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Proposed budget bridges revenue shortfall caused by coronavirus emergency

Published: Sep. 10, 2020 at 6:57 AM EDT
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AUGUSTA, Maine (WMTW) - The Department of Administrative and Financial Services has submitted its state budget proposal to Gov. Janet Mills, one that addresses an estimated half-a-billion dollar revenue shortfall caused by the coronavirus emergency.

The balanced budget heavily relies on money from the federal CARES Act and higher-than-expected revenue from liquor sales. The proposal does avoid deep cuts and layoffs for now.

Maine revenue forecasters predicted the state would be short by $528 million by the end of the fiscal year in 2021, a shortfall driven by a sharp drop in sales and income taxes.

But the state plans to tap into $97 million in unused CARES act money. The remaining $422 million will be covered by $70 million in tax revenue from liquor sales and nearly $256 million in savings from various state departments, according to a letter sent to Mills by Department of Administrative and Financial Services Commissioner Kirsten Figueroa. It does not dip into the state’s “rainy day fund,” Figueroa said.

The next state revenue forecast is scheduled for December.

The following statement can be attributed to Grace Leavitt, MEA President:

“MEA is relieved the proposal sent to Governor Janet Mills seeks to maintain funding for our public schools, even during these most difficult times. The complexities of returning to schools safely during this pandemic are extremely challenging. Many critical issues have been addressed and some are still being worked on. Knowing the proposed curtailment cuts will not impact school funding this year is appreciated as our public schools continue to provide the education our students need. Educators across Maine appreciate the efforts of Governor Mills and her team in prioritizing our students and our schools. While schools appear to be left unscathed in this round of cuts, we know Maine needs action from the federal government to make sure our state can continue to support our public education system, from PreK through college. Now more than ever, we need action from Congress and the President to provide much needed relief to our state, our cities and our towns.”

Statement by Dean Staffieri, President of the Maine Service Employees Association, SEIU Local 1989, on today’s recommended curtailments announced by the Mills administration

“We recognize the hard work of Governor Janet Mills and her administration’s staff and commissioners in responsibly addressing the state revenue shortfall associated with the COVID-19 pandemic. It’s clear the administration is focused on maintaining quality services that have been in increasing demand by the scores of impacted Mainers. At a time when the U.S. Senate took summer vacation, the Mills administration has continued to work hard for Maine people. The U.S. House of Representatives passed federal COVID-19 relief for unemployed workers and state and local governments in May in the form of the HEROES Act, but instead of passing it, the U.S. Senate took the summer off. Maine people can’t wait any longer. Without substantial and immediate federal action, essential services in Maine and throughout our nation could be at risk with no end to the pandemic in sight. Members of my union demand Senator Susan Collins and Senate Majority Leader Mitch McConnell pass the HEROES Act immediately.”

The Maine Service Employees Association, Local 1989 of the Service Employees International Union, represents over 13,000 Maine workers.

Copyright 2020 WABI. All rights reserved.

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