How Maine is spending federal rescue plan funds

Under the Biden administration’s American Rescue Plan Act (ARPA), over $4.5 billion of federal funding is flowing into Maine to contend with the impacts of the COVID-19 pandemic. This unprecedented influx of federal funding is on a scale not seen since President Franklin D. Roosevelt’s New Deal helped the country recover from the Great Depression. ARPA funds have helped hasten the country’s economic recovery from the devastating impacts of the pandemic¹ and offered states an historic opportunity to rebound from this crisis.

Where is Maine’s $4.5 billion going?

States and localities were given broad latitude over some ARPA spending, while most of the funds were targeted by the federal government. Maine’s funding breaks down as follows:

$1 billion in discretionary spending to the State of Maine
$500 million to local and county governments across Maine
$3.1 billion directed by Congress to specific programs (including vaccination and testing, increased unemployment benefits, and direct cash payments to families)

US Treasury guidance² gave state and local governments authority to spend federal dollars in a range of categories, including public health response and infrastructure building. This left Maine’s counties and municipalities to consider spending on anything from capital improvements and policing to programs and services that would more directly address the immediate impacts of the pandemic — such as premium pay for frontline workers, child care supports, and housing. While counties and municipalities across Maine continue to grapple with the decision of how to direct these funds, the state has already largely decided how to allocate its portion.

How is the State of Maine spending its share?

The Mills administration outlined its spending priorities for the state’s $1 billion in discretionary funding under the Maine Jobs and Recovery Plan.³ The Legislature approved spending under this plan in July of 2021.⁴ The Mills administration began launching programs under the plan in the fall of 2021, including:

grants to schools, small businesses, and targeted industries such as forestry, health care, and seafood
supports for workforce development and job training
investments in child care, housing, and broadband infrastructure⁵

A state dashboard shows available grant opportunities and other areas the state is supporting with ARPA spending.⁶ Spending under the plan is ongoing with the administration having until the end of 2026 to use the funds the legislature appropriated. Over the past year, the Mills administration has continued to roll out new programs as it proceeds to distribute the funds.⁷ To date, about half of the spending is in some stage of deployment according to the Mills administration.

Data source: Center on Budget and Policy Priorities

How can we ensure an equitable recovery?

The State of Maine can use the influx of federal ARPA funds to create transformative opportunities in the wake of the devastating impacts of the COVID-19 pandemic. The programs the Mills administration creates with the funding the legislature has appropriated will determine how the Maine economy recovers and whether vulnerable Mainers most disproportionately impacted by the pandemic are supported or left behind. The Maine Center for Economic Policy urges the Mills administration to continue to focus efforts on the inequities amplified by the pandemic in order to create a durable, equitable recovery for Maine’s future and ensure dollars allocated by the state are being spent as intended and deliver results for Maine people. County and local governments can follow suit and direct their funds wisely toward pandemic relief to support an equitable pandemic recovery.⁸