Federal government spending strengthens communities, improves quality of life, and boosts the overall economy. In Maine, it helps pay for roads, bridges, schools, public safety, and health care programs like Medicaid. It creates jobs, helps small businesses, and provides emergency assistance during disasters. Without federal funding, Maine would struggle to meet people’s needs, and indeed, recent decisions from the White House to cut the flow of funds to states are already hurting Maine — people have lost jobs, health care providers are cut off from funds, important research is being cut, and farmers aren’t getting paid for their contracts.
As President Trump moves to block states from federal money, here are eight things to know about how it affects Maine.
1. Congress, not the President, is primarily responsible for directing spending
President Donald Trump and Elon Musk’s team have been causing chaos in the federal government in recent weeks, freezing payments to health care providers, cutting support to research organizations, potentially reneging on contracts with farmers, and slashing the federal workforce in Maine with firings and hiring freezes. The President has also threatened to withhold future federal funding from Maine if it does not follow his policy preferences.
Under the US Constitution, Congress has primary decision-making authority for how much federal money is spent, and where it is allocated. While the executive branch helps to distribute that money, it is not allowed to simply shut down programs or withhold funding from states. Executive orders are only legally valid when based on established constitutional authority or existing laws passed by Congress.
2. For every dollar paid in federal taxes, Mainers receive $1.67 in federal support
One of the core functions of the federal government is to ensure national resources are shared fairly, with wealthier states helping to pay for services in poorer states. This means tech moguls in Silicon Valley and hedge fund managers in New York City help staff schools in Skowhegan and pave the roads in Caribou.
Like most states, Maine is a “net receiver” of federal money, meaning it receives more in federal funds than it pays in taxes. According to one estimate, in 2022 the federal government spent an average of $18,714 per Mainer in 2022, while Mainers paid an average of just $11,158 per person in federal taxes. The progressivity of the federal tax code means that the equation is generally most favorable for Mainers with the lowest incomes, who pay less taxes and receive more benefits, while Mainers with higher incomes contribute more and receive less.
3. Maine received $21 billion in federal assistance last year
The federal assistance to Maine is a significant portion of the state’s economy. In federal fiscal year 2024, state and local governments, individuals, and organizations in Maine received $20.8 billion in federal funding (this figure does not include the total value of Medicare health coverage, much of which goes through insurance companies in other states, nor spending on the Post Office, which is an independent entity). That’s around a fifth of the state’s entire Gross Domestic Product.
The sheer scope of federal aid means that cuts to federal funding would be hard for state lawmakers to replace with local revenues. The nearly $21 billion Mainers received in federal funds in 2024 is almost four times the amount the state raised in General Fund revenues over the same time period. In other words, if the federal government disappeared overnight, the state would have to quintuple its tax rates to continue providing current level state services, provide health care and safety nets currently supported by the federal government, and replace critical workforces ensuring our collective safety, health, and environment.
Even partial cuts to certain federal programs could be difficult for state lawmakers to backfill, given the size and scope of the federal government’s role. For example, the US Department of Education awarded $347 million to Maine entities in FY 2024, approximately the same amount of revenue that would be raised through a 4% income tax surcharge on incomes over $200,000 a year.
4. Federal programs pay billions in benefits to individual Mainers
The largest portion of federal funds goes directly into Mainers’ pockets. In FY 2024, the federal government paid out just under $8 billion in Social Security benefits to Maine retirees, survivors, and people with disabilities. Another $900 million went to pay veterans’ benefits.
5. Federal funds support state and local budgets
In 2024, Maine state government and quasi-government entities received just over $6 billion in federal funds. The core functions of state government received a little under $5 billion of that, which represented a little over one third of the state budget for the year. By far the largest portion of this is around $3.2 billion in funding for the state’s Medicaid program, known as MaineCare, which provides health care coverage for 400,000 Mainers. The federal government pays approximately two thirds of the cost for this program, without which it would be extremely difficult for the state to maintain the program.
The state also administers several other assistance programs on behalf of the federal government, including $340 million in food assistance through the Supplemental Nutrition Assistance Program (SNAP), $150 million in Section 8 housing vouchers, and $78 million in cash assistance through Temporary Assistance for Needy Families (TANF).
The federal government also plays an important role in helping states build out infrastructure — something that is especially important in a rural state like Maine. In FY 2024, the federal government provided $344 million in highway planning and construction funding, as well as $267 million for broadband infrastructure to underserved areas.
Local governments, particularly local school districts, also receive federal support, to help ensure all kids have access to a good education, regardless of their ZIP code. In 2024, Maine schools received $66 million in special education grants, $65 million to subsidize Maine’s universal free school lunch program, and $62 million in “Title I” grants to help children from families with low incomes.
6. 12,000 Mainers work for the federal government
The federal government directly employs over 12,000 people in Maine (15,000 if including United States Postal Service workers). The vast majority work in defense and veterans’ sectors, including more than 7,000 US Navy workers (mostly at Portsmouth Naval Shipyard) and nearly 2,500 workers in the Veterans’ Administration. There are hundreds of workers who keep Acadia Nation Park open, offer services to farmers, and help people get their Social Security benefits.
There are also plenty of Mainers who are not federal workers, but who work in jobs that depend heavily on federal funding — for example the shipbuilders at Bath Iron Works and the researchers at Jackson Labs.
7. Maine businesses and nonprofits rely on federal funding
In addition to direct funding to individuals and grants to state and local governments, the federal government delivers many of its functions by contracting with, or issuing grants to, private organizations. Around $3 billion in funding each year is spent via contracts to deliver goods and services directly to the federal government. Almost all of this ($2.9 billion) is in defense department contracts with organizations like Bath Iron Works.
Hospitals rely significantly on federal revenues. Just over half of all Mainers (51%) have some kind of federally-funded health insurance, either through Medicare, Medicaid, or a veterans’ program, and these payments make up a significant portion of hospitals’ revenues.
Maine’s universities and colleges received $335 million in 2024, largely through research grants, as well as Pell Grants and Work Study funds to cover the tuition of eligible students.
Other large nonprofit institutions like Jackson Labs receive tens of millions of dollars in research-related grants each year.
The federal government also supports community organizations that help individuals in need, including the network of Community Action Programs across the state, and agencies like Catholic Charities, Goodwill Industries, and Preble Street.
8. Important federal funding must be protected
The federal funding Maine receives is pivotal in sustaining the state’s economy and supporting its communities. From direct payments to individuals, to funding for state programs and infrastructure projects, the financial support provided by the federal government ensures Maine can maintain essential services and improve the quality of life for everyone who lives there. As policymakers navigate the complex landscape of federal funding, it is crucial to recognize the profound impact these resources have on everyday Mainers, and to work to protect these funds and jobs from undue interference.
