Governor Janet Mills signed the revised Fiscal Year 2022-2023 biennial budget into law, making a historic investment in Maine public schools and keeping a promise from the Governor to meet the State’s obligation to pay 55 percent of the cost of K-12 education for the first time in the state’s history. The budget garnered strong, bipartisan support in the Legislature yesterday with the House approving it 123-23 and the Maine Senate approving it 32-2.
The budget, which is balanced, also fully restores revenue sharing with municipalities to five percent, provides a $300 hazard payment to Maine workers, and replenishes the Land for Maine’s Future Program with the first new funding in more than a decade. It does not raise taxes and sets money aside for emergencies by adding a minimum of $60 million to the Budget Stabilization Fund, bringing the total to $328.2 million — an historic high. Under the Mills Administration, the Budget Stabilization Fund has grown by more than $121 million.
The Governor was joined by Republican and Democratic legislative leadership and members of her Cabinet for the signing today. With the Governor’s signature, the law takes effect immediately.
In April, Maine’s nonpartisan Revenue Forecasting Committee (RFC)upgraded the State’s General Fund revenue forecast surpassing the amount of revenue that had been forecasted prior to the onset of the pandemic. The $8.5 billion budget draws on these revenues for Fiscal Years 2022-2023 and is $660 million lower than the RFC projects in General Fund revenue for Fiscal Years 2024-2025 .
This State’s solid financial standing is the result of the responsible fiscal moves Governor Mills and the Legislature made last year, along with prudent management of Departmental spending throughout the pandemic, and significant Federal support for Maine’s economy and for Maine people. As a result, Governor Mills was able to maintain critical services for Maine people throughout the pandemic.
Additionally, Moody’s and Standard & Poor’s credit rating agencies have cited Maine’s governance practices and its reserves in the Budget Stabilization Fund as grounds for reaffirming Maine’s Aa2 bond rating and for rating Maine’s debt as stable during the pandemic, even while downgrading ratings of other states.
Highlights of the budget include:
Students, Teachers, and Schools:
- Makes historic investments in public education: The budget fulfills the state’s commitment to Maine schools, municipalities, and teachers by funding 55 percent of K-12 public education costs as outlined in statute. This marks the first time Maine has met the 55 percent threshold since Maine voters passed a referendum in 2004 requiring the state to contribute 55 percent of funding for K-12 public schools.
- Supports school capital improvement projects: The budget also adds $45M to the School Revolving Renovation Fund so schools can afford to make critical health, safety and capital upgrades. The COVID-19 pandemic has exposed areas that need repair in schools all across the state. These funds will support these repair projects and other needs to protect the health and safety of Maine teachers, students and school support staff.
- Supports higher education: The budget invests in the University of Maine System, Maine Community College System, and Maine Maritime Academy. It provides a 3 percent adjustment in funding each year to avoid tuition increases at each of the institutions, making it easier for Mainers to access workforce training and higher education. In part as a result of the three percent increase, the University of Maine System was able to hold tuition flat for Maine students.
- Addresses student hunger: The budget makes School Breakfast and National School Lunch programs available to all Maine students at no cost. Research has indicated that many families experiencing food insecurity do not qualify for school meals under the current eligibility guidelines. Given the projected increase in students likely to qualify for school meals in the wake of the pandemic, this will ensure that no student goes to school hungry.
- Invests in Maine’s workforce training through Career and Technical Education (CTE): Maine has not updated equipment and necessary capital improvements since 1997. The budget will support these improvements at CTE schools across Maine so students have access to the technology and tools they need to train for today’s economy.
Property Tax Relief:
- Restores revenue sharing: The budget makes good on the State’s commitment to our city, towns, and municipalities by fully investing in revenue sharing by the end of the biennium. This influx in funds to local municipalities will help stabilize property taxes by shifting the cost of essential services off of property taxpayers. The budget raises municipal revenue sharing from 3.75 percent to 4.5 percent in Fiscal Year 2022 and 5 percent in Fiscal Year 2023.
- Expands Property Tax Fairness Credit to 83,000 Mainers: The budget improved the Property Tax Fairness Credit, providing a one-time boost in the maximum benefit from $750 to $1,000 for income-eligible families, and $1,200 to $1,500 for seniors. The budget permanently changes eligibility for the program to provide property tax relief or rent relief to 83,000 Mainers.
- Bolsters the Homestead Exemption Program: In the biennial budget passed by the Legislature in March, lawmakers expanded the Homestead Property Tax Exemption, allowing Mainers to take $25,000 off the value of their home and only pay property taxes on the remaining amount through the Homestead Exemption Program. Under the current program, municipalities are only reimbursed by the state at 70 percent of the cost. This limits the program’s impact on property tax relief. This budget increases the reimbursement by 3 percent each year until the state fully reimburses the municipalities to cover the full cost program.
Direct Care Workers, Seniors and Vulnerable Mainers:
- Funds preventative dental care: This budget will expand access to preventative dental care to an estimated 217,000 Mainers while saving the state in costly emergency room visits, cutting healthcare costs statewide.
- Supports senior living facilities: The budget includes critical funding to maintain emergency rate increases that support nursing facilities and the hardworking professionals who care for the residents. Maine nursing homes and senior living facilities have been hit hard by the COVID-19 pandemic. These funds will help the facilities continue to operate and care for our loved ones.
- Supports all direct care workers: The budget raises MaineCare wage rates for direct care workers to 125 percent of minimum wage. Direct care workers provide quality, compassionate and personalized care to the residents in their care. Paying direct care workers a fair, living wage recognizes the importance of their work and will help attract and retain quality professionals to this vital field.
- Supports Mainers with intellectual disabilities: The budget funds a rate increase to ensure that Mainers with intellectual disabilities can access adequate services.
- Invests in treating substance use disorder: The budget funds community treatment options and provides rate increases for recovery support services.
- Provides hazard bonuses for working Mainers: The budget provides a one-time $300 “hazard payment” to Mainers earning $75,000 or less as an individual; $150,000 or less for joint filers. This will support more than 500,000 Mainers who worked in unprecedented and hazardous circumstances during a one-in-a-lifetime pandemic.
- Preserves and protects Maine’s natural resources: The budget includes $40 million for the Land for Maine’s Future program to ramp up Maine’s land conservation efforts. In the wake of COVID-19, Maine’s conservation areas have experienced unprecedented foot traffic. These funds will play a vital role in supporting Maine’s outdoor recreation economy and Maine’s tourist economy. The budget also includes vital funds to clean up PFAS contamination.
- Grows Budget Stabilization Fund: The budget sets money aside for emergencies by adding a minimum of $60 million to the rainy day fund. This brings the total to $328.2 million — a historic high. For the past several years, the Mills Administration and lawmakers have made it a priority to responsibly set funds aside for emergency use should Maine experience an economic downturn. The budget continues this trend.
- Supports the work of the Permanent Commission: The budget provides critical funding for the Permanent Commission on the Status of Racial, Indigenous and Maine Tribal Populations to promote, implement and coordinate programs that create and improve opportunities and incorporate the goal of eliminating disparities for historically disadvantaged racial, indigenous and tribal populations in the State.
- Exempts the sale of menstrual products from sales tax: Maine will become the next state to abolish taxes on these sales to remove barriers to accessing necessary menstrual products.
The budget complements the Governor’s Maine Jobs & Recovery Plan, her Administration’s proposal for the use of American Rescue Plan Act funding.