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Gov. Mills signs Maine budget that creates a new paid family and medical leave program

Gov. Janet Mills signed a $10.3 billion state budget into law July 11, 2023, at the State House in Augusta, Maine.
Billy Kobin
Gov. Janet Mills signed a $10.3 billion state budget into law July 11, 2023, at the State House in Augusta, Maine.

Maine will become the 13th state to require many employers to offer paid family and medical leave to workers following Gov. Janet Mills’ approval of a budget containing start-up money for the new law.

Starting in the spring of 2026, many workers in Maine will be able to take up to 12 weeks of paid leave in a year to care for a sick family member or to bond with a newborn, an adopted child or a foster child. Those benefits will be financed through a wage tax of up to 1% that will be evenly split between workers and employers. But in order to get the program started, lawmakers had to set aside $25 million in the budget that passed the House and Senate largely along party lines last week.

Speaking to reporters, Mills said the new paid family and medical leave program is part of the "transformative investments" that are contained in the spending plan.

"When that measure takes effect a few years from now, it will make it easier for people to balance work with life's unexpected challenges, like caring for a sick child or an aging parent,” Mills said. “This measure, as amended, now accommodates potential hardships for employers and seasonal employment and employers who already have a significant paid leave program.”

Paid family and medical leave has become a major focus for Democratic and progressive groups nationwide in recent years. There is little optimism that a federal program can emerge from a politically divided Congress because of opposition from many Republicans and some business groups. So progressive groups have, instead, focused on statehouses – and with considerable success.

Maine will be the last state in New England to adopt paid family and medical leave, although the programs vary widely. In New Hampshire, for instance, employer participation is voluntary. Maine's policy, meanwhile, will exempt businesses with 15 or fewer employees from having to contribute to the fund. And Rep. Kristen Cloutier, a Lewiston Democrat who was a lead sponsor of the bill alongside Democratic Sen. Mattie Daughtry of Brunswick, said that cap and other hardship exemptions were attempts to respond to businesses' concerns.

"You know I think any implementation of a program this size is going to be change for folks,” Cloutier said Tuesday afternoon. “And there is going to be a period of time when folks are going to need to ramp up and get used to that. We hope that this two-year ramp-up period will help with that in terms of building up the trust so that people can access the benefits in 2026."

Overall, Cloutier said Maine has a growing population of the “sandwich generation” who find themselves taking care of their own children as well as their parents at the same time.

In a statement released Tuesday afternoon, White House Press Secretary Karine Jean-Pierre praised Maine for moving to become the 13th state plus the District of Columbia to enact a paid family and medical leave law.

“Paid family and medical leave improves the lives of working families and strengthens our workforce and economy,” Jean-Pierre said. “The Biden-Harris Administration has worked to make the Federal government a model by supporting Federal employees in accessing the leave they need and continues to call for a national, comprehensive paid family and medical leave program. We applaud states like Maine that are making progress on this critical issue.”

Paid family and medical leave was one small part of a secondary budget bill signed by Mills. When combined with a larger budget passed by the Legislature and signed by Mills last year, Maine state government will spend a record $10.3 billion over the next two years.

Mills said that budget makes substantial additional investments in housing programs, child care and a new paid family and medical leave program.

The budget contains $70 million to encourage the development of affordable housing as well as $12 million for emergency shelters and transitional housing for people facing homelessness. The budget also doubles the wage stipend paid by the state for child care workers, increasing it to $400 a month. And it makes more families eligible for financial assistance for child care.

“From establishing a paid family and medical leave program, to strengthening education, housing, child care, workforce and delivering tax relief for seniors, this budget makes transformative investments in Maine people,” Mills said.

The budget bill passed the Legislature largely along partisan lines last week. While Republicans on the Appropriations and Financial Affairs Committee negotiated the final package, the vast majority of GOP lawmakers in both chambers ended up voting against the budget after numerous Republicans said it spent too much on other programs without returning enough to Maine taxpayers.

Republicans were able to negotiate a $5,000 increase in the tax exemption on pension income, lifting it from $30,000 to $35,000. But they had been pushing to return at least $200 million to Maine taxpayers given the state’s large surplus.

Because this latest budget bill failed to pass with two-thirds support in both chambers, it will not take effect immediately. Instead, spending authorized in this smaller budget bill will likely become available in the fall.

Rep. Sawin Millett, a Waterford Republican who serve on the Appropriations and Financial Affairs Committee, was among the handful of Republicans who supported the bill. He said that he believes some of the changes made in the spending plan – such as the pension changes and conforming Maine’s tax code with federal law – as well as significant changes to highway funding in a separate transportation budget bill would benefit the economy over the long term. But he said many of his colleagues were concerned about the impact of paid family and medical leave and changes to a property tax reduction program for older Maine residents.

“There were a lot of other little pieces but in the overall I think my caucus was saying this spends too much money, it grows government,” said Millett. “And they really weren’t interested in my argument that downstream it may help to grow the Maine economy.”