Maine Budget’s ‘Rainy Day Fund’ Reaches Statutory Maximum, Surplus to be Distributed to Affordable Housing Programs

Gov. Janet Mills announced Thursday that the state’s Budget Stabilization Fund, commonly known as the “Rainy Day Fund,” has reached a record high and its statutory maximum at $968.3 million, and the state will transfer its surplus into supporting affordable housing efforts.

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Under Maine state law, the Budget Stabilization Fund is allowed to reach a maximum of 18 percent of that Fiscal Year’s General Fund actual revenue, which based on Fiscal Year 2023, amounts to $968.3 million

The Fund reached its maximum after the state ended FY 2023 with a surplus of $141 million, funds which will be distributed into certain accounts, including $52.4 million to the Budget Stabilization Fund.

In addition, $64 million of the surplus finding will go to MaineHousing in an attempt to address the state’s housing shortage.

“Maine is better prepared today to withstand an economic downturn than at any other time in state history because of smart, deliberate financial choices by my Administration,” said Gov. Mills in her Thursday press release.

“Since taking office, we have quadrupled the Rainy Day Fund and produced balanced budgets in partnership with the Legislature, all while making historic investments in Maine people to improve their lives and livelihoods. We will continue to work hard to deliver the resources and support that Maine people need to thrive and succeed,” Mills said.

$35 million will also go towards building affordable rental units in rural Maine through Gov. Mills’ Rural Affordable Rental Housing Program, and $30 million will be used to help incentivize the production of low-income housing through the Low Income Housing Tax Credit Program.

Once these priority transfers are completed, the remaining funds, $3.9 million, will be transferred to the Highway and Bridge Capital Fund for transportation infrastructure repairs.

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“The milestone of a fully funded Budget Stabilization Fund is a testament to the fiscally responsible leadership of the Mills administration,” said Kirsten Figueroa, Commissioner of the Department of Administrative and Financial Services. “Having these funds set aside positions the state to meet its commitments to Maine residents in the event of a rainy day.”