Governor Janet Mills is getting a little more money to play with in her supplemental budget as the nonpartisan Revenue Forecasting Committee has added about $8.8 million to the current $248 million surplus.
Mills is currently proposing to spend most of the surplus to cover rising costs in the state’s Medicaid program, known as MaineCare, and to continue meeting the state’s 55% share of K-12 education costs.
The governor plans to revise her supplemental budget proposal in the coming weeks to include the money increase.
Republicans in the state legislature are strongly opposing Mills’ proposal, contending the surplus money should be used on tax cuts instead.
Meanwhile, the Revenue Forecasting Committee has cut the expected surplus in the next two-year budget by about half, from about $168 million to $83 million.
The committee says the updated forecast is consistent with the expected flattening of State revenues after a period of rapid growth during the pandemic.
The reduced surplus is based on a forecast for lower personal income growth and increased inflation.
The Forecasting Committee says the reasons for the downward change are continued economic uncertainty in Maine stemming from fiscal, geopolitical, and economic developments and accelerating cost-of-living concerns among lower- and middle-income households.
The next two-year budget starts in July of next year, 2027.
Mills is also proposing to tap more than $300 million from the state’s roughly $1 billion Rainy Day Fund for one-time initiatives. This money would mostly be used to cover $300 affordability relief checks for 725,000 Maine residents and for affordable housing programs.
The plan to dip into the Rainy Day Fund is also strongly opposed by Republicans. The fund is currently at its statutory maximum of $1.03 billion, and would be reduced to $705 million under Mills’ plan.
