“Today, I am here to say to Maine people: help is on the way. You are our greatest asset – and this budget delivers for you.”
One day after winning the overwhelming support of the Legislature, Governor Janet Mills signed the supplemental budget into law today.
The budget delivers $850 direct relief payments to Maine people to help with the high costs of inflation– one of the strongest relief proposals in the country. It provides tax relief to working Maine families and two years of free community college to pandemic-impacted students, among other important initiatives.
In total, the budget give back is expected to deliver $1,700 in relief to the average Maine household.
“We have shown once again that through hard work, Democrats, Republicans, and Independents can come together to do what is right for Maine people — and that we can do so without the rancor or bitter partisanship that has divided Augusta in the past,” said Governor Mills. “We may not be able to control inflation or global markets, but we can make sure that Maine people have what they need to grapple with these rising costs – and that is what we are doing. Today, I am here to say to Maine people: help is on the way. You are our greatest asset – and this budget delivers for you.”
With Governor Mills’ signature, the emergency legislation takes effect immediately. At the direction of the Governor, the Department of Administrative and Financial Services (DAFS) will issue the payments as quickly as possible to an estimated 858,000 Maine people – with a target date of June 1, 2022 to begin delivery. The payments will be delivered via mail, which is the most reliable method of distribution, to ensure that the money is delivered without significant error.
“Thanks to the partnership between this Administration and the Legislature, we have once again achieved a budget that balances Maine’s spending as required by law while also delivering much-needed relief to Maine people in a way that protects both our citizens and the State’s fiscal stability against future economic downturns,” said Kirsten Figueroa, Commissioner for the Department of Administrative and Financial Services. “We will begin the work immediately of getting $850 checks into the mailbox of every Maine adult who qualifies, and, as always, will continue to carefully monitor the Maine economy, the wellbeing of Maine people, and Maine’s fiscal health, investing in long-term solutions while maintaining the State’s solid financial position.”
Highlights of the supplemental budget include:
- Inflation Relief: Gives back more than half of the State’s surplus – $729.3 million – in the form of one-time $850 checks directly to an estimated 858,000 Maine people. Delivering relief in this way provides Maine people with the freedom to decide for themselves how best to use the money, whether it be for groceries, gas, heating fuel, electricity, or other expenses. Recipients must file a Maine individual income tax return as a full-time resident by October 31, 2022 and not be claimed as a dependent on another’s tax return. Eligible Maine people must have a Federal adjusted gross income (FAGI) of less than: $100,000 if filing single or if married and filing separately; $150,000 if filing as head of household; or $200,000 for couples filing jointly.
- Tax Break for Maine Retirees: Exempts additional Maine retirement pension from income tax, improving the deductions for residents from $10,000 to $25,000 in tax year 2022, to $30,000 in tax year 2023 and to $35,000 in tax years 2024 and beyond. This will provide $36.8 million in income tax relief for Maine retirees in 2022, with an average tax cut of $560 in just the first year. Retirement pension income from any source will be tax exempt in Maine up to $35,0000 per individual by tax year 2025, providing an annual average tax cut of approximately $795. Military pensions and annual social security income remain fully exempt in Maine.
- More Property Tax Relief: Provides $7 million in ongoing General Fund dollars to ensure stable housing by increasing the maximum benefit of Maine’s Property Tax Fairness Credit. An estimated 100,000 low- and middle-income property owners and renters who pay more than 4 percent of their household budgets on property taxes or rent will be eligible for a refundable tax credit valued at up to $1,000 each year, with an even more generous $1,500 in maximum relief extended to seniors.
- Increased Tax Relief for Low- and Middle-Income Working Maine Families: Provides $27.6 million in ongoing General Fund dollars so families can afford necessities and fight poverty by increasing the value of Maine’s Earned Income Tax Credit (EITC), which provides a refundable tax credit to working Maine people and families. This increase is estimated to help 100,000 Maine people, primarily working families with incomes of less than $57,414, by increasing the maximum benefit by an average of $400 per family, bringing the total EITC benefit per family to an average of $764 per year.
