Democratic Gov. Janet Mills today released her plan to divvy up the state's forecast $822 million budget surplus, which is driven by better-than-expected revenue projections and federal pandemic aid.
All Things Considered host Robbie Feinberg spoke with Maine Public's chief political correspondent, Steve Mistler, to break down the proposal and highlight a few details.
This interview has been edited for clarity.
Feinberg: Last week, the governor used her State of the State address to highlight some of her plans to spend this surplus. So is what she released today basically sketching in the details of her proposal?
Mistler: Yeah, that's exactly right. What came out today is an actual bill, which includes those details. And it will be up to the Legislature to take this proposal, hold a public hearing on it, and then get to work either adopting it as is, which is pretty rare, or tinkering with it. This proposal is basically a change to the state's current two-year budget. And that's why it's called a supplemental budget. And what the governor has done here is basically lay out a plan to deal with some of the immediate issues of the day, primarily inflation, and lay out some investments that might help with some problems that will linger after the inflation issue subsides.
To your point about details, I think a lot of people want to know about a key initiative that Gov. Mills talked about, this proposal to send about half of the surplus back to Mainers by way of $500 checks sent straight to Maine residents. So what can you tell us about who will be eligible for these payments?
So in December, about 500,000 Mainers received these direct payments of about $285. And that was a different initiative. And to qualify for those, you had to demonstrate that you worked during the pandemic. This new proposal is different. It aims to reach about 800,000 Mainers, and the key qualifying metric here is income level. And it's also designed to bring in retirees who did not benefit from the $285 direct payment last year, which again, was really geared to the workforce. So as proposed, the governor's bill says you'll qualify for these payments if your federal adjusted income last year is less than $75,000 if you're a single tax filer, less than $112,500 if filing as a head of household, or less than $150,000 if you're filing jointly. Dependents are not eligible for these payments under the governor's proposal.
If I recall correctly, this proposal by the governor is really aimed at dealing with inflation pressure on Maine residents, right?
Yeah, that's right. You can kind of think of this entire bill as the governor's response to the economic situation in the state. There are some positive things to say about the economy. Unemployment has returned to pre-pandemic levels, and so has the state's gross domestic product. But a lot of Mainers, and certainly a lot of Americans, aren't really feeling that great about their situation. And for good reason. Energy and gas prices are high, and so is the cost of goods like groceries. This proposal was designed to provide a little bit of relief to pay for those everyday expenses that have suddenly become a lot more pricey.
As you mentioned, the direct checks, they're a main feature of this spending plan. But Gov. Mills also mentioned last week that her proposal would have some other initiatives. So what jumps out to you there?
The governor has proposed spending $20 million to provide free tuition to Maine community college students who graduated high school in 2020 and 2021, as well as high school graduates who will graduate this year and next year. To qualify, students must enroll full time at a Maine community college and qualify for in-state tuition. The governor has framed this proposal as one designed to basically help with a workforce shortage. And it's expected to benefit about 8,000 students across the state. While we're talking about college students, the governor is also calling for $8 million to go to the university system to preempt any tuition hikes for in-state students.
I remember the governor talking about education quite a bit during her speech. But does her spending bill lay out any other proposals?
It does. Last year the Legislature approved a program that provides free school lunches for public school kids, not just the ones who qualify for free and reduced lunch, but everyone. Now her proposal makes another investment and continuing that program. And Gov. Mills is also proposing $42 million to revamp the Educational Opportunity Tax Credit so that it helps college students pay down student loans. And she also creates what's called the Education Stabilization Fund, which is aimed at making sure that the state continues to fund local education costs at 55%. If you recall, that has been a promise that the state has made for a number of years, yet has not met until last year when the Legislature passed its two-year budget. But this new initiative is designed to increase the chances that the state will continue to meet that obligation going forward.
I know that there is a lot more in this budget bill. But I feel like we would be remiss if we didn't address some of the politics that could affect its chances in the Legislature. So what can you tell us about that?
Yeah, the politics will certainly dominate a lot of the discussion. After all, this is an election year, and the governor is expected to face a pretty stiff challenge against former Republican Gov. Paul LePage. LePage is campaigning on eliminating the income tax, which is a huge undertaking that he talked a lot about during his two terms, and yet didn't achieve, but he's still banging the drum and saying that Mills' proposal is basically a campaign-year gimmick, and won't provide the same ongoing relief that his income tax elimination would. And we're already seeing some posturing among Republican lawmakers who are basically trying to align themselves with LePage position, the problem they face is recent history and the fact that the public might be more inclined to support direct payments, as opposed to something that's maybe more aspirational, and quite difficult to pull off in the Legislature. The Republican objections won't matter that much if Democrats, who control the Legislature, simply decide to pass the governor's proposal or some iteration of it without any Republican votes. They could certainly do that, it'll just have an effect on when the budget change goes into effect. If they pass it with a two-thirds majority, which would include Republican votes, it'll go into effect immediately. But if they decide to go at it alone, it will take 90 days after the Legislature adjourns, which is expected to happen in late April.
