Gov. Janet Mills signed a two-year, $8.5 billion budget on Thursday that includes pandemic “hazard” payments to workers and a historic level of school funding.
A key provision of the budget includes $187 million to meet the state’s obligation to pay 55% of local education costs, which was mandated under a previous state law.
The plan also includes $300 one-time “hazard” payments for workers earning less than $75,000 per year, or joint filers making less than $150,000, who worked during the pandemic. The provision is projected to cost the state an estimated $150 million and benefit about 500,000 taxpayers.
Cities and towns will see more tax revenue flowing to their coffers from increased revenue sharing with the state, which is also a part of the budget plan.
Gov. Janet Mills called the budget a “historic investment in the people of Maine, in our future, and in our economic recovery.”
“The dawn of a new, brighter day is here,” Mills said in a statement. “As we turn the corner on a deadly pandemic, the State of Maine – under my Administration and the bipartisan leadership of this Legislature – has finally delivered on its longstanding promises to the people of our great state.”
Senate President Troy Jackson, D-Allagash, said the spending package reflects what happens “when we get folks around a table and work together in good faith to come up with common sense solutions.”
“It also makes good on the state’s commitment to fund 55% of education costs for the first time since it was mandated by the voters in 2004,” Jackson said. “More importantly, it ensures no child will have to go hungry at school.”
Republicans said the spending package included a number of their priorities including tax rebate funding for nursing homes and increasing reimbursements to cities and towns to promote property tax relief.
“This piece of the budget proves that Maine citizens are better served when both parties have a seat at the table,” House Republican Leader Kathleen Dillingham said.
Approval of the new spending plan comes three months after Democratic legislative leaders used a seldom employed political maneuver to push through an initial version of the budget without a single Republican vote.
At the time, Republicans blasted the spending proposal as a “sham budget” and held a press briefing at the state house outlining their agenda for the budget. That included a proposal to provide a $10,200 income tax exemption for people who didn't collect unemployment during the pandemic.
The latest budget includes targeted investments in health care, mental health and substance abuse and expanding broadband access while ensuring that the state has enough funding and resources to deal with the COVID-19 outbreak and vaccine rollout.
It doesn’t raise any wholesale taxes and boosts the state's “rainy day” reserve fund by $60 million to more than $328 million.
The spending plan is buoyed by $7.6 billion in federal pandemic relief funds, which will be used to reduce the state's projected revenue shortfalls over the next two years.
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