An Act To Provide Equity in Education Funding
Maine Legislature, Session 128, LD 0741
Committee: Taxation
Sponsors: STEARNS, FARRIN, TUELL
Amends: 20-A MRSA §15689, 36 MRSA §1818

Legislative Document
No. 741
H.P. 521
House of Representatives, March 2, 2017
An Act To Provide Equity in Education Funding
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative STEARNS of Guilford.
Cosponsored by Representatives: FARRIN of Norridgewock, TUELL of East Machias.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  20-A MRSA §15689, sub-§1, as amended by PL 2015, c. 389, Pt. C, §7, 
is further amended to read: 
1.  Minimum state allocation.  Each school administrative unit must be guaranteed a 
minimum state share of its total allocation that is an amount equal to the greater of the 
following: 
A.  The sum of the following calculations: 
(1)  Multiplying 5% of each school administrative unit's essential programs and 
services per-pupil elementary rate by the average number of resident kindergarten 
to grade 8 pupils as determined under section 15674, subsection 1, paragraph C, 
subparagraph (1); and 
(2)  Multiplying 5% of each school administrative unit's essential programs and 
services per-pupil secondary rate by the average number of resident grade 9 to 
grade 12 pupils as determined under section 15674, subsection 1, paragraph C, 
subparagraph (1). 
The 5% factor in subparagraphs (1) and (2) must be replaced by:  4% for the 2009-10 
funding year including funds provided under Title XIV of the State Fiscal 
Stabilization Fund of the American Recovery and Reinvestment Act of 2009; 3% for 
the 2010-11 funding year including funds provided under  Title XIV of the State 
Fiscal Stabilization Fund of the American Recovery and Reinvestment Act of 2009; 
3% for the 2011-12 funding year; and 3% for the 2012-13 funding year and 
subsequent years; and. 
B.  The school administrative unit's special education costs as calculated pursuant to 
section 15681-A, subsection 2 multiplied by the following transition percentages: 
(1)  In fiscal year 2005-06, 84%; 
(2)  In fiscal year 2006-07, 84%; 
(3)  In fiscal year 2007-08, 84%;  
(4)  In fiscal year 2008-09, 45%;  
(5)  In fiscal year 2009-10, 40% including funds provided under Title XIV of the 
State Fiscal Stabilization Fund of the American Recovery and Reinvestment Act 
of 2009; 
(6)  In fiscal year 2010-11, 35% including funds provided under Title XIV of the 
State Fiscal Stabilization Fund of the American Recovery and Reinvestment Act 
of 2009;  
(7)  In fiscal year 2011-12, 30%; 
(8)  In fiscal year 2012-13, 30%; 
(9)  In fiscal year 2013-14, 35%;  
(10)  In fiscal year 2014-15, 30%; 
(11)  In fiscal year 2015-16, 30%; 
(12)  In fiscal year 2016-17, 30%; 
(13)  In fiscal year 2017-18, 35%; 
(14)  In fiscal year 2018-19, 40%; 
(15)  In fiscal year 2019-20, 45%; and 
(16)  In fiscal year 2020-21 and succeeding years, 50%. 
These funds must be an adjustment to the school administrative unit's state and local 
allocation after the state and local allocation has been adjusted for debt service pursuant 
to subsection 2.  Beginning July 1, 2007, these funds must be an adjustment to the school 
administrative unit's state and local allocation in addition to the state and local allocation 
that has been adjusted for debt service pursuant to subsection 2. 
Sec. 2.  20-A MRSA §15689, sub-§1-B, as enacted by PL 2007, c. 668, §38, is 
repealed. 
Sec. 3.  20-A MRSA §15689, sub-§11, as amended by PL 2013, c. 1, Pt. C, §5, is 
repealed. 
Sec. 4.  36 MRSA §1818 is enacted to read: 
§1818.  Municipal local option sales tax for education funding 
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A.  "Participating municipality" means a municipality that has imposed a local option 
sales tax pursuant to this section. 
B.  "Sales tax base" means those items subject to sales taxation under this Part. 
2.  Authorization to impose local option sales tax.  A municipality that is a member 
of a school administrative unit receiving only the minimum state share for education 
funding under Title 20-A, section 15689, subsection 1 may, by referendum conducted 
pursuant to subsection 8, impose a local option sales tax of up to 1% on the sales tax base. 
3.  Notify assessor.  A municipality that imposes a local option sales tax under 
subsection 2 shall notify the assessor at least 90 days before the local option sales tax is 
effective. 
4.  Administration.  Retailers in a participating municipality shall transfer the 
revenue from the local option sales tax at the time and in the manner provided in section 
1951-A for the transfer of state sales tax revenue.  The tax is subject to the same 
enforcement provisions, interest, penalties and administrative actions as other taxes 
assessed under this Part. 
5.  Distribution of revenue.  Each month, the assessor shall determine the amount of 
revenue attributable to each participating municipality under this section, subtract the 
costs of administering this section and certify the net amount due each participating 
municipality to the Treasurer of State.  The Treasurer of State shall make monthly 
payments to municipal treasurers of the net amounts certified by the assessor under this 
subsection. 
For purposes of this subsection, "costs of administering this section" means the lesser of 
the actual cost to the assessor of administering this section and 2% of the total revenue 
generated by municipalities that impose local option sales taxes. 
6.  Use of revenue by participating municipality.  The revenue raised by the 
imposition of a local option sales tax under this section must be held by the municipality 
in a special revenue account established for that purpose and used for funding 
kindergarten to grade 12 education and reducing property tax rates. 
7.  Effect on revenue sharing and other state aid programs.  Revenue received by 
the State pursuant to subsection 5 may not be considered to be receipts from the taxes 
imposed under this Part for the purpose of transfers to the Local Government Fund under 
Title 30-A, section 5681.  Revenue received pursuant to subsection 5 may not be used to 
reduce or eliminate any funding otherwise due the county or participating municipality 
under any provision of law providing aid to the county or participating municipality, 
including, but not limited to, aid for schools, roads, public assistance or jails. 
8.  Referendum.  The question of whether to impose a local option sales tax under 
this section must be submitted to the legal voters of a municipality that seeks to impose 
the local option sales tax. 
The petition process and voting 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 Title 30-A, section 2528.  The voting at elections must be held and 
conducted in accordance with Title 21-A.  The municipal clerk shall prepare the required 
ballots, which must contain substantially the following question: 
"Do you favor a local option sales tax of up to 1% to be imposed by 
[insert name of municipality] for the purpose of funding kindergarten to 
grade 12 education and reducing the property tax rate?" 
The voters shall indicate by a cross or check mark placed against the word "Yes" or "No" 
their opinion of the same. 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 tax may be discontinued by referendum conducted in the same 
manner as the referendum adopting the local option sales tax under this section. 
9.  Effective date of local option sales tax; acceptance by voters.  The local option 
sales 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 legal 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. 
SUMMARY 
This bill allows a municipality that is a member of a school administrative unit 
receiving the minimum state share for education funding to impose by referendum a local 
option sales tax of up to 1% to be used for funding kindergarten to grade 12 education 
and reducing the property tax rate.  This bill also repeals a provision of the education 
funding laws calculating a minimum state share of costs based on a percentage of special 
education costs.