Governor Janet Mills released a change package this week that aims to address some of Maine’s most pressing and urgent problems, including housing, homelessness, food insecurity, emergency medical services, and continued workforce development efforts.
The change package is an amendment to LD 258, legislation that includes the remaining budget initiatives for Fiscal Years 2024-2025 that were not included in the current services budget passed by the Legislature and signed by the Governor last month.
Maine’s Constitution requires a balanced budget, which prompted the Governor to introduce the change package today after the nonpartisan Revenue Forecasting Committee recognized $223 million in one-time funding available for Fiscal Year 2023 and projected a limited increase of $71 million in revenue for Fiscal Years 2024-2025 followed by a plateau in revenues for Fiscal Years 2026-2027.
In the change package, the Governor proposes using surplus and projected revenues to tackle Maine’s housing shortage; to fund food services and emergency shelters to address homelessness; and to strengthen Maine’s system of emergency medical services, among other initiatives.
The Governor also proposes investments to strengthen Maine’s economy, including funding proven workforce development strategies and the recently unveiled Dirigo Business Incentive Program, and doubling the Credit for Child Care Expenses to make child care more affordable for Maine parents. She also proposes additional funding for infrastructure repair, like school renovations, drinking and wastewater improvements, and culvert replacement, allowing the State to draw down more matching Federal funds for projects across the state.
Highlights of the Governor’s proposed change package include:
- Building More Housing: Adds $50 million to the Governor’s original $30 million housing proposal for a new total of $80 million to build more affordable housing in Maine for workers and their families through:
- $35 million for the Rural Affordable Rental Housing Program, an initiative of the Governor’s Maine Jobs & Recovery Plan that supports development of new and refurbished rental housing in rural communities. To date, the program is anticipated to create up to 130 new rental units, including properties in Bath, Belfast, Houlton, Madison, Fort Fairfield, Norway, Presque Isle, Rockland, and Waterville, which by law, must remain affordable for 45 years.
- $35 million for the Low-Income Housing Tax Credit program, the central financing program for affordable housing development. These State funds are matched with Federal and private funds to accelerate affordable housing development and are estimated to support up to 350 new housing units in the coming two years, which by law, must remain affordable for 45 years.
- $10 million to establish an Innovation Fund for Attainable Housing to accelerate housing production by supporting housing solutions un able to be addressed by existing programs. The fund will support rental options for households with incomes up to 80 percent of area median and homeownership options for households earning up to 120 percent of area median income. Other initiatives may include housing solutions for tourism and hospitality workers; financial incentives for mixed-income housing; or support for accessory dwelling units, which Maine homeowners will soon have the right to build on their property if they choose.
- Establishing the Housing First Program: This provision creates a Housing First Program within the Maine Department of Health and Human Services, consistent with Governor Mills’ promise to sign “housing first” legislation in her State of the Budget Address. This program would facilitate services to residents of “housing first” properties, which are separately funded and developed to provide permanent housing to persons who have been chronically homeless. In addition, this provision would fund technical assistance for development of housing first properties, to be administered by MaineHousing.
- Supporting Emergency Shelters to Address Homelessness: Adds $12 million in one-time funding to the Emergency Housing Relief Fund created by Governor Mills and the Legislature in 2022 to support emergency housing needs in communities across Maine. Specifically, these funds will be used to extend housing supports to individuals and families now in transitional housing and expand support for shelters and other efforts to help individuals and families experiencing homelessness. This funding builds on the $43 million provided by the Governor and the Legislature over the past year to address homelessness.
- Tackling Food Insecurity: $2 million in one-time funding to the Maine Department of Agriculture, Conservation and Forestry to create a food hub capital investment grant that will result in up to 10,000 prepared meals per day for homeless, sheltered, or other food-insecure people.
- Strengthening Emergency Medical Services: $31 million in one-time funding to establish the Maine Emergency Medical Services Sustainability and Resiliency Grant Program to provide grants to Maine-based emergency medical services throughout the state to ensure continued access to high-quality emergency medical services.
- Modernizing Maine’s Business Incentive Program: $4.6 million in ongoing funding to establish the Dirigo Business Incentive program, a newly proposed replacement for the outdated Pine Tree Development Zone program that willbetter reflect the current needs of Maine’s economy.
- Building the Workforce: $5 million in one-time funding for a workforce attraction pilot program aimed at recent college graduates; expanding the Maine Career Exploration program to allow additional high school students the opportunity to have paid work experiences; and enhancing recruitment and job-related supports targeted to groups who are underrepresented in Maine’s workforce, including older workers and people who have disabilities.
- Strengthening Apprenticeships: $2.3 million in ongoing funding for the Maine Apprenticeship Program to support training programs designed to meet the specific needs of Maine employers through on-the-job learning and related classroom instruction. Registered apprenticeships and pre-apprenticeships are highly effective tools for workers to build their skill set and connect to high-wage careers and for employers to recruit and retain workers. In 2022, Maine apprentices who completed their program increased their average wages by 43 percent.
