Mills proposes flat budget that balances no tax hike with safety nets
Gov. Janet Mills' proposed state budget for the next two fiscal years looks to balance the line between not raising taxes but also making sure residents, businesses and the state itself have a safety net after pandemic-racked 2020.
Mills’ $8.394 billion budget proposal, released Friday afternoon, focuses on attacking the COVID-19 pandemic; health care services, including for mental health and opioid dependence; shoring up hard-hit schools; maintaining state jobs and services; and stepping up broadband access.
The supplemental and biennial budgets together add nearly $61 million to the state’s “rainy day fund,” which would rise to $320 million. The stability of the fund is key to the state's bond rating.
“At a time when Maine people are hurting, when small businesses are struggling to keep their doors open, when the ranks of the unemployed have swelled and when we are fighting a deadly virus all around us, we are proposing a balanced budget that tightens our belt, that protects support for children’s education, that saves, and that reinforces public health, child welfare and public safety measures of great concern to Maine families,” Mills said Friday. “We are focused on keeping Maine people healthy, saving lives, educating our kids, and getting people back to work.”
The new biennial budget is about $57 million more than the biennial budget that ends June 30, but much of that is in required increases, as well as necessary ones to provide a safety net for Maine residents and business, Mills' office said. Both budgets must be approved by the state Legislature.
Revenue picture a little brighter
The state budget is required by Maine's constitution to be balanced, and the $7.6 billion in federal pandemic relief money has helped reduce the revenue shortfall so the hit isn't too bad, said Mills and Kirsten Figueroa, commissioner of the state Department of Administration and Financial Services.
The federal money, coupled with austerity measures adopted by the state as the pandemic hit "kept our ship steady amid the stormy seas of the pandemic," Figueroa said Friday.
In July, the Revenue Forecasting Committee projected a $527.8 million shortfall for the fiscal year ending June 30. Last month, largely because of the $7.6 billion in federal pandemic relief money to the state, that forecast was down to $255 million. The committee's prediction of $888.2 million for the 2022 and 2023 fiscal years has also been reduced to $395.8 million.
What's new in the budgets
The supplemental budget adds:
- $5 million for Maine CDC for COVID-19 testing, vaccines, and support services for people who need to stay in isolation and quarantine (supplemental);
- $1.8 million to expand broadband into areas with inadequate service (supplemental).
The biennial budget adds:
- $6 million to fund Section 29 services for adults with developmental disabilities in their homes and communities, adding 30 more slots per month;
- $45 million for MaineCare rate increases for nursing facilities, residential facilities for children and older Mainers, services for adults with intellectual and developmental disabilities, and other providers as rates are renewed, per state and federal requirements;
- $25.5 million to the Medicaid Stabilization Fund to budget responsibly for MaineCare;
- $7.5 million for mental health and substance use disorder services, including funds for community mental health and $2 million for the OPTIONS (Overdose Prevention Through Intensive Outreach, Naloxone and Safety) Initiative to dispatch mobile response teams in every Maine county to communities with high rates of drug overdoses;
- $45 million for K-12 public education, "making progress" toward a minimum teacher salary of $40,000 and allowing local districts to manage in-person, remote and hybrid learning options during the pandemic.
Both budgets add a Highway Fund allocation that uses a $21.8 million in balance generated in FY2020.
The Legislature intends to take up the proposals immediately.
“I know there is no more important job than making sure we appropriate taxpayers’ hard-earned money in a prudent, respectful, bipartisan way, said Sen. Cathy Breen, D-District 25, Senate chair of the Appropriations and Financial Affairs Committee.
She vowed a "transparent and open" process that will "give every legislator and every Mainer the opportunity to weigh in."
“This year will be a challenging one, but I am ready to get to work with the governor and my colleagues on both sides of the aisle to produce a budget that will pay our bills, invest in our future, protect our natural resources, and safeguard essential services like public education and health care," Breen said.
Teresa Pierce, D-Falmouth, House chair of the committee, said the proposal is "thoughtful" and provides "an excellent starting point for our work ahead."
“Our committee will dig into the details, listen to public testimony and spend many hours focusing on how we can improve the lives of Maine families and create more opportunities to bolster our economy," Pierce said. "I look forward to the conversations and the hard work ahead of us.”
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