- Two Years of Free Community College: Dedicates $20 million in one-time General Fund dollars to provide up to two years of free community college for all students from the high school graduating classes of 2020, 2021, 2022 and 2023 who enroll in a Maine community college full-time.
- Overhauls Student Loan Debt Repayment Program: Provides an annual $2,500 or up to $25,000 lifetime refundable tax credit benefit for student loan debt relief. The supplemental overhauls the Education Opportunity Tax Credit and transforms it into a powerful, nation-leading tool to retire student debt for graduates and help employers to draw people from all walks of life to work and live in the State of Maine.
- Prevents Tuition Hikes Across University of Maine System: Provides nearly $8 million in one-time General Fund dollars to help the University of Maine System keep tuition flat for in-state students and provides ongoing funds for the System to invest in updating and renovating its campus buildings.
- Increases Pay for Child Care Workers and Early Childhood Educators: Provides more than $12 million in ongoing General Fund dollars to increase pay for child care workers and early childhood educators to strengthen our child care system across Maine, consistent with the goals of legislation sponsored by House Speaker Ryan Fecteau, and in addition to the significant investments the Maine Jobs & Recovery Plan makes in expanding child care and Pre-K education.
- Fully Funds Free School Meals: Provides nearly $27 million in ongoing General Fund dollars, to be combined with the $10 million previously set aside by the Governor and Legislature, to fully fund universal free meals in public schools, consistent with an initiative spearheaded by Senate President Troy Jackson.
- Expand Children’s Health Insurance: Provides $3.2 million in General Fund dollars, which will leverage more than $9 million in Federal funding, to expand the Children’s Health Insurance Program, otherwise known as CHIP, to provide comprehensive coverage to an additional 40,000 Maine kids.
- Increases MaineCare Rates: Provides $30 million in ongoing support from the General Fund to fully implement updated rates for direct support worker wages, add and accelerate new cost-of-living adjustments for rates, and raise rates to be sufficient to pay direct support professionals at 125 percent of minimum wage. This is in addition to the more than $500 million investment already being made through the currently enacted biennial budget for MaineCare and provider payments.
- Supports Maine Hospitals and Nursing Homes: Sends $25 million in one-time funding to Maine hospitals, including $6.8 million from the General Fund, as well as $25 million in one-time funding to long-term care facilities, including $7.5 million from the General Fund, to help these Maine health care organizations deal with one-time pandemic related costs.
- Tackles PFAS: Dedicates an initial $60 million in one-time General Fund dollars to capitalize a Trust Fund to Address PFAS Contamination, consistent with the intent of LD 2013 and with the goal of securing additional Federal and other sources of funding in the long-term, as well as approximately $9.3 million for PFAS mitigation and related efforts in Maine during 2022 and 2023, including for in-state lab capacity, wildlife testing, and additional farmers assistance.
The budget also maintains the Budget Stabilization Fund, otherwise known as the Rainy Day Fund, at $493 million, the highest it’s ever been. Under Governor Mills, Maine’s Budget Stabilization Fund has more than doubled.
The supplemental budget is balanced and takes a cautious, fiscally responsible approach, dedicating more than 75 percent of the surplus to one-time initiatives rather than ongoing spending after the nonpartisan Revenue Forecasting Committee noted that the long-term revenue projections are “volatile and susceptible to significant downside risk” in the years to come.
It constrains net appropriations to just $172 million of the $1.2 billion surplus, dedicating more than 75 percent of the surplus to one-time initiatives and savings as a hedge against economic uncertainty, rather than ongoing spending. The proposal results in a $8.67 billion General Fund budget. The currently enacted General Fund budget is $8.5 billion.
It builds off a previous budget measure – also passed nearly unanimously by the Legislature – that achieves 55 percent of the cost of education, fully restores revenue sharing with municipalities, replenishes the Land for Maine’s Future Program, and provides a total of $371 million in relief to Maine people and business, including $285 Disaster Relief Payments to more than half a million Maine people.
It also complements the Governor’s Maine Jobs & Recovery Plan, her Administration’s plan to use American Rescue Plan Act funding to improve the lives of Maine people and families, help businesses, create good-paying jobs, and build an economy poised for future prosperity.