Democratic Gov. Janet Mills will propose saving nearly 40% of the state’s projected $256 million revenue surplus for the next two-year budget while boosting funding this year for public education, housing and child welfare services.
The governor outlined her upcoming change to the state’s two-year budget in a letter to the Legislature. The letter is the first part of her bifurcated State of the State address. The second half will be delivered via the traditional speech to a joint convention of the Legislature at 7 p.m. and focus exclusively on Maine’s worst mass shooting in history and the recent extreme weather events that have ravaged the state in recent months.
Her letter to the Legislature focuses almost entirely on her upcoming change to the two-year budget amid a revenue surplus that’s slightly higher than originally projected, but that the governor warns will be followed by a plateau. For that reason, she says lawmakers should be careful about how they craft the next spending proposal.
“That sounds like a lot of money, but, like Maine families, we have to look to the future to know what our revenues will be and to plan for the bills that are due in the months and years ahead,” she wrote. “That means, when I consider our financial outlook, I must not only look at the next few months but at the next few years.”
The governor noted that several other states are experiencing budget shortfalls. According to a recent study by Pew, roughly half of Americans live in states that report short-term budget gaps or long-term deficits.
“I recognize there are many needs across the state, and I know, in the past, we have been able to say yes to a lot of things. However, this year is, and must be, different,” she wrote. “If we do not budget responsibly now, the Legislature will be forced to make painful cuts in the future – just like other states are having to do now.”
While governors propose budgets and changes to them, the legislature must ratify the spending plans and lawmakers often craft changes. Resolving differences between the legislative and executive branch is done through negotiations.
The total amount of the governor’s supplemental budget proposal was not included in her release, but she highlighted three specific areas of focus.
To address the housing crisis, Mills will propose $16 million for the Emergency Housing Relief Fund so that various shelters and transitional housing programs can stay open. She’s also proposing $10 million for the Affordable Homeownership Program to bolster new home construction.
The spending plan will also make changes to the state’s embattled child welfare program, which has come under scrutiny from the Legislature’s Government Oversight Committee. Mills is seeking to add trainers and legal aides to ease the workload of depleted caseworker teams. She’s also proposing a review of caseworker compensation to make sure Maine’s wages are competitive and not hindering recruitment.
Mills also endorsed a bill from Sen. Lisa Keim of Dixfield, who is the assistant Republican leader in the Senate, to create a pilot project to recruit and retain case aides within the Department of Health and Human Services. Case aides perform many of the administrative and support services for caseworkers as well as provide visitation supervision.
Keim said she was pleased that Mills is backing her proposal, adding that finding ways to fill all of the vacant case aide positions “will be a game-changer for our caseworkers that we currently have if we give them this support.”
“I am happy to see it in there and I think it will fast-track the bill, which was my goal all along,” said Keim, who serves on the Government Oversight Committee that has been investigating the state’s child welfare programs.
The governor is looking to boost medication treatment for opioid addiction in the jail system, while also expanding access to the overdose reversal drug Naloxone.
The governor is also proposing to increase public education funding by $22.6 million to ensure that the state continues to fund 55% of local education costs.
While Mills attempted to warn lawmakers that the state’s budget outlook may change, she also touted her administration’s economic progress, including 9.2% growth in gross domestic product since 2019.
“Small businesses are expanding their operations; people are moving here to work and raise their families; and graduates are staying in Maine to pursue rewarding, life-long careers — all encouraging signs that are reflected in recent data about our economy,” she said.
House Republican Minority Leader Rep. Billy Bob Faulkingham of Winter Harbor said early Tuesday afternoon that he had not had time yet to dive into the proposals in the governor’s letter. But Faulkingham criticized the Mills’ administration’s handing of the influx of asylum seekers arriving in Maine, saying that the state is helping to provide free housing to those recent arrivals but is not doing enough to help native Mainers who are homeless or struggling to find affordable housing.
“I’m not confident in what the governor’s plans are because it’s been a really bad example set so far,” Faulkingham said.
Asked about Mills’ request that the Legislature not spend $100 million of the surplus, Faulkingham said Republicans want to see money given back to Maine residents in the form of tax relief. But he also said there is strong support for providing emergency relief for homeowners, businesses and working waterfronts that were affected by the three severe windstorms and flooding events that have struck Maine since late-December.
“We don’t want to see any expansion of government,” Faulkingham said. “We’d like to see obviously some tax reform. But there is a lot of emergency relief ... there are a lot of people that have been devastated by the storms that have happened.”
At least one progressive group, meanwhile, is already pushing back against the governor’s proposal to set aside $100 million from the projected surplus.
Garrett Martin, president and CEO of the Maine Center for Economic Policy, said that “now is not the time to forgo potentially transformational investments in Maine people and communities.”
“Legislators have the opportunity to build upon this framework and use this money to make people’s lives better now and provide tools to weather future storms,” Martin said in a statement. “This money could be used to fund bills currently being considered by the legislature that help child care providers stay open, provide critical relief for renters struggling to stay housed, build housing for people who need it today, and make sure our educators are paid a fair, living wage.”
That tension is likely to play out most acutely among the Democrats who control both chambers of the Legislature and, therefore, hold the majority of seats on the budget-writing Appropriations and Financial Affairs Committee.
Rep. Maureen Terry of Gorham, who serves as the House majority leader, said “we are always thinking responsibly when we are spending money” and that many of the new initiatives passed in recent years have involved one-time expenditures that don’t require future funding. Terry said lawmakers will “continue to be smart with our wallets” but there are also ongoing needs that lawmakers will have to consider.
“Asking us to be cautious is certainly a reasonable request, but we have to see what it is in front of us first,” Terry said.
