The 130th Maine Legislature is currently scheduled to adjourn its second session on April 20, giving legislators a little more than two weeks to negotiate and pass a supplemental budget in addition to finally dispensing with the remaining work before them.
In February, Gov. Janet Mills released a supplemental budget proposal with plans for spending all but $20 million of the state’s projected $1.2 billion General Fund surplus. The governor left the decisions for how to spend the $20 million in unallocated funds up to legislators in the Democratic and Republican caucuses.
On April 1, Republicans released their priorities for the supplemental budget, which include building on proposed stimulus checks and additional funding for healthcare and the environment.
Republicans would build on the proposed $850 direct relief checks for Maine residents who filed income tax returns in 2021, but unlike Mills’ proposal, which would send direct relief checks through the mail, Republicans want money to be electronically deposited when possible.
Republicans are also proposing to lift the eligibility cap for the relief check on individuals whose adjusted gross income is over $150,000 per year. Under Mills’ proposal, couples whose joint annual income is greater than $150,000 are not eligible to receive relief checks. Republicans would lift this cap, resulting in relief being sent to an estimated additional 120,000 people.
Mills’ proposed relief checks are expected to be sent to approximately 800,000 residents. Republicans believe approximately 920,000 Mainers would qualify to receive checks under their plan.
Republicans are also proposing to use the unallocated surplus to establish an annual sales tax holiday weekend, which would occur in early October. Their proposal places a $2,500 cap on any single item and would include exceptions for some purchases, such as tobacco and motorboats.
The Republican proposal also includes several initiatives focused on providing relief for healthcare workers and facilities, including a cost of living adjustment to support increasing wages to at least 125% of the minimum wage.
Other proposals include one-time supplemental payments for nursing homes, hospitals, and long-term care facilities, as well as funding for “add-on” payments to support the increased cost of staffing, and payments to help adjust for inflation in fiscal years 2021-2022 and 2022–2023.
Their proposal also includes support for language in Mills’ proposed change package to the supplemental budget, which directs the Department of Health and Human Services to make supplemental payments to Maine Veterans’ Homes of just over $1 million in fiscal year 2021-2022 and nearly $2.5 million 2022-2023 to offset budget shortfalls. As a condition of receiving the payments, Maine Veterans’ Homes is required to keep open homes in Caribou and Machias.
The Appropriations and Financial Affairs Committee (AFA) has already voted unanimously to accept this part of the governor’s budget. Additionally, the legislature passed and Mills signed into law on March 31 a bill that accomplishes this. The AFA committee voted to exempt the bill from the special appropriations table before its final passage, meaning it went into effect as soon as it was signed.
Republicans also support adding 600 additional slots for a program that provides in-home and community support for the elderly “in an effort to help keep older Maine residents in their homes.”
Other priorities include support for agricultural land contaminated by polyfluoroalkyl and perfluoroalkyl (PFAS) in the form of increased laboratory testing capacity and staffing, as well as support for the Advisory Committee on the Fund to Address PFAS Contamination, an initiative in Mills’ change package.
Republicans also support eliminating the state’s 100-megawatt cap on hydroelectric generators.
The AFA committee has already unanimously voted to accept a number of line items from Mills’ original supplemental budget proposal and from the change package.
Democrats have indicated that their priorities remain in helping Mainers with the “sky-high” costs of energy, property taxes and healthcare, “bolstering access to quality, affordable child care,” investing in long-term care, supporting providers, and investing in career and technical education through targeted degree programs and workforce training to fill in gaps.
Interest in the sliver of unclaimed revenues left over from Governor Janet Mills’ budget proposal is intensifying, as some Democrats question the need for the $850 relief checks that form the cornerstone of her spending plan and advocates press for a range of policy priorities.
Mills has left only $20 million unclaimed out of a $1.2 billion revenue surplus projected through next summer. With 237 bills the Legislature has passed but not yet funded competing for a slice of revenue, the stage is set for some high-stakes jockeying just weeks before the session is supposed to end on April 20.
Mills has held firm on the need for the relief checks, which will use up over half of the roughly $1.2 billion revenue surplus. That commitment has put her at odds with some members of her own party. Meanwhile, legislative Republicans say they won’t support any package that doesn’t have the relief payments, but are signaling they could be flexible on nearly any of their other recently released budget priorities.
It is notable how much of a financial turnaround the state has experienced, which has fundamentally transformed the debate in Augusta from how to deal with scarcity to how to spend an excess of available funds.
Back in December 2020, when the pandemic was dampening the economy, the Department of Administrative and Financial Services projected a $160 million revenue shortfall for the two-year state budget period that ends June 30, 2023. The report noted efforts by the governor to reduce spending brought the deficit at the time down from a $707 million shortfall projected in March 2020.
But states have since received support from huge amounts of federal spending and a growing economy. The federal spending includes $1 billion Maine received from the 2020 CARES Act, followed by $1.5 billion from the 2021 American Rescue Plan Act.
Revenues have since rebounded and the state’s economy grew by 5.2 percent last year.
The National Conference of State Legislatures reported last month that every state is likely to meet its revenue forecasts this year. Still, Maine’s revenue forecasting committee warned in March that the good economic times may not last as inflation and rising fuel prices could constrict spending.
In addition to the checks, Mills is proposing $100 million to pay for transportation infrastructure projects, $60 million to help farmers affected by so-called forever chemicals, $20 million to improve the state’s behavioral health system, $22 million to create an emergency housing relief fund and several other items.
The $682 million dedicated to the relief checks has a group of Democrats questioning the wisdom of spending so much on those when housing shortages, mental health treatment needs and substance use are persistent problems in the state.
Mills’ spokesperson Lindsay Crete said the governor’s budget package is meant to provide immediate financial aid while balancing long-term needs and accounting for changing economic headwinds. She said the governor still welcomes input on the budget and wants to reach two-thirds support in the Legislature.
Whether she will require that level of support to sign the bill remains to be seen. After Republicans withheld support on a short-term budget last year until concessions were made, Democrats pushed through a two-year budget without their support. They did the same with a spending plan for the state’s share of federal aid.
Advocates are hoping there is still time to make changes
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