An Act to Amend the
Maine Legislature, Session 132, LD 2226
Committee Amendment CA_A_H1046 (House)
Amends: 20-A MRSA §15676, 20-A MRSA §15682-A, 20-A MRSA §15688, 20-A MRSA §15699

COMMITTEE AMENDMENT "/r-V" to H.P. 1503, L.D. 2226, "An Act to Amend the
Essential Programs and Services School Funding Formula"
Amend the bill by stalking out everything after the enacting clause and inserting the
following:
'See. 1. 20-A MRSA §15676, sub-§l, as amended by PL 2017,c. 284, Pt. C,§31,
is further amended to read:
1. Teaching staff costs. Beguming July 1,2017, the salary and benefit costs for school
level teaching staff that are necessary to carry out this Act, calculated in accordance with
section 15678 and adjusted by the regional adjustment under section 15682 prior to fiscal
year 2027-28 or under section 15682-A beeinmne in fiscal year 2027-28;
Sec. 2. 20-A MRSA §15676, sub-§2, as amended by PL 2017,c. 284, Pt, C,§31,
is further amended to read:
2. Other staff costs. Beginning July 1, 2017, the salary and benefit costs for school-
level staff who are not teachers, but including substitute teachers, that are necessary to carry
out this Act, calculated in accordance with section 15679 and adjusted by the regional
adjustment under section 15682 prior to fiscal year 2027-28 or under section 15682-A
beginnmg in fiscal year 2027-28; and
Sec. 3. 20-AMRSA §15682, as amended by PL 2011, c. 419, §2, is further amended
to read:
§15682. Regional adjustment prior to fiscal year 2027-28
The commissioner shall make a regional adjustment in the total operating allocation
for each school administrative unit determined pursuant to section 15683. The regional
adjustment must be based on the regional differences in teacher salary costs, for labor
market areas m which the school administrative unit is located, as computed by a statewide
education policy research institute, and must be applied only to appropriate teacher salary
and benefits costs as calculated under section 15678 and salary and benefit costs of other
school-level staff who are not teachers as calculated under section 15679. Beginning in
COMMITTEE AMENDMENT
COMMnTEE AMENDMENT "l\ " to H.P. 1503, L.D. 2226
fiscal year 2012-13, and for oaoh subsoquont fisoul year in each fiscal year prior to fiscal
year 2027-28, the commissioner shall make a regional adjustment in the total operating
allocation for each school administrative unit determined pursuant to section 15683. The
regional adjustment must be based on the regional differences in teacher salary costs, for
labor market areas in which the school administrative unit is located, as computed by a
statewide education policy research institute, and must be applied only to appropriate
teacher salary costs as calculated under section 15678 and salary costs of other school-level
staff who are not teachers as calculated under section 15679.
Sec. 4. 20-A MRSA §15682-A is enacted to read:
815682-A. Reeional adjustment beeinnine in fiscal year 2027-28
Beainnine in fiscal year 2027-28. and for each subsequent fiscal year. the
commissioner shall make a reeional adjustment in the total ooeratme allocation for each
school administrative unit determined pursuant to section 15683. The regional adjustment
must be based on the regional differences in the costof living, as computed_ by a statewide
education policy research institute using a nationwide index or combination of nationwide
indices. The repional adjustment must align with the salary matrix described in section
15677 so that the minimum index value is sufficient to pay the minimum teacher salary
established under chapter 505. The regional adjustment must be applied only to aTOropriate
teacher salary and benefit costs as calculated under section 15678 and salar/ costs of other
school-level staff who are not teachers as calculated under section 15679^
Sec. 5. 20-A MRSA §15688, sub-§3-A, ^[A, as enacted by PL 2005, c. 2, Pt. D,
§56 and affected by §§72 and 74 and c. 12, Ft. WW, §18, is amended by amending
subparagraph (2) to read:
(2) The total of the fall-value education mill rate calculated in section 15671-A,
subsection 2 multiplied by the property fiscal capacity of the municipality and.
beemnine in fiscal year 2027-28. adjusted by 10% for relative income level usme
an index calculated by a statewide education uolicv research institute. The index
must be based on the jiercentaee of resident mioils that are identifier as
economically disadvantaeed under section 15675, subsection 2.
Sec. 6. 20-A MRSA §15688, sub-§3-A, IfB, as amended by PL 2015, c. 494, Pt.
A, § 13, is further amended by amending subparagraph (2) to read:
(2) The total of the full-value education mill rate calculated in section 15671-A,
subsection 2 multiplied by the property fiscal capacity of the municipality and.
beeinnmg in fiscal year 2027-28. adjusted by 10% for relative income level usine
an index calculated by a statewide education policy research institute. Thejndex
must be based on the percentage of resident pupi^ are identified as
7 economically disadvantaeed under section 15675, subsection 2.
Sec. 7. 20-A MRSA §15699 is enacted to read:
§15699. State subsidy transition period
Beginning in fiscal year 2027-28 and until fiscal year 2030-31. the State may not reduce
from the previous fiscal year the amount of a school administrative unit's state subsidy
attributable to the combination of the regional adjustment calculated pursuant to section
Page2-132LR3057(02)
COMMITTEE AMENDMENT
COMMnTEE AMENDMENT "i\ " to H.P. 1503, L.D. 2226
,0"
15682-A and the local contribution calculated pursuant to section 15688. subsection 3-A.
Beeinnine in fiscal year 2030-31 .the followmg Drovisions applv.
