During her annual State of the State address, Gov. Janet Mills announced her intention to return $411 million of the state’s projected $822 million General Fund surplus to taxpayers.
“These givebacks, by direct checks to the people, will amount to about $500 per person and will be distributed to an estimated 800,000 taxpayers in Maine to help them offset added costs,” Mills said during her February 10 address.
The governor’s speech Thursday was the first time Mills and a joint convention of the legislature met in-person for the address since the beginning of the pandemic.
Mills reflected on the challenges the COVID-19 pandemic posed to the state and her administration, and tried to strike a positive note for the future.
“Last year’s emergency measures no longer serve the purposes they once did, nor should they. As science and trends evolve, our responses evolve as well. Today, we focus not on telling people what they cannot do. We focus on telling people what they can and should do,” she said.
Mills touted economic metrics she said show the state is “making a comeback.” She noted Maine’s gross domestic product has “surpassed pre-pandemic projections” and has grown at the second-fastest rate in New England between when she took office and the third quarter of last year.
Mills further noted the state’s unemployment rate has fallen from a pandemic-high of 9.1% to 4.7%, which she said is still too high, and highlighted the tourism peak Maine experienced last summer.
The governor called the growth of the Rainy Day Fund a “sign of stability” and noted it has “more than doubled” under her administration to nearly $500 million.
She also stated that, after passing “strong, balanced budgets,” the state has a record budget surplus.
Early in the speech, Mills alluded to calls from Republican leadership, including Sen. Jeff Timberlake (R-Androscoggin), the Senate minority leader, to return a large chunk of the projected surplus to Maine taxpayers.
“I think they’re right,” Mills said before announcing her desire to return $411 million to approximately 800,000 taxpayers in the form of $500 checks.
Over the course of her roughly hour-long address, Mills also unveiled several policies, many of them education-related, and spending initiatives that will be included in her forthcoming supplemental budget request.
One of these was a promise to make high-speed internet available to all Mainers within two years.
“I pledge to you tonight that every person in Maine who wants to connect to high-speed internet will be able to do so by 2024–just two years from now,” she said.
Mills offered no details during the speech about how this would be achieved.
Mills said her supplemental budget proposal, expected to be delivered sometime next week, will include $12 million to help pay for child care workers. The governor credited House of Representatives Speaker Ryan Fecteau’s (D-Biddeford) proposed legislation to provide pay increases for child care workers and said she supports the proposal.
Mills also referenced a 2004 ballot initiative that required the state to pay 55% of K-12 public education. Funding for the measure was part of Mills’ Part 2 Fiscal Year 2021-2022 budget, which was signed in July 2021.
Mills proposed creating an Education Stabilization Fund, “capitalized with $30 million from the General Fund,” but didn’t elaborate further other than to say it would be used to stop the state from underfunding education.
Mills also said her supplemental budget will include “money to fully fund universal free meals in our schools.” The governor did not specify how much money she will request be put towards this policy.
She also recommended providing one-time funds to “offer Maine-built greenhouses to as many schools and communities as possible to promote community gardens and teach kids and their families how to grow their own food.” Mills also did not say how much money she will propose be used to fund the greenhouses at Maine schools.
The governor further touched on the impact the pandemic has had on school children, but did not make any promises related to changing Maine CDC protocols for schools.
“Maine has placed a high priority on keeping classrooms open, but even so, too many kids have lost the vital connections with their school, their friends, their teachers and their academic path. Children need structure. They need to be in school. But kids can also learn while doing, and they can learn outside the walls of a classroom,” said Mills.
She touted “experiential learning” and said she will direct Department of Education Commissioner Pender Makin to develop a “new collaborative, using federal enrichment funds, to get children outdoors this summer, exposing them to lived experiences that will get them ready for life and new careers.”
Turning to higher education, Mills announced her supplemental budget will include funding to “stave off any tuition hikes across the University of Maine System.”
Mills also announced she wants to use $20 million to make two years of community college tuition free to high school classes graduating between 2020 through 2023. Mills said students who enroll full-time in community college either this fall or next fall will have “every last dollar” of tuition paid for by the state.
