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TO: Superintendents of Schools

FROM: J. Duke Albanese, Commissioner

DATE: January 8, 2001

RE: Preliminary FY 2001-2002 Subsidy Printouts


Enclosed is a copy of the preliminary ED261 computer printout for your school unit(s).

As you know, I have proposed as a Recommended Funding Level a 6% increase in General Purpose Aid, an amount totalling $703,979,757 in FY02. In considering this request, Governor King has been wrestling with the challenge of a tight biennial budget, weighing the needs of education vis vis all other needs that warrant government support. The Governor must present a balanced budget for the biennium using the revenue projections as they stand at this time. After considerable deliberation and many tough choices, Governor King has recommended funding GPA at $697,338,438, an increase of 5% for FY02. Additionally, he proposed $718,258,591 for FY03, a 3% increase. Regarding FY03, the Governor has indicated his intent to target GPA as a priority, increasing funding in the second year, if at all possible.

The Department continues to implement the four-year plan for a more equitable school funding formula, as enacted by the 119th Legislature during its first session. For FY02, this plan includes an increase in the per-pupil guarantee to the targeted amount of $4,687, and a decrease in the subsidy reduction percentage for program costs to 4.98%. Both of these targets are now in Maine statute. By FY03, this plan will achieve a per-pupil guarantee of $5,204, equal to the estimated statewide per-pupil expenditure for that year, and it will also finally eliminate the subsidy reduction methodology for program costs.

Keeping with recent practice, this printout is based on the Governors proposed budget of $697,338,438, hoping that the final GPA appropriation will not be below this level. Please note that the ED261 printout is preliminary only. The appropriation amount and/or subsidy calculation methods might be changed by the Legislature. Further, a $2 million amount, proposed as a Hold Harmless Adjustment, is not included in this printout, since the distribution methodology must be determined by the Legislature. For these reasons, and for the other reasons cited below, please be advised that this printout is provided for planning purposes only.

In analysing your districts printout(s), keep in mind the power of the variables of state valuation and student enrollment. For your district, subsidy is largely determined, by your trends in state valuation and enrollment. If all other factors are consistent with the state average trends but you are losing students at a rate greater than the state average, it will impact your subsidy in a negative manner even though we now average enrollment over four (4) census dates. Similiarly, if all other factors are consistent with the state average trends but your state valuation is climbing at a pace greater than the state average, you would receive less subsidy.

The following additional points should be noted:


                     Adult Education pupil counts, per 20-A MRSA, Section 8605(2) on line 29, are estimates only. These will be replaced with actual counts as soon as the data for the second half of the year is available (Report of Adult Education for Subsidy Purposes July 1, 2000 to December 31, 2000).

                     Subsidies for approved bus purchases and for approved leases may change following receipt of the unit's EF-M-45 for FY 2001.

                     NO ESTIMATES of the principal and interest amounts for unbonded school construction projects are included in this printout. Exact amounts will be added to a revised printout for your unit when actual repayment schedules are received.

                     The estimated subsidy reduction amounts for the Maine Indian Education school units will be replaced with final amounts, when available.

                     A school administrative unit's subsidy may be reduced, as a result of (a) not raising the full amount of the required local share of the Foundation Allocation, or (b) an unallocated ending balance exceeding 3% of the FY 2001 budget, which has not been rectified in the unit's FY 2002 budget.

                     Special Education amounts on lines 32, 33A, and 33B amounts have been reduced by the Out-of-District placement adjustments received in June 2000.

If you have any questions regarding the information in this letter, please call Suzan Cameron or Joanne Allen of the M.I.S. Team at 624-6790 (a new telephone number!)

As the first session of the 120th Legislature unfolds, be assured that the Department of Education will work closely with the Maine School Superintendents Association and the Maine School Boards Association to keep you apprised of developments regarding General Purpose Aid.