~he-~ame--me-an-~-as 
ia-~i~-le-~~-~~~-~r-sa&see~i&&-l has the Same meaning 
as under Title 5, section 1531, subsection 2. 
Sec. 7. 30-A MRSA §706-A, sub-§I, 1JC, as enacted by PL 2005, 
c. 2, Pt. a, §1 and affected by §§2 and 4 and c. 12, Pt. WW, §14, 
is amended to read: 
C. 
"Forecasted inflation" 
meaas--t:ae--ave~a~e--am9\iat--eE 
e:aaa~e-~--~he-.c~--P.F~e&-~~~e~--~F--~:ae-~~--yea~6 
t:aat-~~-~~--ef-~~-~~-8ieaai\im--~~~-hy--t:ae 
beaSea6\iS-~~-~-€>-£~~~-bemmi66ieR--~-~~~-NevemBe'E 
*st--F-ep-G-F-1;.--E>-f--eveR-R~RIbe-£--yea'Es has the same meaning as 
under Title 5, section 1531, subsection 6. 
Sec. 8. 30-A MRSA §706-A, sub-§I, 1JE, as enacted by PL 2005, 
c. 2, Pt. a, §l and affected by §§2 and 4 and c. 12, Pt. WW, §14, 
is amended to read: 
E. 
"State and local tax burden" 
meaas-~he-~-ot-a-l--arAO-a-B-t,.-eE 
sEaEe-~R4-~~-~~-~aiG-By-Ma4£e-~~~~~--$~~~~-eE 
iaeemeT-~-£e~e-£ffi4£e£--aaRaally-~-~:ae-~~~-~~--Asse6Se'E 
BaSeQ-eR-4~~~-~-£~~~~it~~~~~paF-~B-~-9f-bemme'EeeT 
beRs\is-~~~-8\i'Eea\i--E>-f-~~-ARalysis has the same 
meaning as under Title 5, section 1531, subsection 9. 
Sec. 9. 30-A MRSA §706-A. sub-§2, 1JB, as enacted by PL 2005, 
c. 2, Pt. a, §l and affected by §§2 and 4 and c. 12, Pt. WW, §14, 
is amended to read: 
a. 
The county assessment limit for subsequent fiscal years 
is 
the 
county 
assessment 
limit 
for 
the 
preceding year 
multiplied by one plus the growth limitation factor pursuant 
to subsection 3. 
Sec. 10. 30-A MRSA §706-A, sub-§4, as enacted by PL 2005, c. 
2, Pt. a, §1 and affected by §§2 and 4 and c. 12, Pt. WW, §14, is 
repealed and the following enacted in its place: 
4. 
Adj1,J,~nt for chcmqe. in state funding. 
I f 
the State 
provides a net increase or decrease in funding to a county for 
existing services 
funded in whole or in part by the county 
assessment, other than reguired state mandate funds pursuant to 
section 
5685 
that 
do 
not displace current county assessment 
~enditures, adjustments to the county assessment limit apply as 
described in this subsection. 
For purposes of this subsection, 
"net increase or decrease in funding" means the amount of funds 
received by the county from the State in that fiscal year, with 
respect to services funded in whole or in part by the county 
assessment, less the product of the following: the amount of such 
funds received in the prior fiscal year multiplied by one plus 
the growth limitation factor described in subsection 3. 
A. 
If a county receives a net increase in funding in any 
fiscal year, the county shall reduce its county assessment 
limit in that year in an amount egual to the net increase in 
funding. 
If a county receives a net increase in funding in 
any fiscal year for which its county assessment limit for 
that year cannot be adjusted, the county shall reduce its 
county assessment limit in the following year in an amount 
egual to the net increase in funding. 
B. 
If a county receives a net decrease in funding in any 
fiscal year, the county may increase its county assessment 
limit in that year in an amount egual to the net decrease in 
funding. 
If a county receives a net decrease in funding in 
any fiscal year for which its county assessment limit for 
that year cannot be adjusted, the county may increase its 
county assessment limit in the following year in an amount 
egual to the net decrease in funding. 
Sec. 11. 30-A MRS A §5721-A, sub-§l, ,A, as enacted by PL 2005, 
c. 2, Pt. C, §1 and affected by §§3 and 5 and c. 12, Pt. WW, §16, 
is amended to read: 
A. 
"Average real personal income growth" 
RleaIl.6--t-he--a~FaEJe 
~eF-~Re-~~4e~-~~-~~-~~r~~~it~-&~-RleS&-Feeea& 
ea±eadaF-~--feF-~~~-Ga&a-4£--a~~~~r-e~-~~-peFeeat 
eaaaEJe-~Il.-~e~6eRa~-4~~~~-t~~~~~r~-&s&~aB&G-gy-tae 
Ya~ted-~&a&&&-~-t~--e~--GemmeFeer-~~-~--geeaeRlie 
Aaa±ysisT--~&&--t-he--~~£e£~--eaaaEJe--~a--t-he--~e££~~--PFiee 
ladeH---'f-&£---&~--€alell.da£--~-.----~eF--1iHH~£e£---o-f.--tais 
sHgseetieaT-.!.'-C~--P.Fj,.e.e.-±ll.deH!!--has--&ae-£affi9---rRe-an-i-ng--a6 
ia-~4~le-~~-~~~-~r-&~&&ee&i&a-± has the same meaning 
as in Title 5, section 1531, subsection 2. 
Sec. 12. 30-A MRS A §5721-A, sub-§l, ,B, as enacted by PL 2005, 
c. 2, Pt. C, §1 and affected by §§3 and 5 and c. 12, Pt. WW, §16, 
is amended to read: 
B. 