1. Fiscal year 2030-31. In fiscal year 203 0-31. the amount of a school administrative
unit's state subsidy attributable to the combination of the reeional adjustment calculated
pursuant to section 15682-A and the local contribution calcula^^^ to^ection
15688. subsection 3-A may not be reduced by the State by more than 25% from the
previous fiscal year.
2. Fiscal year 2031-32. In fiscal year 2031-32. the amount of a school administrative
unit's state subsidy attributable to the combination of the regional adjustment calculated
pursuant to section 15682-A and the local contribution calculated pursuant to section
15688, subsection 3-A may not be reduced by the State by more than 50% from the
oreyious fiscal year.
3. Fiscal year 2032-33 and subsequent fiscal years. In fiscal year 2032-33 and in
each subsemient fiscal year^ the state subsidy for aJLschool admmistrativejmite
by the repional adjustment calculated pursuant to section 15682-A and the local
contribution calculated pursuant to section 15688. subsection. 3-A,.
Sec. 8. Maine Education Policy Research Institute; further study. The
Maine Education Policy Research Institute shall study the components of the essential
programs and services school funding formula established in the Maine Revised Statutes,
Title 20-A, chapter 606-B, The institute shall submit a report no later than January 15,
2027 to the j oint standing committee of the Legislature having jurisdiction over education
matters. The report must include, but is not limited to, the following:
1. An analysis of the impact of inflation on the essential programs and services school
funding formula since fiscal year 2019-20 and recommendations on how to mitigate its
effects or account for its impact on the formula;
2. Recommendations related to a poverty indicator that reflects overall community
income rather fhan only the income of families with school-aged children;
3. Modeling one or more scenarios using a 5-year average for pupil counts and property
valuation; and
4. Recommendations on which components of the funding formula are considered
essential and whether the funding formula accounts for the tme costs of those components
and provides adequate funding to school administrative units.
The joint standing committee is authorized to report out a bill related to the report to
the 133rd Legislature in 2027.'
Amend the bill by relettermg or renumbering any nonconsecutive Part letter or section
number to read consecutively.
SUMMARY
This amendment, which is the majority report of the committee, does the following.
1. It removes sections of the bill related to state payments for high-cost m-district and
out-of-district special education placements, instructional staff support cost components, a
cap on the special education maintenance of effort adjustment, special education budgetary
COMMITTEE AMENDMENT
COMMTTTEE AMENDMENT "f-\'
, fV1' COMMTTTEE AMENDMENT "M-" to H.P.1503, L.D. 2226
hardship eligibility, state payments for transportation, economically disadvantaged student
weights and the special education prevalence threshold.
2, It clarifies that changes to the regional adjustment begin in fiscal year 2027-28.
3. It provides that a school administrative unit's ability to pay must be adjusted by 10%
for relative income.
4, It provides that, beginning iti fiscal year 2027-28 and until fiscal year 2030-31, the
State may not reduce the portion of a school administrative unit's state subsidy attributable
to the regional adjustment and local contribution calculation and provides a 3-year
transition period beginning in fiscal year 203 0-31 .
5. It directs the Maine Education PoUcy Research Institute to study the components of
the essential programs and services school funding formula and report back to the
Legislature by January 15, 2027.
FISCAL NOTE REQUIRED
(See attached)
COMMITTEE AMENDMENT
Revised; 04/09/26 t-Ki-
LD 2226 LR 3057(02)
An Act to Amend the Essential Programs and Services School Funding Formula
Fiscal Note for Bill as Amended by Committee Amendment 'Vf
Committee: Education and Cultural Affairs
Fiscal Note Required: Yes
Fiscal Note
Future biennium cost increase - General Fund
Future biennium cost increase - School Administrative Units
Projections Projections
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29
Net Cost (Savings)
General Fund $0 $0 $44,720,000 $44,720,000
^ppropriations/AlIocations
General Fund $0 $0 $44,720,000 $44,720,000
Fiscal Detail and Notes
This bill makes several changes to the school funding formula under the Essential Programs and Services Funding Act, beginning
in fiscal year 2027-28, which are expected to increase the State's share of the total cost of education, These changes include:
updating the regional adjustment to staff salaries to account for current labor market variation across the State (which is estimated
to increase the total cost of education by $70,700,000); introducing a variable mill rate that accounts for a school administrative
unit's (SAU's) property tax base and poverty rate (which will not change the total cost of education but will redistribute it among
SAUs and shift a small portion from SAUs to the State); and preserving the State subsidy for SAUs that would otherwise receive a
lower subsidy as a result of the prior two changes (which will not change the total cost of education but will redistribute it from
SAUs to the State).
Collectively, these changes are expected to increase the total cost of education by $70,700,000 per year, beginning in fiscal year
2027-28, The State's share of this cost is expected to be $44,720,000 per year, of which $39,600,000 will fund the State's share of
the regional adjustment to staff salaries; $20,000 will fund the slight reduction in the collective local share due to the new variable
mill rate; and $5,100,000 will preserve the State subsidy for SAUs that would otherwise see their subsidies decrease, The
additional cost to local school units is estimated to be $25,980 per year, These estimates are based on funding data for fiscal year
2026-27 and are intended to be illustrative, The actual changes to the total cost of education and State and local shares cannot be
determined until funding data for fiscal year 2027-28 is available,
The Maine Education Policy Research Institute is expected to complete the further study required by this bill within its existing
scope of work and therefore will not require additional iunding.
LR3057(02) - Fiscal Note - Page 1 of 1