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Appropriations Committee receives briefing on state finances, including revenue surplus and ARPA spending

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At the Appropriation and Financial Affairs (AFA) Committee meeting on December 7, Department of Administrative and Financial Services (DAFS) Commissioner Kirsten Figueroa discussed the stimulus funds Maine received from the federal government as a result of the COVID-19 pandemic.

Maine State Economist Amanda Rector and Michael Allen, the state’s associate commissioner of tax policy, also provided an overview of recent news that the General Fund revenue forecast was revised upwards by 9.7%. According to Figueroa, Gov. Janet Mills will deliver a supplemental budget proposal addressing the surplus next month.

Maine received $4.6 billion from the American Rescue Plan Act (ARPA), $3.1 billion of which was earmarked by the federal government.

Of the remaining $1.5 billion from the Coronavirus State and Local Fiscal Recovery Funds established by ARPA, the $1 billion Maine received from the State Fiscal Recovery Fund was allocated in Mills’ Maine Jobs and Recovery Plan. The remaining $500 million, from the Local Fiscal Recovery Fund, was divided between payments made to local government entities directly by the federal government and funds equaling $119.2 million that the state distributed to municipal non-entitlement units, defined as local governments serving fewer than 50,000 residents. 

Figueroa stated 99.7% of the money in Maine’s Local Fiscal Recovery Fund, totaling approximately $99.4 million, has been distributed. A further $100,000 dollars is pending and $77,000 remains outstanding. 

According to Figueroa, payments have been issued to 455 municipalities since Maine’s application portal opened on August 25. Despite outreach from the department, Figueroa says 16 municipalities in the state have not signed up to receive funds.

Municipalities that have not yet signed up to receive funds have until December 15 to apply. If unclaimed funds remain after the date applications close, they will be distributed to all municipalities that have claimed. Figueroa said based on the amount of money currently left over, payments are likely to range from less than a dollar to $5,000.

Figueroa also said a national survey found that in many states, rural municipalities are not participating in the program, but Maine is “bucking that trend.”

Money municipalities receive from the Local Fiscal Recovery Fund can be put towards water, sewer and broadband infrastructure. They can also be used to address the public health impact of COVID-19, replace lost public sector revenue, provide financial assistance to small businesses affected by the pandemic and provide premium pay to public health and safety employees who performed essential work during the pandemic.

Figueroa also provided an update on initiatives funded by State Fiscal Recovery Funds and passed as part of the Maine Jobs and Recovery Plan, and noted those efforts are progressing.

Figueroa said $193 million of funds have been approved for fiscal year 2022-2023. Another $71 million has been approved for fiscal year 2024-2025 and a further $733 million is in the process of being approved. Figueroa noted that DAFS is working with 23 agency partners and has given final approval to 17 business cases.

Among the cases that have received funding are $20 million in economic recovery grants, administered through DAFS, and $2.5 million for healthcare workforce recruitment, administered through the Department of Health and Human Services.

Figueroa also provided an update on the $285 disaster relief payments the state awarded to Mainers who worked during the early days of the pandemic.

To be eligible, residents had to have filed a state individual income tax return for 2020 by October 31, 2021 with an income amount under $150,000 for married filers and $75,000 for single filers.

The State Tax Assessor’s office identified 524,754 eligible recipients to receive the $285 payment. According to Figueroa, DAFS is more than one-third of the way through issuing payments.

As of November 3, Figueroa said 39% of the checks had been processed by the U.S. Postal Service. A further 44% of the payments had been reverified by the Maine Revenue Service and will be mailed shortly.

While checks were initially supposed to be sent via the mail by no later than December 31, Figueroa said that DAFS is adjusting the timeframe for the final date by which people should expect to receive checks to late January as a result of the holiday-related increase in mail volume.

Figueroa said that the agency is seeing between 1.5% and 2% of checks being returned because of a mailing address issue.

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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