Maine ties school funding adjustments to living costs and student income

The commissioner adjusts each school unit’s operating allocation for regional differences in living costs. The adjustment applies to each school administrative unit’s total operating allocation. A statewide education policy research institute calculates the adjustment using one or more nationwide indexes. The adjustment must align with the salary matrix so the minimum index value is sufficient to pay the minimum teacher salary. It applies only to eligible teacher pay and benefits and pay for other school staff. The adjustment starts in fiscal year 2027–28 and applies in each later fiscal year.

The local contribution calculation adjusts a property-based amount for relative income levels. The calculation applies when determining a municipality’s local contribution to school funding. The adjustment is 10% and uses an index based on the share of resident pupils identified as economically disadvantaged. The income adjustment begins in fiscal year 2027–28.

The state limits reductions in the part of each school unit’s subsidy tied to the regional adjustment and local contribution. These provisions cover each school administrative unit’s state subsidy tied to the regional adjustment and local contribution. The text says the state may not reduce this combined amount from the previous year beginning in fiscal year 2027–28 and until fiscal year 2030–31. It also sets a 25% maximum reduction for fiscal year 2030–31 and a 50% maximum for fiscal year 2031–32. Beginning in fiscal year 2032–33, the state subsidy for all school units is adjusted by the regional adjustment and local contribution. The transition begins in fiscal year 2027–28. The text sets reduction limits for fiscal years 2030–31 and 2031–32, then applies the adjustment to all units beginning in 2032–33.

The Maine Education Policy Research Institute studies the school funding formula and reports its findings to the Legislature’s education committee. The study covers Maine’s essential programs and services school funding formula. The report must examine inflation, possible poverty measures, scenarios using five-year averages for pupil counts and property values, and whether the formula reflects essential costs and provides adequate funding. The education committee may report a related bill to the 133rd Legislature in 2027. The report is due by January 15, 2027. The committee may report a related bill to the 133rd Legislature in 2027.