News headlines say Maine has another “budget surplus.” While it’s true that the state has a flush bank account, it also has a stack of unpaid bills waiting in the mailbox.
State officials project Maine will have $139 million in unexpected revenue in the current fiscal year, and more than $500 million total through the next four years.
Add in our record-high rainy day fund, which is maxed out at $968.3 million, and there is no doubt that Maine is in great financial shape.
With revenue from income tax returns and consumer spending and corporate profits outpacing earlier projections, it’s clear, too, that a lot of individual Mainers are benefiting as inflation subsides and the U.S. economy hums along.
UNEVEN RECOVERY
But you don’t have to look very far to find Mainers who aren’t getting a share of the recovery.
Our neighbors who are homeless, or who spend so much on housing they don’t have much left for anything else. The kids who live every day in and around poverty, and those who need help from underfunded state services. Every student who loses out when schools can’t find enough teachers and ed techs. Every person who misses out on care because it’s too expensive or not available, disrupting their lives and getting in the way of their ability to work or gain skills.
To their credit, the Mills administration and the Legislature have made wise investments in these areas. But no one can honestly say they’ve done enough. The two-year budget passed over the summer put a lot of state money where it was needed, but it also left unfunded dozens of bills that address the roadblocks in people’s lives, and which already passed committee and the full Legislature.
As Gov. Mills prepares a supplemental budget request to hand legislators early next year, setting the framework for how the surplus will be spent, she should make it a priority to fund those unfunded bills, as well as other critical legislation that will be coming before the Legislature next session.
TARGETED RESPONSE
Previously, Mills has opted to send money collected in surplus of the budget back to taxpayers in the form of checks. This was a justifiable response first to the pandemic, which harmed people up and down the income ladder in ways that were hard to predict, and again during the double whammy of record inflation and high heating costs, which made last winter so difficult.
But now, with the economy working well for some but not others, a more targeted approach is required.
Unfunded bills regarding affordable housing and shelter operations, as well as those covering teacher pay, minimum wage, general assistance and student behavioral health, all address problems harming Mainers, holding them back as they seek a productive and rewarding life.
They harm the economy, too, as barriers keep residents from working as much as they’d like, and prevent Maine businesses from growing at a time when demand is high.
In addition, legislators will have to fund the legislative response to the shootings in Lewiston, which should include laws aimed at improving the mental health system as well as reducing access to firearms. Maine’s embattled child welfare system is in need of major help as well.
‘INFLATIONARY POLICIES’
Maine Republicans, in the legislative minority, say yet again that the budget surplus is a sign that taxes are too high. Rep. Josh Morris, lead Republican on the Health Coverage, Insurance and Financial Services Committee, said last week that lawmakers should reduce spending and taxes to help Mainers “crushed by high costs” – the result, he claimed, of “inflationary progressive policies.”
However, the most recent tax cut plan released by Maine House Republicans gave little to no benefit to low-income residents while the largest reduction went to wealthy Mainers – exactly those who are having few financial problems these days.
And the “inflationary” policies passed in recent years? They have helped produce a recovery that has taken hold far faster than the one following the Great Recession, and put the U.S. in a much better position than other rich nations across the world.
The economy is doing well for a lot of people. But it won’t be all it can be until it works for everyone else.
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