Biennial Budget

Legislature, governor pass $8.5 billion supplemental budget

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On June 30, the Maine Legislature passed the $8.5 billion supplemental budget. The bill passed the House of Representatives by a vote of 123-23 and the Senate by a vote of 32-3. It received bipartisan support in both chambers.

Gov. Mills signed the budget on July 1. As an emergency measure, it went into effect immediately upon receiving Mills’ signature. 

The legislature’s Appropriations and Financial Affairs Committee approved the bill, part two of the biennial budget originally proposed by Mills, by a unanimous vote of 13-0 on June 27. It passed the legislature without changes, despite a proposed amendment from Rep. Chris Kessler (D-South Portland) that would have put $9 million towards increasing reimbursement rates for child-community based treatments and outpatient therapy.

Mills and sponsors of the bill on both sides of the political aisle have touted several measures within the budget, including a $300 COVID-19 relief payment negotiated by Republicans that will be made to Mainers who worked during the pandemic and filed a W-2 last year. The budget sets aside $149,800,000 for this purpose. The payment is exempt from both state and federal taxes and is expected to go out late in the fall.

In her originally proposed change package, Mills touted $187 million in spending that would be used to meet the state’s obligation to pay 55% of local education costs, which was part of a referendum passed by voters in 2004 and was never fulfilled. That measure is part of the budget approved by the legislature.

Mills’ original change package also touted enhanced revenue sharing between the state and municipalities. The final budget allocates $23,238,070 in fiscal year 2021-2022 and $46,190,803 in fiscal year 2022-2023 towards this goal, bringing the total in line with projected available resources. It raises revenue sharing to 4.5% in fiscal year 2021-2022 and 5% in fiscal year 2022-2023. 

Another of the governor’s selling points for the budget was property tax relief, which increased revenue sharing is expected to help provide. The budget also expands the Property Tax Fairness Credit, increasing the maximum benefit for eligible families to $12,000 and to $1,500 for seniors. This is a one-time increase, but the budget does also change eligibility to the program to provide approximately 83,000 residents with either property tax relief or rent relief. 

The budget also increases the Homestead Property Tax Exemption. It raises the reimbursement rate for municipalities, currently at 70%, by 3% each year until the state fully reimburses municipalities to cover the program’s cost. It also allows eligible residents to take $25,000 off the value of their home and pay property taxes only on the remaining amount.

The final budget does not include any tax increases and adds a minimum of $60 million to the Budget Stabilization Fund, or rainy day fund, bringing the total to an all-time high of $328.2 million.

Following the legislature’s vote to approve the budget, the governor’s office issued a statement praising Democrats and Republicans for their efforts.

“By achieving 55 percent education funding and full revenue sharing, by increasing property tax relief and sending $300 in hazard pay to working Maine people, we are putting money back into the pockets of the people of this state and investing in a stronger, brighter future. I know this legislative session has been particularly difficult because of the pandemic, and I want to applaud both Republicans and Democrats for working together in good-faith to negotiate a strong budget that we can enact immediately.” said Mills. 

Other measures in the budget include a $20 million appropriation from the General Fund and federal matching funds that requires the Department of Health and Human Services (DHHS) to increase reimbursement rates to nursing facilities through December 31, 2021. 

The budget also has several measures that increase the reimbursement rates under MaineCare. The labor portion of reimbursements made under MaineCare or state-funded home, community-based, and residential services is required to equal at least 125% of the minimum wage, plus taxes and benefits. The 125% requirement is also tied to increases in the minimum wage. The budget also requires MaineCare reimbursement rates be rebased every 5 years.

The budget also authorized DHHS to adopt emergency rules to implement the provisions in the budget over which it has subject matter jurisdiction but no specific authority. DHHS does not have to demonstrate that immediate adoption is necessary to avoid a public health threat. 

Another budgetary measure will allow certain individuals to become eligible for ongoing absentee voter status. Individuals who turn 65 before the next election or who self-identity as having a disability will automatically receive an absentee ballot for each statewide, municipal, or other election until that status is terminated by failure to return a ballot issued during a general election. 

The budget also includes several measures that apply to the Long Creek Youth Development Center. On the same day it passed the budget, the legislature sustained the governor’s veto of a bill that would have closed the Long Creek facility and redirected funds towards community-based programs.

The budget eliminates 13.5 positions in the Long Creek program and transfers funds to the Juvenile Community Corrections program, to be spent on new community-based juvenile programs and housing. It also eliminates a further 6 positions in the Long Creek program and transfers one Juvenile Program Worker position and related costs away from Long Creek and the Department of Corrections. The funds are redirected to the School and Student Support program in the Department of Education, to be used for the creation of a Restorative Justice Coordinator position. 

Mills’ original change package was designed to complement the Maine Jobs and Recovery Plan, her proposal for allocating the funding Maine received from the American Rescue Plan Act (ARPA). The plans for spending Maine’s $1.13 billion in ARPA funds were not included in the budget. L.D. 1733, the bill that allocates Maine’s ARPA dollars, is still before the Appropriations and Financial Affairs Committee, which last held a hearing on the bill on June 9.

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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