Students currently enrolled in two-year programs can also receive some help with tuition.
“We will cover the last dollar of your second year,” she said.
Mills also talked about student loan debt and noted Sen. Matt Pouliot (R-Kennebec) has been working on legislation to streamline the Maine Opportunity Tax Credit.
“This legislation, which received bipartisan support in Committee, transforms the program from an obscure bureaucratic tax benefit available to just a few, into a strong student debt relief tool available to all. I like it,” Mills said.
The governor added that she will fund an overhaul of the Opportunity Tax Credit that makes anyone who lives and works in Maine eligible for up to $25,000 in debt relief over the course of their lifetime, “regardless of what type of degree they have or where they graduated or what type of work they do now.”
Mills also talked about the stresses Maine hospitals and the healthcare system have faced because of the pandemic.
“You are all true heroes,” Mills said of healthcare workers who have worked throughout the pandemic.
She announced her intention to allocate $50 million in state and federal funds to hospitals and nursing homes “to sustain them through these difficult times.” Mills offered no details about what initiatives those dollars would fund. She defended her decision to impose a vaccine requirement on health care workers and referenced old articles written by Maine newspapers to note the state has had persistent labor issues predating the pandemic.
Mills’ final announcement of the evening was the convening of a Silver Cabinet, which she said will mirror the state’s Children Cabinet.
According to Mills, the cabinet will be used “to mobilize our people, to eliminate silos across State government, and to enhance coordination and communication among all players to address long-term care issues and ensure that every person in Maine may age safely, affordably, in a way that best serves their needs.”
The Republican response to Mills’ address was delivered by Timberlake and Rep. Kathleen Dillingham (R-Oxford).
Timberlake and DIllingham highlighted the challenges worker shortages, the increased cost of goods and inflation are posing to Mainers. They also said they are “not seeing transparency” at agencies like the Department of Health and Human Services, which Timberlake said has not answered questions about where funding is going, despite numerous requests.
Dillingham and Timberlake also noted the initiatives proposed by Mills during her address lack detail. Dillingham said that details are where the parties can find agreement. Timberlake added his party is looking forward to receiving and reviewing Mills’ supplemental budget to get a better sense of all the policies it contains.
Former Governor Paul LePage, a gubernatorial candidate for 2022, also issued a statement following Mills’ address. LePage attacked Mills for touting the size of the budget surplus and the growth of the Rainy Day Fund.
“Tonight, Janet Mills gave her re-election campaign speech in a building full of political insiders. It is fitting for someone born and raised in politics. Instead of working to fully eliminate Maine’s income tax like I proposed, Janet Mills is promising more and more spending, propped up with funny money from deficit spending out of Washington, DC. However, no debt-fueled, funny money from Washington, DC can paper over Janet Mills’ failure to manage Maine’s economy,” LePage said.
Matt Gagnon, CEO of Maine Policy Institute, criticized Mills’ plan to return some of the state’s budget surplus to taxpayers in the form of direct checks rather than tax cuts.
“Nobody is asking the fundamental question of, ‘Why is the government taking this money from us in the first place?’ Governor Mills is squandering an opportunity to help Mainers fight inflation by reducing their future tax liability, which would do much more to help our economy and individuals struggling to make ends meet than taking money from them just to give some of it back many months later,” Gagnon said.
Earlier in the day, both houses of the legislature convened to deal with legislative business. Before adjourning for the day, the Senate receded and concurred on LD 842, an emergency resolve that would create a commission to examine reestablishing parole in Maine.
The House also accepted the committee reports of several pieces of legislation, including LD 555, a bill that would have given public sector employees the right to strike and which the Committee on Labor and Housing voted “ought not to pass.”
The House also accepted the “ought not to pass” report of the majority of the Criminal Justice and Public Safety Committee on LD 1799, a bill that would have required law enforcement agencies to retain the serial numbers of stolen firearms.
LD 1759, an emergency bill which would allow lobstering to begin at 4 a.m. in September, was passed to be engrossed by the House. LD 1307, originally intended to ban the sale of fireworks in the state, was also engrossed with the passage of an amendment that increases the penalties for violating local ordinances governing the use of fireworks.