It’s a lucky break in Monopoly to draw the “Bank error in your favor, collect $200” card. But that’s small change compared to finding $760 million.
In August, the state’s nonpartisan Revenue Forecasting Committee issued a grim projection: a budget shortfall of $527.8 million for the current fiscal year and $883.2 million for the 2022-23 biennium. But in December, the committee revised its projections and the numbers, by comparison anyway, are looking up. The forecasters now anticipate a $255 million general fund shortfall this year (roughly half the original projection) and a $395.8 million shortfall for FY22-23.
Helping stabilize finances for the state, its residents and businesses has been an infusion of $7.6 billion in federal COVID-19 relief funds. That included stimulus checks, enhanced unemployment benefits and forgivable loans through the Paycheck Protection Program as well as funding for schools and health initiatives. Federal dollars, higher-than-predicted revenue and judicious state spending during the pandemic have helped Governor Janet Mills’ administration deliver what months ago seemed impossible: a balanced two-year, $8.4-billion budget that does not call for tax hikes or service cuts. The state’s current two-year budget will expire June 30, and the Legislature must approve a new one before then to avoid a state government shutdown.
The proposed budget includes $45 million for MaineCare rate increases for nursing facilities, residential facilities for children and older Mainers and services for adults with intellectual and developmental disabilities as well as $7.5 million for mental health and substance use disorder services. The biennial budget combined with a supplemental budget for the current fiscal year would add $61 million to the state’s rainy day fund. The budget also includes an additional $45 million for K-12 education, inching state government toward the long-held goal of funding 55 percent of essential programs and services. A citizen initiative in 2004 set that threshold and the state has yet to meet it. If approved, the state’s commitment to general purpose aid for education would go from 51.78 to 51.83 percent. It remains to be seen how much additional money local school districts would receive. School administrators beginning the budget process face uncertainty over how long pandemic-related precautions and hybrid learning will continue and the knowledge that many local residents may struggle to pay their property tax bills.
Good news for cash-strapped homeowners includes preservation of the $25,000 homestead exemption for residential properties. The state also will continue to reimburse municipalities for 70 percent of property tax revenue lost due to the exemption. Revenue sharing with municipalities through a portion of state sales and income tax is expected to increase modestly based on current projections.
While lawmakers dissect the proposal and begin negotiations, there will certainly be calls for more austerity and concern that revenues will fall short of projections. Others will argue that the budget does not go far enough to help Mainers still struggling during a pandemic. What Maine people need — and the Legislature should deliver in the budget process — is stability. A budget delivered on time and drawing wide bipartisan support would be welcome news indeed.