Economic Recovery Committee urges Gov. Mills to spend $1.1 billion to revive Maine’s economy


Last week, Governor Janet Mills’ Economic Recovery Committee released recommendations urging the administration to spend $1.1 billion to support and stabilize Maine’s economy, more than what the state can afford through remaining Coronavirus Aid and Relief Economic Security (CARES) Act funding alone. 

The 45-member committee, headed by Thomas College president Laurie Lachance and Tilson CEO Josh Broder, organize their recommendations into three categories: supporting Maine people, stabilizing Maine employers and investing in Maine infrastructure. 

Notable expenses include $300 million to PreK-12 schools and $45 million to childcare programs. The state has already directed $165 million and $8.4 million in CARES act funding to these areas respectively. Missing from the report is a recommendation for the state to pass tax conformity consistent with recent federal changes that would omit Paycheck Protection Program loans from state taxes.

The committee also suggests that $350 million––the largest recommended expenditure in the report––be allocated to Maine employers through an Economic Relief Grant Program and Nonprofit Relief Fund. 

Spending is also recommended for public health, higher education, housing, aid for immigrant workers, innovation, workforce development, and broadband planning and buildout. 

While the report spells out nearly a dozen recommendations, it does not specify where funding for these recommendations should come from, or how much of these programs and policies would be implemented. Maine has roughly $800 million left of the $1.25 billion in CARES Act funding. If we factor in the allocations already made to schools and childcare, this means there is around $126.6 million unaccounted for in the report. 

Broder says that in addition to CARES Act funding, other sources to subsidize their recommendations could include federal stimulus measures or statewide bonding on the November ballot.

It seems unlikely, however, that the state will receive further federal funding, or at least an amount that would significantly reduce the gap. The Treasury has specified that CARES Act funding cannot be used to plug holes in state budgets. 

Maine can ill afford to keep borrowing through bonding. Maine’s current debt service, excluding the bond issues passed in July’s primary, stands at $543 million. What’s more, the projected budget shortfall for FY 2021 is $525 million, according to Kirsten Figueroa, commissioner of the Maine Department of Administrative and Financial Services.

Unless Mills and the Economic Recovery Committee create a spending plan that relies on CARES Act funding alone, Maine taxpayers would be responsible for covering the difference if the governor spends in the fashion recommended by her committee. 


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