Biennial Budget

More wrangling to come on supplemental budget, federal relief spending

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On June 17, the Maine Legislature is expected to adjourn a special session without voting on the supplemental budget or the governor’s plan for spending funds Maine received from the American Rescue Plan Act (ARPA).

The Appropriations and Financial Affairs (AFA) Committee has not discussed the budget since June 1 and there have been no public discussions of the budgets between members of the legislature. The AFA Committee has yet to hold a work session on LD 1733, the governor’s plan to spend the $1.1 billion in State Fiscal Recovery Funds (SFRF) allotted to Maine by ARPA.

In March, Democrats passed the $8.3 biennial budget through both chambers of the legislature by a simple majority vote. This action cut off Republicans, the minority party, from any ability to negotiate its contents.

Absent ongoing negotiations about the $8.8 billion supplemental budget proposal, Republicans may find themselves in a similar position. Legislators have expressed an interest in working the budget and L.D. 1733 together. In order to make changes to either bill, the minority party needs the ability to negotiate.

Unlike federal funding received from the CARES Act, the SFRF funds cannot be spent by the governor without legislative approval. On May 4 of this year, Gov. Janet Mills released the Maine Jobs and Recovery Plan, her proposal for spending the SFRF funds. It dedicates $285 million to immediate economic recovery programs. This includes an allotted $80 million for recovery grants and loan guarantees and $39 million for a program that would go to small group health insurance carriers to reduce insurance premiums for small business, as well as $80 million to replenish the unemployment trust fund.

It also dedicates $294 million to long-term economic growth initiatives, such as various programs to improve Maine’s workforce and increase licensing efficiency. A further $418 million is allotted to infrastructure development projects, which include traditional infrastructure projects like improvements to roads and bridges, as well as initiatives to strengthen the state’s child care system.

The supplemental budget also includes $187 million to meet a mandate set by voters in 2004 by boosting the state’s K-12 public education share to 55 percent and provides $47 to Maine’s public institutions of higher education.

Healthcare related items include $151 million to reform MaineCare and $32 million to replace revenue lost from banning flavored tobacco products. 

The budget proposal would transfer $18 million out of the General Fund and into the Highway Fund to offset revenue lost because of the pandemic. It also puts $52 million into the “Rainy Day Fund” as a hedge against future economic hardship.

The budget panel may meet next week for discussions. Anything they produce would likely have to be reviewed by the Office of Fiscal and Program Review, meaning it may be some time before the legislature holds votes on the matter. The supplemental budget and ARPA spending initiatives are expected to be dealt with when the legislature returns in Augusta in the coming weeks to handle any vetoes issued by Gov. Mills.

About Katherine Revello

Katherine Revello is a reporter for The Maine Wire. She has degrees in journalism and political science from the University of Maine. Her writing has appeared in Reason, The Washington Examiner, and various other publications. Got news tips? Contact Katherine at krevello@mainepolicy.org.

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