131st MAINE LEGISLATURE
		LD 1064		LR 204(02)
	An Act to Increase the Minimum Teacher Salary
	Fiscal Note for Bill as Amended by Committee Amendment " "
	Committee: Education and Cultural Affairs
	Fiscal Note Required: Yes
Fiscal Note
Future biennium cost increase - School administrative units
			FY 2023-24	FY 2024-25	Projections  FY 2025-26	Projections  FY 2026-27
Net Cost (Savings)
	General Fund		$0	$3,518,176	$5,990,141	$8,899,997
Appropriations/Allocations
	General Fund		$0	$3,518,176	$5,990,141	$8,899,997
Fiscal Detail and Notes
	This bill includes ongoing General Fund appropriations totaling $3,518,176 beginning in fiscal year 2024-25 to the General Purpose Aid for Local Schools program within the Department of Education for the costs associated with raising the minimum salaries for certified teachers and career and technical education teachers.
	Incrementally increasing the minimum salary for certified teachers and career and technical education teachers, currently at $40,000 per year in fiscal year 2023-24, by $2,500 per year until it reaches $50,000 per year in fiscal year 2027-28 will increase the total cost of public education from kindergarten to grade 12 and the State's share of that cost beginning in fiscal year 2024-25.  The Department of Education estimates the cost of this provision to be $3,367,642 in fiscal year 2024-25, $5,733,838 in fiscal year 2025-26, $8,519,189 in fiscal year 2026-27 and $11,014,116 in fiscal year 2027-28.  This legislation provides that the State fund 100% of the cost of increasing the minimum salary for teachers through fiscal year 2026-27, but does not require 100% state funding for the final year of the incremental increase, fiscal year 2027-28.  This bill includes a General Fund appropriation of $3,367,642 in fiscal year 2024-25 to the General Purpose Aid for Local Schools program to fund the increase.  Future General Fund appropriations in the amount indicated above to fully fund the salary increase through fiscal year 2026-27 will be required.  This fiscal note assumes that costs beyond fiscal year 2026-27 will be shared by both the State and local school administrative units.
	Additionally, the increase in salaries will also increase the employer contribution for the normal cost component of the Maine Public Employers Retirement System (MainePERS).  The rate for the normal cost component for fiscal year 2024-25 is 4.47%.  When this rate is applied to the projected increase in teacher salaries, the additional amount local school administrative units will have to pay to MainePERS for the normal cost of teacher retirement is estimated to be $150,534.  Future biennium costs are estimated to be $256,303 in fiscal year 2025-26 and $380,808 in fiscal year 2026-27.  This bill includes a General Fund appropriation to the General Purpose Aid for Local Schools program to fund this cost beginning in fiscal year 2024-25.
	Although not addressed in the bill, incrementally increasing minimum salary thresholds may put pressure on SAU's to raise salaries for other employees who are already above the minimum. Any additional salary increases SAU's may choose to provide would be fully funded by the SAU's unless the Commissioner of Education recommends adjusting the salary matrix within the essential programs and services funding model and these changes get implemented.