Sec. 1. 20-A MRSA §15652, sub-§4-A is enacted to read:

4-A.__Normalized regional cost adjustment.__"Normalized regional cost adjustment" means a factor that is used to adjust a median household income value up or down to reflect variations in regional costs.__The statewide normalized regional cost adjustment is one.

Sec. 2. 20-A MRSA §15657, sub-§2, as amended by PL 1999, c. 401, Pt. GG, §9, is further amended to read:

2. Local median household income. The local median household income is divided by the statewide average median household income. That amount is divided by the normalized regional cost adjustment as defined in section 15652, subsection 4-A. The final result is multiplied by an income weight of 0.15. The department shall use local median household income data as estimated at the fiscal year 1997-98 level until final Federal Decennial Census figures are established for the year 2000. The fiscal year 1997-98 estimated census figures must be adjusted so that no municipality's census figure exceeds twice the state average percentage increase from fiscal year 1996-97 to fiscal year 1997-98.

SUMMARY

The purpose of this bill is restore to the school funding formula an annual adjustment to reflect variations in costs. The School Finance Act of 1995 used to factor in the school funding formula an adjustment to reflect variations in regional costs. Public Law 1999, chapter 401, Part GG, section 5 eliminated this adjustment. This bill restores that adjustment into the formula.