Maine lawmakers will attempt to overhaul the state’s school funding formula that has long been criticized by school officials as unfair.

Legislation submitted Tuesday would adjust several aspects of the current model to address issues such as community poverty levels, special education and regional cost of living. The bill, LD 2226, will have a public hearing at 10 a.m. Monday.

The Essential Programs and Services formula, commonly known as EPS, was rolled out in 2005. There have been several efforts to reform it over the years — district leaders have described it as inequitable and say some of its components have become increasingly antiquated — but the last major attempt in 2013 didn’t lead to any changes.

This time could be different. Districts around the state are beginning their budget processes for the next fiscal year and dealing with rapidly rising costs, and legislators seem eager to seriously consider an overhaul.

Two years ago, the education committee directed the nonpartisan Maine Education Policy Research Institute to study the topic. The institute delivered its findings over several presentations in 2025 and provided formal recommendations in early February, after which the committee initiated a bill based on the researchers’ suggestions.

“The core goals are to update so that we have an accurate reflection of the actual minimum costs that are present today,” Amy Johnson, co-director of MEPRI, said when she presented the recommendations last month. “And also to look at different ways to distribute state subsidy to improve how that works.”

The complex EPS formula calculates how much districts need to provide “essential” educational services based largely on pupil count, then determines how much of that cost the state will cover, derived from the local property tax valuation. Some districts receive less than 10% of their funding from the state, while others receive more than 80%.

One major proposal in the new bill is to integrate a district’s rate of economically disadvantaged students into the formula.

To account for the fact that property tax valuations might not accurately reflect the wealth of a community — like in coastal towns with high rates of seasonal residents — the bill proposes factoring in that rate to both the calculation side of the formula and the assessment of the district’s ability to pay. It’s based on the number of students eligible for free or reduced school meals, and researchers say it’s a good proxy for the poverty rate in the population.

“This is not about increasing more subsidy from the state, this is about changing how the subsidy is allocated out to districts, where districts that have more poverty can get more support from the state,” Johnson said.

Another major change laid out in the bill would update how regional adjustments to teacher salaries are made. Currently, those variations rely on a labor market area model that hasn’t been updated in two decades. The bill would replace that with a national cost-of-living index that is reviewed constantly.

The bill would also reform several aspects of the special education components of the formula, including eliminating a provision that superintendents say unfairly benefits wealthier districts.

The current formula starts by looking at the number of students with Individualized Education Plans (IEPs), then makes additional adjustments for those with more intense needs or who attend out-of-district programs. However, that number is then compared to the district’s total special education spending from the previous year, and if it’s higher than the calculated value, the district just receives the higher amount. LD 2226 proposes setting a cap at 80% of the value of the difference between those two numbers to reduce that inequity.

It also includes several proposed adjustments to how transportation costs, professional development and out-of-district special education tuition are accounted for in the formula.

Some provisions outlined in the bill are set to kick in during the 2027-28 school year, while others are undated, according to the draft legislation.

Hanging over the discussion of reform is the idea that any change to the formula would result in proverbial “winners” and “losers.” Researchers modeled the impact of their proposed changes on funding for each of the state’s school districts, with details on how many districts gained or lost under each of the proposed adjustments.

School districts are anxious to see reforms to the formula. Portland school board Chair Sarah Lentz has been critical of the existing formula during early discussions on the budget for her district. Portland is expected to receive $4 million less in state funding this year.

“It’s not just Portland,” Lentz said at a board meeting last week. “Any city that has high valuation, this formula just doesn’t work as intended.”

Biddeford Superintendent Jeremy Ray is also calling for reforms and recently published an analysis of how lower-income municipalities are underserved by the current formula.

“The way schools are funded right now means districts like Biddeford are left out to dry,” Rep. Marc Malon, a Democrat who represents part of the city, said of Ray’s report. “I don’t think there’s intent behind that, but changes are needed.”

Staff Writer Sydney Richelieu contributed reporting.