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An Act To Amend the Definition of "Property Fiscal Capacity" in the School Funding Law To Address Inequities Affecting Municipalities Experiencing Significant Reductions in Value
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 20-A MRSA §15672, sub-§23, ¶C, as enacted by PL 2013, c. 203, §1, is repealed and the following enacted in its place:
 
C.  For fiscal year 2015-16 and each subsequent fiscal year:
 
(1) The average of the certified state valuations for the 3 most recent years prior to the most recently certified state valuation; or
 
(2) For a municipality with a most recently certified state valuation that was certified by the State Tax Assessor in recognition that the municipality experienced a net reduction in equalized municipal valuation attributable to a single property taxpayer of at least 2% from the equalized municipal valuation since the prior state valuation:
 
(a) For the first year, the most recently certified state valuation;
 
(b) For the 2nd year, the average of the certified state valuation for the year prior to the most recently certified state valuation and the most recently certified state valuation;
 
(c) For the 3rd year, the average of the certified state valuations for the 2 most recent years prior to the most recently certified state valuation and the most recently certified state valuation; and
 
(d) For the 4th and each subsequent year, the same as in subparagraph (1).
 
SUMMARY
Current law defines a municipality's fiscal capacity for the purpose of calculating the local share and state share of the cost of public kindergarten to grade 12 education as the average state valuation for the municipality over a 3-year period prior to the most recently certified state valuation. In order to avoid overstating the fiscal capacity of a municipality that has experienced a significant loss in value of 2% or more attributable to a single taxpayer, this bill resets the 3-year period to average state valuations for those municipalities going forward, beginning with the first year the municipality's certified state valuation reflects that significant loss in value.