Gov. Janet Mills’ proposal to set aside $100 million in excess revenues for use in future years is drawing criticism from a progressive think tank and concern from the top two Democrats in the Legislature.
Mills, a Democrat in her sixth year in office, issued a written budget statement Tuesday saying that while the state enjoys a $265 million surplus, a projected revenue downturn could lead to future budget cuts.
“If we do not budget responsibly now, the Legislature will be forced to make painful cuts in the future — just like other states are having to do now,” she said in part one of her State of the State address. ”I urge you to join me in taking this approach — for the long-term fiscal health of Maine.”
In response, the Maine Center for Economic Policy, a progressive group based in Augusta, said the money could be used to help childcare providers, give relief to renters facing unaffordable costs or to build more housing.
“The Governor’s new supplemental budget is a good start in bolstering Maine’s economy, but with so many unmet needs and an already full rainy day fund, now is not the time to forgo potentially transformational investments in Maine people and communities,” Garrett Martin, president and CEO of the center, said in a statement.
In August, Mills announced that the state’s rainy day fund reached more than $968 million, a record high and at the time, the maximum allowed by state law. The fund is permitted to reach 18% of actual revenues and is recalculated annually.
In addition to her proposal to set aside the $100 million and spend $16 million for emergency housing needs, Mills is proposing $10 million to build more than 130 affordable homes, $4 million for Medication Assisted Treatment in county jails and nearly $23 million for K-12 education.
In her evening address to lawmakers, Mills also proposed taking $50 million out of the state’s rainy day fund to help communities impacted by recent severe weather “build and rebuild” with an eye toward being prepared for future storms.
House Speaker Rachel Talbot Ross (D-Portland) praised Mills for her proposals but said there are other needs too.
“I commend Gov. Mills for her ongoing commitment to vital investments in education and child welfare, but as we negotiate our final spending proposal, we must recognize that we still have so many urgent needs to be met,” Talbot Ross said. “We have significant opportunities ahead of us and will honor our commitment to improve the lives of all Mainers.”
For their part, Republicans in the Legislature renewed their calls for tax cuts on Tuesday but did not offer specifics other than to say Mainers should “keep more of what they earn.”
Senate President Troy Jackson (D-Allagash) said in a statement that “there is still work left to do.”
“Whether it is making sure our educators have adequate resources and compensation for the critical work they do, making sure Mainers can access the care they need from preventive health care to long-term, behavioral and mental health care, or making sure Maine children are healthy and safe, I know we can deliver for the people who sent us here,” Jackson said.
Once Mills releases her full budget proposal, it will go to the Appropriations Committee for consideration.