Mills unveils $850 million supplemental budget plan

(The Center Square) – Gov. Janet Mills unveiled a $850 million supplemental budget on Tuesday that will provide direct payments to residents, reduce taxes, boost the state’s rainy day fund, and provide more money to fix potholed roads and bridges.

The massive proposal calls for spending $100 million on roads and bridges, about $30 million for public schools, and a similar amount to health care worker payment rates. The package also includes funding for cost of living increases for state pensioners and would pump $30 million into the state’s rainy day fund to bring it to a record $500 million.

But a key element of the plan, which Mills highlighted during her state of the state address last week, would spend $411 million to distribute $500 checks to more than 800,000 residents.

The proposal, which requires legislative approval, also calls for providing two years of free community college for high school students who graduated during the pandemic.

Mills said the historic spending is aimed at tackling some of Maine’s most pressing issues “like inflation and our longstanding workforce shortage, by giving back money to Maine people, delivering tax relief for working families, and providing two-years of free community college to help our students and our employers.”

Mills, who faces a challenge from former Republican Gov. Paul LePage as she seeks a second term, is also pitching plans to reduce taxes for low- and middle-income families.

Her plan calls for increasing Maine’s Earned Income Tax Credit – an anti-poverty program that provides a refundable tax credit to low-income workers – by an average of $400 per family, bringing the total average benefit to 764 a year. She said the changes would help 100,000 people whose household income is less than $57,414 a year.

It also calls for spending $7 million to increase the state’s property tax fairness credit, which will benefit about 100,000 low and middle count income property owners. The credit provides property owners and renters who pay more than 4% of their household budgets on taxes or rent with tax credits ranging from $1000-$1500 a year.

Maine is expecting a windfall of excess tax revenue over the next two years, and the Mills administration and lawmakers have been mulling over plans for months to spend the money.

Mills’ administration says the state’s general fund revenues are up $833 million or 9.7% for fiscal years 2022 and 2023 compared to initial projections in the biennial budget.

Maine officials say a range of factors, including low interest rates, federal stimulus and increased consumer activity, have improved the state’s economic outlook.

The state has also received a windfall of federal funding from relief packages approved by Congress, which helped buoy state finances throughout the pandemic.

In July, Mills signed a two-year, $8.5 billion budget that includes pandemic “hazard” payments to workers and a historic level of school funding.

Kirsten Figueroa, commissioner for the state Department of Administrative and Financial Services, said the supplemental budget builds on that two-year spending plan “by providing relief to Maine people and tackling critical unmet needs across Maine – and all while increasing savings and protecting against potential economic slowdowns of the future.”

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