When the 130th Maine Legislature reconvenes for its second session in January 2022, it will debate the state’s next supplemental budget.
Following the announcement from the Revenue Forecasting Commission that the projected General Fund revenue surplus for fiscal years 2022 and 2023 was revised upwards by 9.7%, Gov. Janet Mills, who is expected to release a supplemental budget proposal next month, expressed a desire to return some of the projected additional revenue to taxpayers.
“I would like to examine ways we can use this additional revenue to provide direct financial relief to folks hard hit by these increases to help them through these difficult times,” Mills said in a press release issued on November 23.
Republicans also are interested in returning a portion of the projected surplus to taxpayers and have been since before the upwards revision was announced.
No details on what will be included in the governor’s budget proposal have been released. Neither the governor’s office nor the press offices for the House or Senate Democrats responded to a request for comment about their funding priorities for the next supplemental budget.
According to Senate Minority Leader Jeff Timberlake (R-Tuner), Democratic leadership has not discussed any details related to their supplemental budget priorities with him either.
“They haven’t had a conversation with us. The [Senate] President hasn’t had a conversation with us. Nobody has told us anything,” Timberlake said.
According to John Bott, communications director for the House Republican Office, leadership is “awaiting details” of the governor’s proposal.
House Republican priorities for the supplemental budget, according to Bott, will include the “need to reduce the sales tax and the individual income tax so that the money taken by the government is better aligned with the cost of government, rather than continuing to take in more than what is needed and using the extra to grow government.”
Timberlake also pointed to the role Maine tax rates played in contributing to the 9.7% projected increase in General Fund revenue.
“The majority of that money has come from personal income tax, corporate income tax, and sales tax, which is basically all the working class and the elderly that are retired, people that are living on fixed incomes’ money. So why are we taxing them that much in the first place is the biggest question I would ask. Why are we there in the first place?” Timberlake said.
Timberlake has been advocating a “Give It Back” plan to return the General Fund surplus to voters since October. Now that the projected surplus for the upcoming fiscal year has increased, Timberlake is still in favor of returning money to taxpayers rather than spending it in the next supplemental budget.
“I would like to see it somehow go back to the taxpayers,” Timberlake said. “I don’t think we should be spending it with the way inflation is going, and I don’t want to grow any more government and create any more jobs expanding government to be any bigger than it already is.”
Timberlake sponsored LR 2496, a legislative request that would have returned excess revenue to Maine residents and was ultimately voted down by the Legislative Council when it met on October 25 to screen potential bills for the second session.
While Timberlake’s bill didn’t succeed, the senator said he supports a nearly identical bill from Rep. Jeff Hanley (R-Pittston) that was carried over from the first session to the second session.
LD 327 would put only the amount of money necessary to cover the state’s financial obligations into the General Fund and return 75% of the remaining amount to Maine taxpayers. The other 25% would be transferred to the Maine Budget Stabilization Fund.
Timberlake expressed concern that the influx of federal dollars from the American Rescue Plan Act, which can be spent through 2025, will lead Democrats to try and pass a permanent government program that the state will not be able to afford once the stimulus money is gone.
Timberlake, whose Senate district surrounds Lewiston, did identify several areas of concern that he said he would consider funding in the supplemental budget: nursing homes, hospitals, and the home healthcare industry.
Central Maine Medical Center (CMMC) in Lewiston recently announced it will no longer be able to provide 24-hour treatment for neurosurgical trauma. In October, the hospital announced staffing shortages were driving it to suspend admission of trauma and pediatric patients, as well as close its neonatal intensive care unit.
“I look at what CMMC is going through right now. They’re shutting down more and more of their operation and at what point do we try to figure out why? And I don’t think money is the absolute solution there. But somewhere here we need to find a way to fix it,” he said.
Part of Timberlake’s concern with using surplus dollars to fix Maine’s current healthcare issues is a question of whether nursing homes have received the funding allotted to them.
Over the course of the pandemic, the Mills administration has announced several rounds of funding intended to help hospitals and nursing homes address challenges. In 2020, the administration provided $60 million in temporary Medicaid rate increases, which have since expired. This past summer, the administration announced one-time payments of $40 million to hospitals, nursing homes, and behavioral healthcare providers. The previous supplemental budget also provided $146 million one-time payments for hospitals and nursing facilities.
Timberlake says he doesn’t think nursing homes have received all the money allotted to them and has asked the administration to verify the funds have been received, but has not yet received a response.
Ultimately, Timberlake says that while Republicans may be willing to allocate additional funding for nursing homes and home healthcare, his caucus will ask questions before agreeing to fund any programs in the supplemental budget.
“[W]e’re going to ask a lot of questions before we just carte blanche fund it. We’re not going to do that. We’re going to have questions about how it’s going to be used and where it’s going to be used,” he said.