| 122nd MAINE LEGISLATURE | |||||||||
| LD 1 | LR 0328(02) | ||||||||
| An Act to Increase the State Share of Education Costs, Reduce Property Taxes and Reduce Government Spending at All Levels | |||||||||
| Fiscal Note for Bill as Amended by Committee Amendment " " | |||||||||
| Committee: Joint Select Committee on Property Tax Reform | |||||||||
| Fiscal Note Required: Yes | |||||||||
| Majority Report | |||||||||
| Fiscal Note | |||||||||
| Projections | Projections | ||||||||
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | ||||||
| Net Cost (Savings) | |||||||||
| General Fund | $ 29,678,528 | $ 16,751,144 | $ 32,806,416 | $ 41,288,094 | |||||
| Appropriations/Allocations | |||||||||
| General Fund | $ 13,806,717 | $ 585,039 | $ 15,079,495 | $ 21,430,377 | |||||
| Other Special Revenue Funds | $ 6,962,382 | $ 6,194,152 | $ 14,552,541 | $ 20,730,626 | |||||
| Revenue | |||||||||
| General Fund | $(15,871,811) | $(16,166,105) | $(17,726,921) | $(19,857,717) | |||||
| Other Special Revenue Funds | $ (870,605) | $ (886,749) | $ (972,363) | $ (1,089,242) | |||||
| Fiscal Detail and Notes | |||||||||
| General Fund Summary - Costs (Savings) | 2005-06 | 2006-07 | 2007-08 | 2008-09 | |||||
| Additional amount needed to fund EPS in bill above Governor's Current Services Budget Proposal for the 2006-2007 Biennium1 | $6,463,417 | $ (5,963,417) | $ - | $ - | |||||
| Additional amount needed to fund Efficient Delivery of Educational Services Fund 2 | $ 6,962,382 | $ 6,194,152 | $ 14,552,541 | $ 20,730,626 | |||||
| Homestead 50% @ $13,000 3 | $ 53,872 | $ 162,789 | $ 330,135 | $ 497,481 | |||||
| Homestead - Mandate Reimbursement | $ 115,000 | $ - | $ - | $ - | |||||
| Circuit Breaker Expansion 4 | $ 16,594,129 | $ 16,866,209 | $ 18,443,539 | $ 20,590,019 | |||||
| Individual Income Tax 5 | $ (722,318) | $ (700,104) | $ (716,618) | $ (732,302) | |||||
| State Planning Office | $ 50,000 | $ 50,000 | $ 50,000 | $ 50,000 | |||||
| Maine Revenue Services Administrative Costs | $ 162,046 | $ 141,515 | $ 146,819 | $ 152,270 | |||||
| Net General Fund Cost (Savings) | $ 29,678,528 | $ 16,751,144 | $ 32,806,416 | $ 41,288,094 | |||||
| Net Funding Contained in Budget | $ 4,481,802 | $ 4,445,590 | $ 4,423,817 | $ 4,416,359 | |||||
| Additional Amount Required | $ 25,196,726 | $ 12,305,554 | $ 28,382,599 | $ 36,871,735 | |||||
| 1 | Additional General Fund amount required is a function of funding EPS model as in LD 1 vs. what is included in the Governor's Proposed Current Services Budget for the 2006-2007 Biennium. It does not reflect the impact of IB 2003, Chapter 2, approved by the voters on June 8, 2004, which becomes operative in January of 2005, barring legislative action. | ||||||||
| 2 | The General Fund appropriations required to fund the State's share of the cost of Essential Programs and Services for FY 2005-06 and FY 2006-07, as proposed in this legislation, is included in the Governor's Proposed Current Services Budget for the 2006-2007 Biennium. Additional General Fund appropriations will be required to establish the Fund for the Efficient Delivery of Educational Services as a dedicated fund within the Department of Education which was approved by the voter's in IB 2003, c. 2. However, this bill differs from IB 2003, c. 2 in that it proposes to phase-in the requirement that 2% of the annual state appropriation for education be dedicated to providing incentive-based resources to those local school units or municipalities that develop sustainable cost savings in the delivery of educational services. It also allows for the funds to be used for transition adjustments in fiscal year 2005-06 only in order to minimize the adverse fiscal impact that may be experienced by some municipalities as a result of the phase-in of the Essential Programs and Services model. | ||||||||
| 3 | Appropriations required to fund the Homestead exemption at $13,000 with 50% reimbursement from the State to the Municipalities. | ||||||||
| 4 | Revenue loss from the expansion of the Maine Residents Property Tax program (Circuit Breaker). | ||||||||
| 5 | Increase in individual income tax revenue as a result of changes in the deductability of local property taxes. | ||||||||
| Other Impacts | |||||||||
| This bill establishes a General Fund appropriations limitation and limitations on county and municipal tax assessments. It also changes the authorized uses of the Maine Budget Stabilization Fund, the statutory cap on the balance of the fund and the methodology for determining transfers into the fund. | |||||||||
| The bill increases the percentage of a loan for learning space upgrades from the School Revolving Renovation Fund that may be forgiven. Increasing the percentage of a loan that may be forgiven may result in less money being available from the Fund for future projects. The impact to the Fund cannot be determined at this time. | |||||||||
| Local Government Fund Impact | 2005-06 | 2006-07 | 2007-08 | 2008-09 | |||||
| Revenue loss - Circuit Breaker expansion | $ (910,226) | $ (925,151) | $ (1,011,671) | $ (1,129,410) | |||||
| Revenue increase - Individual Income Tax | $ 39,621 | $ 38,402 | $ 39,308 | $ 40,168 | |||||
| Net Change | $ (870,605) | $ (886,749) | $ (972,363) | $ (1,089,242) | |||||
| This fiscal estimate is based on the Governor's draft budget proposals as presented on January 7, 2005 and may have to be revised based on final legislative actions. | |||||||||