- Making Child Care More Affordable: $4 million in ongoing funding to double the Credit for Child Care Expenses, a refundable State income tax credit that helps working families pay expenses for the care of children and dependents. The expanded benefit will double the current state credit from 25 percent to 50 percent of the Federal credit for child and dependent care expenses and from 50 percent to 100 percent if qualified expenses are related to a quality child care provider. This doubles the average benefit to $360.
- Improving Child Safety Through Strong Families: $1 million in one-time funds to launch the Child Safety and Family Well-Being Plan (PDF), a new framework released by the Mills Administration to guide policymakers and community members in keeping Maine children safe by keeping families strong. The Maine Department of Health and Human Services will use the funding to launch an education campaign to encourage parents to seek information and help as well as the importance of communities’ role in raising the next generation. Funding will also be provided to Maine-based organizations to develop enhanced and coordinated strategies around community-based efforts to strengthen families in Maine.
- Strengthening Children’s Behavioral Health Services: $4.9 million in ongoing funding to establish a High-Fidelity Wrap-Around program for Medicaid-eligible youth to provide coordinated community services, training, and other supports for children with behavioral health needs and their families as part of the Children’s Behavioral Health Services Plan.
- Modernizing Maine’s Schools: $50 million in one-time funding to replenish the School Revolving Renovation Fund, which provides no-interest loans for school renovations and repairs across the state. This would be Governor Mills’ third investment in the fund.
- Improving Water Systems: Adds $22 million in one-time funding to the Governor’s originally proposed $14 million for a new total of $36 million to improve drinking and wastewater infrastructure across Maine, preserving clean water, protecting public health, and reducing costs for taxpayers and ratepayers. The enhanced funding will allow the State to match increased Federal funding available through the Bipartisan Infrastructure Law and other Federal drinking water and wastewater programs.
- Protecting Vital Infrastructure: $10 million in one-time funding to the Maine Department of Transportation’s Infrastructure Adaptation Fund for culvert, resilience and adaptation investments through municipal grants and matching funds for Federal projects. These could include state or local culverts at risk of washout, road systems that flood during heavy storms, or coastal infrastructure vulnerable to increased storm surges due to rising sea levels.
- Offshore Wind Port Preparation: $12 million investment in Maine’s deep-water ports and other infrastructure to support the offshore wind industry and create local and regional supply chain and workforce opportunities. This funding would support planning, design, and permitting for port investments, as well as ongoing collaboration with individuals, communities, and businesses.
- Supporting Maine’s Dairy Industry: Dedicates $1.5 million in one-time funding to the Dairy Stabilization Fund. This new initiative directs the administrator of the Maine Milk Pool to distribute to qualifying in-state milk producers a one-time payment to help counter pandemic volatility to farmers who produced milk and reported production information to the Maine Milk Commission in the calendar year 2022 and are currently participating in the Maine Dairy Stabilization Program, also known as the Tier Program.
- Delivering Energy Cost Relief for Low-Income Maine People: Provides $15 million to temporarily expand eligibility for the Low-Income Assistance Program (LIAP), which helps low-income homeowners and renters in Maine with their electricity costs, as determined by the Maine Public Utilities Commission.
- Supporting Maine State Retirees: Dedicates $19.8 million for a one-time 3 percent cost-of-living adjustment (COLA) for retired State employees. The one-time adjustment would provide a maximum benefit of $726 and an average benefit of $527 to approximately 37,600 state sponsored plan retirees.
- Strengthening Maine’s Judicial System: $3.2 million in ongoing funding to create four trial court judgeships to address the backlog of cases, along with deputy marshals and clerks to help facilitate court operations, fulfilling the Governor’s promise from her State of the Budget Address earlier this year.
The change package also proposes repealing the Service Provider Tax on health care providers, effective January 1, 2025. Repealing the tax will resolve a longstanding dispute with the Federal government that dates back to a 2018 warning from the U.S. Centers for Medicare and Medicaid Services that the nearly 20-year-old tax was allegedly in violation of Federal law. This proposal repeals the tax, replaces the lost revenue with General Fund revenue to continue supporting MaineCare services, and dedicates additional revenue to the Medicaid Stabilization Fund in the event that the Federal government issues a disallowance for past use of the tax, as it has warned it may do. Get information about the proposal.
In total, LD 258 and the change package propose $432 million in appropriations and $455 million in transfers. As required by the Maine Constitution, the proposal is balanced and would result in an overall General Fund biennial budget of $10.318 billion, a limited increase from the Governor’s original proposal of $10.282 billion. It also leaves $12 million available for the Legislature’s consideration.