An Act To Promote Economic Recovery in Maine
Maine Legislature, Session 123, LD 1581
Committee: Taxation
Sponsors: HOLMAN, ROBINSON
Amends: 5 MRSA §1534, 5 MRSA §1664, 20-A MRSA §15671, 30-A MRSA §706-A, 36 MRSA §7301

Legislative Document 
No. ISS 1 
H.P.1106 
House of Representatives, March 20, 2007 
An Act To Promote Economic Recovery in Maine 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representati ve MILLETT of Waterford. 
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MILLICENT M. MacFARLAND 
Clerk 
Cosponsored by Representatives: HOLMAN of Fayette, ROBINSON of Raymond. 
Primed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 5 MRSA §1534, sub-§2, ~A, as enacted by PL 2005, c. 2, Pt. A, §5 and 
affected by §14, is amended to read: 
A. 
For fiscal years when the State Tax Assessor has determined that the state and 
local tax burden ranks if. tHe HigHest 1/3 above the median of all states, the growth 
limitation factor is average real personal income growth, but no more than 2.75%, 
plus average population growth. 
Sec. 2. 5 MRS A §1534, sub-§2, ~, as enacted by PL 2005, c. 2, Pt. A, §5 and 
affected by § 14, is amended to read: 
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B. 
For fiscal years when the state and local tax burden ranks iA the middle 1/3 at or 
below the median of all states, as determined by the State Tax Assessor, the growth 
limitation factor is average real personal income growth plus forecasted inflation plus 
average population growth. 
Sec. 3. 5 MRSA §1664, sub-§l, V, as enacted by PL 2005, c. 601, §1, is 
amended to read: 
F. 
Include statements of the bonded indebtedness of the State Government showing 
the debt redemption requirements, the debt authorized and unissued and the condition 
of the sinking funds; ftftd 
Sec. 4. 5 MRS A §1664, sub-§l, ~G, as enacted by PL 2005, c. 601, §1, IS 
amended to read: 
G. 
Contain any statements relative to the financial plan that the Governor-elect or 
the Governor considers desirable or that may be required by the Legislature.,.; and 
Sec. 5. 5 MRSA §1664, sub-§l, ~ 
is enacted to read: 
H. Contain an analysis and projections of the State's state and local tax burden as 
required in subsection 6 and the State's progress toward achieving the State's tax 
burden goal established in Title 36, section 7301. 
Sec. 6. 5 MRSA §1664, sub-§6 is enacted to read: 
6. Analysis and projections of tax burden. The Governor shall present as part of 
the budget document a financial plan that provides projections for each fiscal year 
through the fiscal year ending June 30, 2015 of the State's total personal income and the 
total state and local taxes broken down into major categories, including but not limited to: 
individual income tax, corporate income tax, sales and use taxes and local property taxes. 
The total state and local taxes must be reported in a manner consistent with the 
methodology used by the United States Department of Commerce, Bureau of the Census 
in its calculations of total state and local taxes. 
The financial plan must show the 
percentage equal to the total state and local taxes divided by the State's total personal 
income that represents the median value for the same percentage calculated for all states 
based on the most recent data available from the United States Department of Commerce. 
The financial plan must show the projections of Maine's tax burden percentage through 
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the fiscal year ending June 30, 2015 including projections of the effects ofthe Governor's 
proposed initiatives affecting state and local taxes. The financial plan must conclude with 
a summary of the initiatives necessary to achieve the goal established in Title 36, sectiun 
7301. 
Sec. 7. 20-A MRSA §15671, sub-§l, as amended by PL 2005, c. 2, Pt. D, §32 
and affected by §§72 and 74 and c. 12, Pt. WW, §18, is further amended to read: 
1. State and local partnership. The State and each local school administrative unit 
are jointly responsible for contributing to the cost of the components of essential 
programs and services described in this chapter. Except as otherwise provided in this 
subsection, for each fiscal year, the total cost of the components of essential programs 
and services may not exceed the prior fiscal year's costs multiplied by one plus the 
average real personal income growth rate as defined in Title 5, section 1665, subsection 
1, except that in no case may that rate exceed 2.75%. For fiscal years commencing after 
the state tax burden ranks iA tHe middle 113 at or below the median of all states, as 
calculated and certified by the State Tax Assessor, the total cost of the components of 
essential programs and services may not exceed the prior fiscal year's costs multiplied by 
one plus the average real personal income growth rate as defined in Title 5, section 1665, 
subsection I. The Legislature, by an affirmative vote of each House, may exceed the 
limitations on increases in the total cost of the components of essential programs and 
services provided in this subsection, as long as that vote is taken upon legislation stating 
that it is the Legislature's intent to override the limitation for that fiscal year. The state 
contribution to the cost of the components of essential programs and services, exclusive 
of federal funds that are provided and accounted for in the cost of the components of 
essential programs and services, must be made in accordance with this subsection: 
A. 
