On Friday, January 8, Governor Mills submitted her new two-year biennial state budget proposal to the Legislature for fiscal years 2022-2023 and a supplemental budget proposal for fiscal year 2021.
The proposed budget keeps state spending in check without raising taxes or cutting programs and services.
Maine government finances were ahead of what was anticipated going into the COVID-19 pandemic last March. This positioned the state well for the revenue losses triggered by restrictions on business ordered by the Governor to slow the spread of the virus. In addition, the revenue losses were not as severe as expected, and early financial support from Congress for state government and individuals helped alleviate the impact of the virus on Maine’s government finances.
Maine’s current two-year, $8 billion budget will expire at the end of the fiscal year on June 30. The Legislature must approve a new budget before then to avoid a state government shutdown.
The Legislature’s budget-writing Appropriations and Financial Affairs Committee has been meeting almost monthly since March and has been monitoring the financial ups and downs caused by COVID-19.
In March, Mills and the Legislature worked quickly to pass a supplemental state budget that reduced state spending while setting aside $184 million in the state’s budget stabilization fund. That money has yet to be used, and the next budget proposal from the Governor also leaves this money in the “rainy day” fund intact.
Initial revenue forecasts showed state government could see a revenue shortfall of more than $1.5 billion over the next three fiscal years, including the current fiscal year. But those predictions have proved to be high by about 50 percent. The latest forecast suggests revenue losses on the order of $255 million for the current fiscal year – about half the original projection of $528 million. Revenue losses for the following two fiscal years, 2022 and 2023, were also downgraded sharply.
The Governor’s proposals include:
- $3 million to the Maine Center for Disease Control and Prevention (Maine CDC) to fund the Health and Environmental Testing Lab, the Health Inspection Program, the Maine Immunization Program, and the Public Health Emergency Preparedness Program (biennial);
- $5 million for Maine CDC for COVID-19 testing, vaccines, and support services for people who need to stay in isolation and quarantine (supplemental);
- To further fulfill the State’s commitment to vulnerable Maine people, $6 million to fund Section 29 services for adults with developmental disabilities in their homes and communities, adding 30 more slots per month (biennial); and $45 million for MaineCare rate increases for nursing facilities, residential facilities for children and older Mainers, services for adults with intellectual and developmental disabilities, and other providers as rates are renewed, per state and federal requirements (biennial);
- $7.5 million for mental health and substance use disorder services, including funds for community mental health and $2 million for the OPTIONS (Overdose Prevention Through Intensive Outreach, Naloxone and Safety) Initiative to dispatch mobile response teams in every Maine county to communities with high rates of drug overdoses (biennial);
- $45 million for K-12 public education, making progress toward a minimum teacher salary of $40,000 and allowing local districts to manage in-person, remote, and hybrid learning options during the pandemic. If approved, the increase in the State’s commitment to GPA from 51.78 to 51.83 percent will be the highest level of state funding for education ever (biennial); and
- $1.8 million to facilitate the expansion of broadband into areas with inadequate service (supplemental).
The combined budgets add $61 million to the Budget Stabilization Fund, otherwise known as the Rainy Day Fund, across the three Fiscal Years to help the State weather the pandemic and as a hedge against future fiscal crises. If approved, these budgets would increase the Budget Stabilization Fund to more than $320 million.
The Governor also proposes adding $25.5 million to the Medicaid Stabilization Fund to budget for MaineCare.
The Governor has also submitted to the Legislature proposals for Highway Fund budgets, including a supplemental proposal for Fiscal Year 2021 and a biennial proposal for Fiscal Years 2022-2023. The supplemental proposal is balanced and utilizes $21.8 million in balance forward generated in Fiscal Year 2020. The biennial proposal, also balanced, comes in at $676 million, and when combined with anticipated federal funds and bonding, maintains essential levels of service.
The Governor’s complete proposals are available on the Bureau of the Budget website. The Governor’s letter to the Legislature regarding the budget submission is here (PDF).