Mills Pushes For More Flexibility On How Federal Funds Are Used

May 21, 2020

Maine Gov. Janet Mills says that she has taken steps to curtail state expenditures through June in order to get through the remainder of the budget year. But the economic effects of the pandemic will also require plans to deal with hundreds of millions of dollars in lost state revenues in the year to come.

Credit Rebecca Conley / Maine Public

Mills says she has been working through the National Governors Association and the state's Congressional delegation to urge the passage of additional federal aid to states and municipalities, and for more flexibility in how federal funds appropriated under the CARES act may be used. She says that without additional assistance from Washington, state and local governments will be forced to lay off workers and cut services.

“It’s going to mean a lot to people,” she says. “It’s going to mean a lot to people with jobs in the education system, in the higher eds, in towns and cities and counties and in the private sector, which we are already seeing.”

In a letter to the state’s Congressional delegation, Mills cites the public and private sector impacts caused by steps to curb the spread of the coronavirus. By one estimate, the projected losses add up to over $3 billion. Mills says the state has the cash to get through the final five weeks of the budget year because of cost-cutting steps she ordered a few months ago.

“Keeping a close eye on expenditures and revenues, and paring back on hiring and contracts and expenditures of all sorts.”

But Mills says the current CARES act provisions must be changed to give the states more flexibility in how they spend the money they have already received. Maine’s share is $1.25 billion, but there are limits on how it can be used and on the window for using it.

“The impact on the state’s budget and other budgets, including local budgets, is going to be well beyond December of this year,” she says. “Right now the CARES act relief fund says we have this money, we can only spend it only for COVID-19 related expenses, and we have tried to document as many of those as possible, but you can also only spend it from March through December of this year.”

Mills says the same kind of flexibility must also be built in to any additional aid proposals. And, depending on what is passed, she says it may require a special session of the legislature to allocate any new money.

“Every one of the Governors want some provision like that to pass so that we know what we are doing with it. At that point, yes, it may be perfectly appropriate to talk with the Appropriations Committee, talk with legislators, about what should happen with that money.”

Some Republican leaders say those discussions should already be happening. Maine state Sen. Jeff Timberlake of Turner says the Mills administration has not shared its plans, and should be working with both sides of the aisle on solutions.

“The Appropriations Committee may be brought back in to have some discussions,” says Timberlake. “We look forward to working with anybody in a bipartisan way, anybody we can to move the state forward.”

The U.S. House, meanwhile, has passed one bill that would provide nearly $1 trillion in aid to states and municipalities and the Senate is considering several bipartisan measures that would provide nearly $500 billion.

This story is part of our series “Deep Dive: Coronavirus.” For more in the series, visit mainepublic.org/coronavirus.

Originally published 4:29 p.m. May 20, 2020