Gov. Janet Mills unveiled a new $900 million plan on Wednesday, a combination of already appropriated funding and new appropriations, which will increase current biennial budget spending from $9.9 billion to $10.3 billion.
“This proposal lives within our means, using revenues in a responsible way to address serious, pressing issues – like the housing crunch, homelessness, and food insecurity – while also making thoughtful, strategic investments that will strengthen our economy and make Maine a better place to live in the long-run,” Mills said in a press release.
The new spending will be paid for using 2023 surplus tax revenues and projected future surplus tax revenues.
The Mills Administration said in a press release that Maine has a $223 million surplus for 2023 and a projected revenue increase for 2024-2025 of $71 million. According to the administration, Maine’s constitutional requirement for a balanced budget means that money needs to be spent.
“In total, LD 258 and the change package propose $432 million in appropriations and $455 million in transfers,” the Mills Administration said in a press release. “As required by the Maine Constitution, the proposal is balanced and would result in an overall General Fund biennial budget of $10.318 billion, a limited increase from the Governor’s original proposal of $10.282 billion.”
If passed as proposed, the Legislature would have between $12 million to $13 million left over to spend on other priorities.
So what will Mainers get for spending so much money on a “change package”?
The Mills administration said its goal is to use the funding to address some of Maine’s most pressing problems, including the housing shortage, the homelessness and migrant crisis, the child care shortage, and much needed infrastructure repairs.
The bill includes money to prepare Maine’s ports to support Mills’ offshore wind development goals and give Maine’s State Retirees a one-time Cost of Living Adjustment (COLA) on their pension payouts. The COLA will cost $19.8 million. The port upgrades will cost $12 million.
In addition, the Mills Administration has proposed implementing the Dirigo Business Incentive Program, a corporate welfare program with which Mills wants to replace the soon-to-expire Pine Tree Development Zones program. The price tag to establish that program will be $4.6 million.
The plan also includes additional funding for infrastructure repair projects like school renovations, with $50 million given to the School Revolving Renovation Fund to provide no-interest loans to school districts.
The Mills Administration said other infrastructure spending is intended to draw matching federal funds for projects across the state.
Republicans leaders found little to be optimistic about in the proposal.
“The proposal looks like a Democrat priority wish list,” said House Minority Leader Billy Bob Faulkingham (R-Winter Harbor).
“It fails to give any tax relief to low and middle income working Mainers. It fails to adequately address retirees cost of living increases, but prioritizes over 350 new positions to an already bloated state government,” said Faulkingham.
“This proposal is severely lacking,” he said.
Nevertheless, Republican lawmakers have virtually no leverage to make changes to the bill or extract concessions.
Mills and Democratic lawmaker already passed nearly $10 billion in spending without Republican input or votes through the partisan budget, so little stands in the way of further partyline spending.
What the final spending package looks like depends largely on whether the more liberal members of the State Legislature are satisfied that the proposal adequately addresses their priorities.
Among the items in the governor’s spending plan is another $12 million in emergency housing assistance.
That money will be used largely to pay for temporary emergency shelter for foreign national asylum-seekers who have arrived in Maine without employment or housing over the past four years.
Not included in the spending package, however, is any money for LD 199, a proposal from House Speaker Rachel Talbot Ross (D-Portland) that would allow asylum-seekers, asylees, and even illegal aliens to enroll in MaineCare.
Although LD 199 doesn’t yet have fiscal note showing how much it might cost, making such a change to MaineCare could result in additional general fund spending of more than $200 million per year, depending on how many non-citizens wind up applying for benefits.
