Sec. 1. 20-A MRSA §15602, sub-§18 is enacted to read:

18.__Maximum loss provision.__Notwithstanding any other provision of this chapter or chapter 606-A, the following maximum loss provision is established for fiscal year 2003-04 and for each fiscal year thereafter to provide for maximum stability of the amounts of state subsidy provided to school administrative units through the general purpose aid for local schools program.

A.__Beginning in fiscal year 2003-04, the state share of subsidy for each fiscal year for operating costs, program costs excluding the state share of bus purchases and minimum subsidy may not be less than 90% of the state share of subsidy for the preceding fiscal year for operating costs, program costs excluding the state share of bus purchases, minimum subsidy and the hold harmless or maximum loss provision actually distributed in the preceding fiscal year.

B.__Beginning in fiscal year 2003-04, if the property fiscal capacity used to determine a school administrative unit's fiscal capacity for each fiscal year increases from the preceding fiscal year or if the number of pupils used to determine a school administrative unit's subsidizable pupil count for each fiscal year decreases from the preceding fiscal year, then a school administrative unit may not receive less than 90% of the state share of subsidy that it received in the preceding fiscal year.

SUMMARY

This bill provides for an ongoing "maximum loss" provision for the general purpose aid for local schools program. The bill requires that, beginning in fiscal year 2003-04 and for each fiscal year thereafter, the Legislature provide each school administrative unit with at least 90% of the state share of subsidy that it received for the preceding fiscal year for operating costs, program costs excluding the state share of bus purchases and minimum subsidy.