President Joe Biden's American Rescue Plan is sending billions of dollars in discretionary funding to Maine and other states. During a press conference on Tuesday at the former paper mill in Madison, Democratic Gov. Janet Mills released her proposal outlining how she wants to spend the state's share.
Mills' Maine Jobs and Recovery Plan spends more than $1 billion of that federal money, and All Things Considered host Jennifer Mitchell spoke with chief politics and government reporter Steve Mistler to explain some of the details.
This interview has been edited for clarity.
Mitchell: Let's start with some broad strokes here and tell how the governor was able to craft this proposal in such a short period of time. After all, the American Rescue Plan didn't pass Congress until mid-March, right?
Mistler: That's correct. But the governor had a lot of groundwork for this proposal completed well, before this money was coming. Late in 2019, her administration, along with a bunch of stakeholder groups, created a 10-year economic development plan. Now that plan was mostly viewed as aspirational, because it was confronted with the same problem that all ambitious proposals are in Maine — funding. Well, this $1 billion from the federal government solves a lot of those funding problems. The governor last year also created a stakeholder group during the pandemic, to come up with ideas about how to restart the Maine economy when the pandemic subsided. So this proposal unveiled Tuesday includes many elements from both of those plans.
So it sounds like this proposal had the benefit of some pre-pandemic planning, and also borrowed from this stakeholder group that was organized specifically because of the pandemic. So does that explain why it includes things like money for infrastructure projects, for example, as well as things that are clearly designed to help folks and businesses now, such as recovery loans and grants?
Precisely. The proposal is basically broken up into three parts, which the governor outlined during her presentation in Madison.
"We are presenting our best plan for the use of these funds to accomplish three important goals. One, economic recovery for our state in the near term. Two, economic growth for our state in the long term. And three, physical and human infrastructure in our state."— Gov. Janet Mills
So Jen, let me just take those one by one and provide a few highlights. The first part of her plan spends $260 million in what's described as immediate economic recovery. It includes $80 million in recovery grants that are similar to the grants that were provided to businesses last year. This is essentially more money toward that end, but it also directs $50 million to so-called heritage industries such as agriculture, forest products and seafood. The immediate recovery section of the plan also replenishes the state's unemployment trust fund, which took a pretty big hit at the peak of the pandemic, because there was an explosion in unemployment claims and that trust fund helps fund those claims. And this part of the plan also directs money to help small businesses with health care costs.
The second part spends about $300 million on what the governor describes as long-term economic growth. Now, it's helpful to think of this as an investment, in things like research and development for innovation, workforce initiatives to help companies find the workers that they need and also money to create a workforce for clean energy companies, whose need for skilled workers is also expanding.
And the third part of the plan is basically infrastructure spending. This is something that the governor and the Legislature would ordinarily ask voters to approve through state borrowing or bonds. I'm talking about things like broadband expansion, which is a big priority for Gov. Mills and the Legislature. Affordable housing is another one, and so is child care. And there's also money for traditional spending on infrastructure, such as roads and bridges.
So I noticed that the governor referred to this plan as a proposal. Does that mean that the Legislature is going to play some part in shaping what this spending of federal dollars is ultimately going to look like?
That's right. This is a proposal, which means the Legislature will get the final say on what this all looks like. Although I expect Gov. Mills will play a pretty significant role in shaping it nonetheless. Democrats control the House and the Senate, so they're going to be under some pressure to support the governor, who is after all up for reelection next year. Republicans want to have a say too. The question is, how quickly are lawmakers going to enact a spending package this big? We're getting close to the end of the legislative session and there's a lot of legislation still out there that's pretty significant, including a supplemental budget proposal that will be tacked on to the two-year spending plan that Democrats passed last month. Now, there's also some question of whether this big plan will be broken up into three parts, one addressing the immediate needs from the pandemic and another that might pass later on. But Gov. Mills made it pretty clear that she wants this done and done quickly.
"The purpose of this funding from the Congress' point of view and the president's point of view is to get funds into circulation, pick up the economy now. We want to see these investments happen as soon as possible."— Gov. Janet Mills
What's the reaction been so far to the plan?
Well, I noticed that there wasn't this outpouring of support from even Democrats in the Legislature. But that's probably because they have some alternative ideas of how this money should be spent and they're going to probably just do that kind of work between themselves and the governor's office. There wasn't any reaction at all from Republicans, but that's generally how it's been the past two years. The plan did have a lot of support from business groups like the Maine State Chamber of Commerce and the hospital association, and it was also applauded by environmental groups and conservation groups. There was also support from organized labor. So it's a pretty good start, but I suspect we have a bit more to go before we'll see a finished product here.
