If Maine caps state contributions to the Maine State Retirement System for teacher retirement costs at 3% growth, forcing school districts to cover the rest, does that count as an unfunded 'state mandate' under Article IX, Section 21?

Plain-English summary

Governor Angus King's proposed General Appropriations Act for FY 1996 and 1997 (LD 706) included a Part G that would cap the State's payments to the Maine State Retirement System (MSRS) for teacher retirement costs. Specifically, the State's contribution could not grow more than 3 percent over the previous fiscal year's aggregate teacher salary base; any retirement costs exceeding that cap, driven for example by larger teacher raises, would have to be paid by the School Administrative Unit (SAU) employing the teacher. The Appropriations Committee asked whether that constituted an unfunded state mandate under Me. Const. art. IX, § 21, which (when triggered) requires either 90% state funding or a 2/3 supermajority for passage.

The AG concluded it did not. Section 21 applies when the State "require[s] a local unit of government to expand or modify that unit's activities so as to necessitate additional expenditure from local revenues." A cap on a state subsidy, the AG reasoned, does not "require" municipalities or school districts to do anything. They are free to scale back the service in response to lower state support. If they choose to continue providing the same service, the resulting expenditure flows from their own decision, not from a state command.

The AG generalized the principle: reductions in state subsidies, including partial reductions like a growth cap, do not trigger § 21. The constitutional provision protects against the State imposing new or expanded activities; it does not freeze subsidy levels in place.

Currency note

This opinion was issued in 1995. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

What does Me. Const. art. IX, § 21 actually require?

When the State requires a local unit of government to expand or modify activities in a way that necessitates additional local-revenue spending, the State must either provide 90 percent of the funding or pass the measure by 2/3 of all members elected to each House. The provision was added to limit unfunded mandates.

Why isn't a state-subsidy cut a "mandate"?

Because the State is not telling the local unit to do anything new. The State is paying less. The local unit can adjust its own spending, raise local revenue, or change the service. The decision to keep the service the same comes from the local unit, so the resulting cost is local, not state-imposed.

Did this rule apply only to total elimination of a subsidy?

No. The AG explicitly extended the same reasoning to a partial cap: "the State government would not violate the constitutional provision if it simply limited the percentage by which a subsidy could increase."

Does this rule still apply today?

The AG opinion is from 1995, applying Me. Const. art. IX, § 21 as it then read. Verify current case law and AG opinions before relying on the rule today. The Law Court may have refined the doctrine in later cases.

Background and statutory framework

Me. Const. art. IX, § 21 ("State mandates"):

For the purpose of more fairly apportioning the cost of government and providing local property tax relief, the State may not require a local unit of government to expand or modify that unit's activities so as to necessitate additional expenditure from local revenues unless the State provides annually 90% of the funding for these expenditures from State funds not previously appropriated to that local unit of government. Legislation implementing this section or requiring a specific expenditure as an exception to this requirement may be enacted upon the vote of 2/3 of all members elected to each House.

The MSRS teacher-retirement subsidy is part of Maine's general scheme for distributing state aid to public elementary and secondary education. School Administrative Units pay teachers; the State traditionally subsidizes the retirement contributions associated with those salaries. The Governor's cap proposal in Part G of LD 706 would have limited the year-over-year growth of the State's contribution to 3 percent of the aggregate teacher salary base, pushing the excess onto SAUs.

Citations

• Me. Const. art. IX, § 21 (state mandates: 90% funding or 2/3 vote requirement)
• LD 706, Part G (the proposed cap on state MSRS teacher-retirement contributions)

Source

• Landing page: https://www.maine.gov/legis/lawlib/lldl/agops/agops.htm
• Original PDF: https://lldc.mainelegislature.org/Open/AG/Opinions/1995/ag_19950320.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

95-1

ANDREW KETTERER
ATTORNEY GENERAL

STATE OF MAINE
DEPARTMENT OF THE ATTORNEY GENERAL
STATE HOUSE STATION 6
AUGUSTA, MAINE 04333

March 20, 1995

Senator Dana C. Hanley
Representative George J. Kerr
Chairs, Joint Standing Committee on Appropriations and Financial Affairs
State House Station #5
Augusta, ME 04333

Dear Senator Hanley and Representative Kerr:

I am writing in response to your inquiry of March 7, 1995, concerning the proposal of Governor King to limit the State's contribution to the Maine State Retirement System for teacher retirement costs in the upcoming biennium. Your question is whether such action, if enacted, would constitute a "state mandate" within the meaning of Article IX, Section 21 of the Maine Constitution. For the reasons which follow, it is the Opinion of this Department that the Governor's proposal would not constitute a mandate.

The Governor's proposal is contained in Part G of Legislative Document 706, the General Appropriations Act for Fiscal Years 1996 and 1997. As you describe it, the proposal would limit any increase in the amount of money which the State would contribute to the Retirement System for teacher retirement costs to 3 percent of the aggregate salary base of the teachers in the preceding fiscal year. Any retirement costs in excess of this limit, caused by an increase in a teacher's salary of more than 3 percent over the preceding fiscal year, would have to be borne by the School Administrative Unit employing the teacher. Your question is whether such an action, if adopted by the Legislature, would count as a "state mandate" within the meaning of the constitutional provision.

Article IX, Section 21 of the Maine Constitution provides, in pertinent part:

For the purpose of more fairly apportioning the cost of government and providing local property tax relief, the State may not require a local unit of government to expand or modify that unit's activities so as to necessitate additional expenditure from local revenues [unless the State provides 90 percent of the funding or enacts the measure by a vote of 2/3 of all members elected to each House].

In the view of this Department, the proposal which you describe would not be covered by this provision. Broadly speaking, the suggestion which your question raises is that if the Legislature has once appropriated a certain amount of money to subsidize municipal activities, such as the amount of money annually appropriated for the subsidization of secondary school education in the State, it is obliged by Article IX, Section 21 to continue to fund municipal activities at that level. In the view of this Department, a reduction in the amount of subsidization of municipalities does not constitute a "requirement" that local units of government expand or modify their activities, within the meaning of the constitutional provision. A decision by the Legislature to reduce funding to municipalities does not "require" municipalities to do anything, but merely means that, if they wish at their option to continue to operate at the same level as before, they would have to find additional funding sources. That obligation, however, is not one which the Legislature would have imposed upon them, but would result from a decision by an individual municipality to continue to provide a particular service in the absence of State subsidy. The State government would not violate Article IX, Section 21 by withdrawing all or part of the subsidy. Similarly, the State government would not violate the constitutional provision if it simply limited the percentage by which a subsidy could increase.

I hope the foregoing answers your question. Please feel free to reinquire if further clarification is necessary.

Sincerely,

ANDREW KETTERER
Attorney General

AK:sw