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Maine Gov. Janet Mills unveils $10.3 billion two-year budget

Janet Mills
Robert F. Bukaty
/
AP
Gov. Janet Mills arrives her inauguration ceremony wearing L.L. Bean boots, Wednesday, Jan. 4, 2023, at the Civic Center in Augusta, Maine.

Democratic Gov. Janet Mills is proposing a $10.3 billion two-year budget that continues previous investments in public and higher education, as well as an array of housing and health care initiatives.

The governor's proposal is nearly $1 billion more than the current baseline budget of roughly $9.4 billion, a figure that accounts for legislative spending initiatives that kicked in after passage of the biennial budget in 2021. The spending increases in the governor’s current proposal are largely driven by the continuation of programs in the current budget and bolstered by prior revenue surpluses and an influx of federal funds directed to the state by way of spending bills enacted by the previous Congress.

The spending plan is expected to draw scrutiny from Republicans. While the party remains in the minority for the next two years, its votes will be needed if Mills and legislative Democrats pursue a bipartisan agreement that can be enacted before the current funding of state government ends July 1.

Shortly after Mills unveiled her proposal, Senate Republican leader Trey Stewart, of Presque Isle, and Rep. Billy Bob Faulkingham, of Winter Harbor, said the proposed spending increase were worrisome, as was the absence of an income tax cut in the governor's plan.

"Clearly if we've got over a billion dollars more than we had just two years ago when we went through this exercise, the people of the state of Maine are taxed too much," Stewart said.

Faulkingham added, "What we're concerned about is the fact that we have over a billion dollars in budget surplus that's getting spent without a tax cut. But we are looking forward to working on this bill with the Democrats and the governor and following through the appropriations (committee process)."

Democrats could enact the budget on a straight party-line vote, just as they did two years ago, but they would have to do so by April. So far, Democratic leaders have given no indication that they intend to do that and it’s possible that they’ll seek their own modifications to the spending plan in the coming months.

Mills in her press briefing Wednesday said the goal was to achieve a bipartisan agreement. Faulkingham and Stewart echoed that sentiment.

In a prepared statement, Mills cited the need to invest in education, housing and health programs.

“From education at every level, to stable housing, to our health care system, to our transportation system, this budget proposal aims to strengthen what Maine people rely on every day to succeed — all while not raising taxes, living within our means, and protecting us against the possibility of a recession,” Mills said. “Every budget I have offered has sought to give Maine people the tools and resources they need in a fiscally responsible manner, and this budget is no exception.”

Mills framed her new proposal as a responsible plan that doesn’t raise taxes, maintains the rainy day fund at its current record high of $900 million and is guided by revenue projections by the nonpartisan Revenue Forecasting Committee that anticipate $10.5 billion in revenue in the biennium corresponding with her spending plan and $11.6 billion projected in the following biennium ending in 2027.

The governor’s new two-year budget proposal includes several big-ticket education items, including:

  • Continuing to fund 55% of local education costs during the coming biennium: $101 million.
  • Continuing providing free meals to all public school kids: $58 million. 
  • Continuing free community college for students graduating from high school in 2024 and 2025: $15 million. The previous tuition initiative was aimed at students graduating during the pandemic. 
  • $41 million for state higher education institutions, including the University of Maine and Maine community college systems and the Maine Maritime Academy. 
  • $10 million to increase the Maine State Grant Program for higher education students from $2,500 to $3,000. 
  • $7.8 million to continue funding pay increases for child care workers previously enacted by the legislature.

It was not immediately clear from the administration’s budget documents whether the aforementioned initiatives reflect increases from the current budget or maintain existing funding levels.
The same caveat applies to the $550 million in various health initiatives Mills highlighted in her budget overview, including $237 million to support mental health and substance use disorder services. The latter initiative contains a mix of state and federal funds. The health spending also includes money for services to older Mainers and improving the state’s embattled child welfare system.

Housing and infrastructure spending includes $30 million for rental and housing assistance, as well as $400 million for the Maine Department of Transportation that’s designed to trigger $1 billion in matching funds made available to states through the federal Bipartisan Infrastructure Law enacted by the previous Congress.

Mills’ proposal, as well as an anticipated change to the current budget, includes a combined $17 million for the Maine Commission on Indigent Legal Services, which oversees the state system connecting low-income criminal defendants with private attorneys. The system is largely viewed as in a crisis as it confronts a lack of private attorneys willing to join its indigent defense roster. To that end, the governor’s proposal meets the MCILS request for a $13.2 million increase so that it can offer rostered attorneys a higher hourly rate. However, the governor’s proposal comes with a caveat: The hourly rate will be tiered based on the complexity of defense cases. Mills’ indigent defense initiative also includes $3.6 million to increase the number of public defenders from five to 15.

Democratic leaders were largely supportive of the governor's proposal.

"The governor’s proposal gives the Legislature a good place to start by building on the success we’ve achieved together from historic investments in education and universal school meals to restoring the revenue sharing program and delivering property tax relief," Democratic Senate President Troy Jackson said in a prepared statement.

Democratic House Speaker Rep. Rachel Talbot Ross added in a written statement, "House Democrats will remain steadfast in prioritizing investments in affordable housing, quality public education, accessible health care, safeguards for our most vulnerable, equitable access to justice, and an economy that works for both people and small businesses. This is the work that we were sent here to do, and we do so with a commitment to improve the lives of all Mainers.”

The proposal’s topline figure marks a $1.6 billion increase from the $8.7 billion baseline budget enacted two years ago — an increase certain to draw criticism from Republicans and aligned interest groups. The current baseline budget has increased by $700 million since then because of the subsequent passage or implementation of spending legislation that passed in the previous legislature. The current $9.4 billion baseline does not include the $473 million heating and housing measure enacted by the current legislature last week.