The level of the state share of funding attributable to the cost of the components 
of essential programs and services must be at least 50% of eligible state and local 
General Fund education costs statewide, no later than fiscal year 2006-07; and 
B. 
By fiscal year 2008-09 the state share of the total cost of funding public 
education from kindergarten to grade 12, as described by essential programs and 
services, must be 55%. Beginning in fiscal year 2005-06 and in each fiscal year until 
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fiscal year 2008-09, the state share of essential programs and services described costs 
must increase toward the 55% level required in fiscal year 2008-09. 
Beginning in fiscal year 2005-06 and in each fiscal year thereafter, the commissioner 
shall use the funding level determined in accordance with this section as the basis for a 
recommended funding level for the state share of the cost of the components of essential 
programs and services. 
Sec. 8. 30-A MRSA §706-A, sub-§3, ~A, as enacted by PL 2005, c. 2, Pt. B, § 1 
and affected by §§2 and 4 and c. 12, Pt. WW, § 14, is amended to read: 
A. 
For fiscal years when the State Tax Assessor has determined that the state and 
local tax burden ranks iA tHe HigHest 113 above the median of all states, the growth 
limitation factor is average real personal income growth but no more than 2.75%, 
plus the property growth factor. 
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Sec. 9. 30-A MRS A §706-A, sub-§3, ~, as enacted by PL 2005, c. 2, Pt. B, § I 
and affected by §§2 and 4 and c. 12, Pt. WW, § 14, is amended to read: 
B. 
For fiscal years when the state and local tax burden ranks iA the middle 1/3 at or 
below the median of all states, as determined by the State Tax Assessor, the growth 
limitation factor is the average real personal income growth plus forecasted inflation 
plus the property growth' factor. 
Sec. 10. 30-A MRSA §S721-A, sub-§3, ~A, as enacted by PL 2005, c. 2, Pt. C, 
§I and affected by §§3 and 5 and c. 12, Pt. WW, §16, is amended to read: 
A. 
For fiscal years when the State Tax Assessor has determined that the state and 
local tax burden ranks iA the highest 1/3 above the median of all states, the growth 
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limitation factor is average real personal income growth but no more than 2.75%, 
plus the property growth factor. 
Sec. 11. 30-A MRSA §S721-A, sub-§3, ~, as enacted by PL 2005, c. 2, Pt. C, 
§I and affected by §§3 and 5 and c. 12, Pt. WW, §16, is amended to read: 
B. 
For fiscal years when the state and local tax burden ranks iA the middle 1/3 at or 
below the median of all states, as determined by the State Tax Assessor, the growth 
limitation factor is the average real personal income growth plus forecasted inflation 
plus the property growth factor. 
Sec. 12. 36 MRSA §7301, first ~, as enacted by PL 2005, c. 2, Pt. H, §2, is 
amended to read: 
It is the goal and policy of the State that by 2015 the State's total state and local tax 
burden be ranked iA the middle 1/3 at or below the median of all states, as determined by 
the United States Census Bureau's most recent tax burden analysis, adjusted by the 
assessor to reflect the State's llAiqlle expeAditlire tax relief programs. For the pumoses of 
Title 5, section 1534, subsection 2; Title 30-A, section 706-A, subsection 3 and Title 30-
A, section 5 nl-A, subsection 3; and this section, the assessor shall calculate the State's 
state and local tax burden relative to other states using the data that represents the State's 
most recent total state and local tax collections divided by the State's total personal 
income. 
SUMMARY 
This bill changes the State's tax burden goal for 2015 to be at or below the median 
for all states and requires that the calculation of the State's state and local tax burden 
relative to other states be based solely on Maine's state and local tax collections without 
adjustments by the State Tax Assessor for the State's unique expenditure tax relief 
programs. The bill also requires the Governor to include in the biennial budget document 
a detailed financial plan that calculates a target percentage and the legislative changes 
required to achieve Maine's state and local tax burden goal. 
This bill also adjusts the spending limits enacted by Public Law 2005, chapter 2 to 
require the State's state and local tax burden to be at or below the median of all states, 
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rather than within the middle 1/3 of states, before the growth limitation factor for the 
state, municipal, county and school district spending limits are changed . 
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