Maine lawmakers have what can be only be described as a good problem: What to do with the state’s projected $822 million surplus, coming as it does two years into a pandemic that has laid bare a lot of our shortfalls, challenges and inequities?
Maybe a better question is, How does Maine use this one-time infusion of money to help the people most harmed by COVID and its various consequences, while preparing the state up for an uncertain future?
Gov. Mills’ plan for the surplus, released this week following her State of the State address, tries to do just that. Now it’s up to the Legislature to make sure it succeeds.
MILLS’ PROPOSAL
The centerpiece of Mills’ proposal is the $500 checks that would go to most taxpayers, taking up a full half of the surplus.
The remaining half is split between items addressing the pandemic and some of Maine’s toughest and most stubborn challenges. It also provides additional relief and support for low- and middle-income residents.
There’s $50 million for hospitals and long-term care facilities for COVID-related costs, and $12 million to increase pay for child care workers to free up parents to work and relieve Maine’s longstanding workforce shortage.
Free community college for pandemic-era high school graduates, with a price tag of $20 million, also addresses the workforce, while also giving young Mainers a break on school costs. Same with updates to a tax credit designed to relieve student debt and attract workers.
There’s income and property tax relief, including the state’s pledge to pay 55 percent of K-12 education, a promise first kept in the current budget, as well as money to guarantee universal free meals in school – giving all Maine kids the best chance to succeed.
There’s $9.2 million to find and mitigate PFAS, the “forever chemicals” showing up all across the state, as well as $8 million for child welfare, which is under scrutiny following the deaths of several children.
There’s also $10 million for the state’s budget stabilization, or rainy day, fund, putting it past $500 million, its highest level ever.
TASK AHEAD
That’s a lot, much of it supported by Republicans as well as Democrats.
Better analyses are coming as everyone gets a chance to review Mills’ proposal. But the task ahead for legislators is clear: To make sure the funding levels match what’s needed to make a difference, and that the $411 million being sent back to taxpayers couldn’t be spent better elsewhere.
Maine has no shortage of challenges. The state is facing climate change, an aging population, a broken child welfare system, and an unrelenting opioid problem. Maine needs to invest in its aging schools and its workforce, as well as affordable housing, clean energy and local foods.
With inflation hitting gas, groceries and other necessities, the $500 checks make sense as a way to help people fill the gap. But legislators shouldn’t hesitate to reallocate some of the money if investments are needed elsewhere.
TAX CUTS INADVISABLE
The one thing they shouldn’t do is spend the money on a permanent tax cut, as has been suggested by former Gov. Paul LePage, Mills’ likely opponent in the November election.
LePage has long wanted to cut the income tax, and it remains as bad an idea as ever. The forecast of the $822 million surplus is solid, but planning out further than that is a fool’s game, particularly with the pandemic still looming and any future help from Congress very much in doubt, particularly if Republicans make gains in November.
Cutting taxes would only leave Maine less able to deal with any future crises, including a resurgent virus or an economic downturn. It could also hinder the state’s economic recovery, just as it did when LePage cut taxes in his first term, after which Maine lagged the rest of the country.
The surplus is one-time money, fueled by federal relief and higher-than-expected income and sales tax revenue, and it should be treated as such.
It’s also a sign that some people are doing so well that they feel comfortable spending freely, while others are still counting every cent.
Gov. Mills’ proposal recognizes that fact, and tries to address it. Now is the time to make sure it does.
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