"Forecasted 
inflation" 
RleaRs--l::ae--avelPal3e--aRlelol.Rl::--e€ 
eaaRl3e-~--~a~-~~~~--~r~-~BQe~--~~-t:ae-~~--yeaIP6 
l::aal::-~r&-~~--e€--~-~~-9ieRRi~--~~~-hy--6ae 
beR6eR6lo1.6-~~-~~~a£~~~--beRlRlissieR--~-~~~--NeveRlgeF 
lsl::--repe-r-t---o-t---e--...e-B--B-1ifA.*r-yeaFs has the same meaning as in 
Title 5, section 1531, subsection 6. 
Sec. 13. 30·A MRSA §5721.A, sub·§I, tE, as enacted by PL 2005, 
c. 2, Pt. C, §1 and affected by §§3 and 5 and c. 12, Pt. WW, §16, 
is amended to read: 
E. 
"State and local tax burden" 
RleaRs--t£e--t-o-t.-a-I--afIIG-1.*-B-~-e€ 
st:at:e-aBQ-~~~--t~-¥a~-9y-Ma~Be-~~~~~-$~r~~~-e€ 
iReeRleT-~-Qe-te-rmi£eQ--aRRloI.ally-~-t:ae--S~~-~~--A6sesseF 
9asea-eR-Qa-ta-~~~-t~~it~-S~~-~¥ar~B-~-ef-beRlRleFeeT 
beRslol.s-~~~-8lo1.Fealol.-~-~~-ARalysis has the same 
meaning as in Title 5, section 1531, subsection 9. 
Sec. 14. 30·A MRS A §5721·A, sub-§2. ~B, as enacted by PL 2005, 
c. 2, Pt. C, §1 and affected by §§3 and 5 and c. 12, Pt. WW, §16, 
is amended to read: 
B. 
The property tax levy limit for subsequent fiscal years 
is 
the 
property tax 
levy limit for 
the 
preceding year 
multiplied by ~o~n~e~p~l~u~s the growth limitation factor pursuant 
to subsection 3. 
Sec. 15. 30·A MRSA §5721·A, sub·§4, as enacted by PL 2005, c. 
2, Pt. C, §l and affected by §§3 and 5 and c. 12, Pt. WW, §16, is 
repealed and the following enacted in its place: 
32. 
4. 
Adjustment for change in state funding. 
If the State 
provides a net increase or decrease in funding to a municipality 
for existing services funded in whole or in part by the property 
tax levy, other than reguired state mandate funds pursuant to 
section 
5685 
that 
do 
not 
displace 
current 
property 
tax 
expenditures, adjustments to the property tax levy limit apply as 
described in this subsection. 
For purposes of this subsection, 
"net increase or decrease in funding" means the amount of funds 
received by the municipality from the State in that fiscal year, 
with respect to services funded in whole or in part by the 
property tax levy, compared to the product of the following: 
the 
amount of such funds received in the prior fiscal year multiplied 
by one plus the growth limi~on factor described in subsection 
3. 
For 
purposes 
of 
determining 
adjustments 
under 
this 
subsection, changes in state funding do not include changes in 
state funding for general assistance under Title 22, section 4311 
or state funding under the Urban-Rural Initiative Program under 
Title 23, section 1803-B if those changes are the result of the 
operation of the formulas for calculation of state funding under 
those sections but do include changes in funding that are the 
result of a statutory change in the formula for calculation of 
state funding under those sections. 
A. 
If a municipality receives a net increase in funding in 
any fiscal year. the municipality shall reduce its property 
tax levy limit in that year in an amount equal to the net 
increase in funding. 
If a 
municipality receives 
a 
net 
increase 
in 
funding 
in 
any 
fiscal 
year 
for 
which its 
p_roperty tax levy limit for t_hat year cannot be adjusted. 
the municipality shall reduce its property tax levy limit in 
the following year in an amount equal to the net increase in 
funding. 
B. 
If a municipality receives a net decrease in funding in 
any fiscal year. the municipality may increase its property 
tax levy limit in that year in an amount equal to the net 
decrease in funding. 
If a 
municipality receives 
a 
net 
decrease 
in 
funding 
in 
any 
fiscal 
year 
for 
which its 
property tax levy limit for that year cannot be adjusted. 
the municipality may increase its property tax levy limit in 
the following year in an amount equal to the net decrease in 
funding. 
This bill makes 
changes to the state. 
enacted in 2005. 
SUMMARY 
the 
following 
technical 
and 
county and municipal spending 
clarifying 
limitations 
1. 
The bill clarifies the definition of "baseline General 
Fund revenue" and the treatment of education funding increases 
until the state share of education funding reaches 55%. 
2. 
It 
provides 
consistency 
in 
the 
use 
of 
the 
term 
"appropriation limitation." 
3. 
It corrects language describing the transfer of amounts 
to reserve accounts. 
4. 
It corrects several references to the calculation of 
county and municipal limitations by specifying that adjustments 
are calculated by multiplying the prior year's limit by one plus 
the growth limitation factor. 
5. 
It establishes the Director of the State Planning Office 
within 
the 
Executive 
Department 
as 
the 
person 
determining 
"average real personal income growth" and the annual date for 
that 
determination 
limitations. 
for 
purposes 
of 
determining 
various 
6. 
It provides that adjustments to county and municipal 
limitations should be available for decreases in state funding as 
well as increases. 
7. 
It clarifies that municipal limitations do not need to 
be adjusted for changes in state reimbursement under the general 
assistance program or the Urban-Rural Initiative Program if those 
changes are the result of operation of the statutory formulas 
under those programs.