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Mills proposes major new spending plan with revenue surplus

Gov. Mills' proposal makes an investment in Maine public schools and meets the state’s obligation to pay 55% of the cost of K-12 education

AUGUSTA, Maine — Gov. Janet Mills sounded excited Wednesday, as she announced a plan to do what her two immediate predecessors could not—comply with the will of Maine voters.

“Seventeen years ago, Maine voters overwhelmingly supported a bill to require the state to pay 55 percent of the cost of public education. Today, at long last, we fulfill that commitment," she said during a virtual press conference Wednesday afternoon. 

Mills unveiled a proposal to add $187 million to the new, two-year state budget to finally meet the 55 percent goal.

The money is part of a wide-ranging proposal that draws on more than $900 million in projected tax revenue to pay for new or expanded state government needs.

The money, Mills said, is an indication the state’s economy is doing well and rebounding from the problems caused by the 2020 downturn of the economy, due to the coronavirus pandemic. At that time, the Mills administration and the Legislature made budget adjustments and curtailed certain spending. 

Since then, the economy has picked up and that, along with billions in federal dollars for unemployment and other benefits, has led to the current projections for $939 million in available revenue over and above the so-called “Part 1" biennial budget. 

Mills is using about a third of the total Part 2 budget for education.

Besides the $187 million to meet the increased funding goal for General Purpose Aid to Education (GPA), the proposal provides $47 million for higher education, $20 million for a scholarship program, and a $50 million boost to the revolving loan fund for school renovations.

Mills said the investment will do more than help schools.

“Funding for GPA will go to two places—your kids’ classroom and your own pocketbook because it helps hold down property taxes dedicated to education," she said.

Other parts of the budget plan include:

  • $151 million for Maine Care health programs, including nursing homes
  • $22.3 million programs to help elderly and low-income Mainers
  • $80 million to increase municipal revenue sharing payments to towns and cities
  • $40 million to begin cleanup of land and water contaminated by PFAS  chemicals 
  • $52 million to be deposited in the state’s “Rainy Day Fund," bringing the total for that fund to $319 million, which Mills said is the highest its ever been

This package now lands in the Legislature. Democratic Senate President Troy Jackson says there will be changes made to what the governor proposed, but said he generally likes what he sees, especially meeting the promise to schools.

“Because it doesn’t just mean schools and children are well funded, it means relief for property taxpayers who have been oppressed across the state for too long,” Jackson said Wednesday.

Republican Senn. Jeff Timberlake said they hope to get other priorities included, such as a tax credit for those who kept working during the pandemic, to match the $10,200 credit approved in March for Mainers who were on unemployment. However, he also said there’s concern the budget commits the state to continue higher spending in the future.

“I will tell you today I am very concerned about the ongoing spending proposed here, without making sure we have enough to balance into the future,” Timberlake said.

Mills and Legislative Democrats say the current budget and revenue projections show more than enough money coming in from expected tax revenues to keep the budget balanced for the next four years. 

The Legislature’s Appropriations Committee will now begin evaluating all the proposals. As the schedule currently stands, lawmakers have a month left in the session to do that work and deal with hundreds of bills still awaiting either initial or final action.