Lawmakers on the Education and Cultural Affairs Committee on Thursday unanimously approved an amended version of a bill to reform the state’s school funding formula.

If the bill makes it through the House and Senate, it will be the first time the formula has changed since it was introduced two decades ago.

For years, education leaders, lawmakers and researchers have said the formula does not accurately reflect modern realities of school budgets. In 2024, the Legislature tasked a state research group with studying ways to make the formula more equitable for school districts, and earlier this session the education committee adapted those recommendations into a bill.

School district leaders from around Maine supported the reforms at a public hearing early this month.

The original bill included major changes like updating regional salary adjustments to be linked to modern cost-of-living models, altering how special education funding is calculated and factoring the local poverty rate into a district’s ability to pay.

The current formula calculates a district’s ability to pay for its educational expenses based on property tax valuations. The bill proposes adding the rate of economically disadvantaged students into the assessment as a proxy for the local poverty rate. Researchers provided multiple models for how that adjustment would affect the amount of money districts get from the state, integrating the poverty rate at different weights.

Using a 10% weight, the majority of districts would get more state funding under the changes, while 34 districts would see a reduction. Some school leaders who would receive less state funding under the revised formula called on the lawmakers to add a “hold harmless” clause so they won’t have to contend with a huge single-year drop in state subsidy. 

Thursday’s amendment, sponsored by Rep. Kelly Murphy, D-Scarborough, integrates the 10% poverty rate. Additionally, every district would be held harmless for three years, which would allow a gradual phase-in of the new funding calculations.

Murphy’s amendment also eliminated several changes to special education that were included in the original version of the bill.

“There’s so much more to know about special ed that we haven’t been able to assess,” she said.

Further, the bill calls on the research group to continue studying the effect of inflation on the funding formula, and other elements of the state’s model.

Committee members praised the researchers and Maine Department of Education for their work on the reports, and celebrated their progress on reforming something that has long been targeted.

“The regional adjustment has not been changed by the Legislature since 2005 when it was initially implemented,” said Rep. Michael Brennan, D-Portland. “Just by the mere fact that we’re doing that, it is a significant step forward.”