Mills budget establishes paid family and medical leave program

Courtesy / Mills Administration Gov. Janet Mills signed a $445 million balanced budget that will take effect 90 days after the Legislature adjourns.

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By Laurie Schreiber

Gov. Janet Mills signed into law a budget Tuesday that creates a paid family and medical leave program and cuts taxes for Maine retirees.

The paid family and medical leave program was included in order to provide more flexibility for businesses, and provides $25 million in one-time start-up funding, according to a news release. Maine will be the 13th state to establish a program and benefits will be available as of May 1, 2026.

While the paid-leave plan has its detractors and still leaves questions about how small businesses will adapt to the new regulation, Mills said the program was among several that would benefit Maine's residents.

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

“Today Maine made historic progress to strengthen working families, joining 13 states and the District of Columbia to ensure paid family and medical leave,” said U.S. Rep. Chellie Pingree, D-1st District. “Now, we must secure paid family leave nationwide and lower the astronomical price of child care.”

AARP Maine called the program a “historic win for Maine’s 166,000 family caregivers.” “This new law will support family caregivers who work to better balance their job and family responsibilities, reducing their stress and allowing them to better care for their loved ones,” said AARP Maine State Director Noël Bonam.

Many of Maine’s caregivers also work full- or part-time jobs.

Other highlights

Additionally, the budget:

Establishes the Dirigo Business Incentive Program, a replacement for the Pine Tree Development Zone program, that provides tax credits to businesses to train workers and invest in capital.
Creates a Housing First Program, designed to address the needs of people experiencing chronic homelessness.
Allots $70 million to build more affordable housing in Maine for workers and their families through the Rural Affordable Rental Housing Program and the Low-Income Housing Tax Credit program.
Adds $12 million in one-time funding to the state’s Emergency Housing Relief Fund created in 2022 to support emergency housing needs in communities across Maine. The money will be used to extend housing supports to individuals and families in transitional housing and expand support for shelters and other efforts to help individuals and families experiencing homelessness. The funding builds on the $43 million provided by the state over the past year to address homelessness.
Creates a pilot program that provides access to emergency financial assistance for students at risk of homelessness.
Makes the $300 dependent exemption tax credit refundable for tax years beginning on or before Jan. 1, 2024, and indexes the credit to inflation beginning on Jan. 1, 2025.
Increases eligibility for the child care affordability program from 85% to 125% of the state’s median income, effective January 2024.
Doubles salary stipends for child care workers from $200 to $400 on average.
Provides $15 million to extend free community college for students from high school graduating classes of 2024 and 2025 who enroll in a Maine community college full-time.
Beginning in 2024, increases the annual income tax pension deduction from $35,000 by tying Maine’s pension deduction amount to the maximum annual Social Security benefit.
Allots $19.8 million for a one-time 3% cost-of-living adjustment for retired state employees, providing a maximum benefit of $726 and an average benefit of $527 to approximately 37,600 state-sponsored plan retirees.
Provides $31 million in one-time funding to establish the Maine Emergency Medical Services Sustainability and Resiliency Grant Program to provide grants to emergency medical services.
Provides $2.6 million to create six trial court judgeships, along with nearly 40 new positions including deputy marshals and clerks.
Provides $4 million in one-time funding to be distributed through the Civil Legal Defense Fund.

‘Terrible blueprint’

The $445 million budget, which builds on the current services budget, results in a $10.3 billion biennial budget. As required by the Maine Constitution, the budget is balanced. It will take effect 90 days after the Legislature adjourns.

But third-term Maine Rep. Joshua Morris, R-Turner, decried the budget as a “scheme” that “raises taxes on hardworking Mainers and increases spending above the already-record levels Mainers have been subjected to since Mills assumed office.”

He added, “It pulls the rug out from under our seniors and is a terrible blueprint for the future of Maine.”