Last Friday the appropriations committee approved an $11.5 billion “continuing services” budget to continue state operations at a more-or-less flat level for the next two years. While some initiatives in the Governor’s biennial and supplemental budget proposals were included, the document does not include any new revenue sources or cuts to ongoing programs. Most importantly, lawmakers largely left cost-of-living adjustments for direct care workers out of this smaller budget.
The move gives the legislature time to consider new initiatives and revenue sources through the end of session without risking a government shutdown in July, following Senate Republicans’ refusal to pass an emergency supplemental budget earlier in the week. It also requires them to come together quickly to fund the remaining items in a “part 2” budget document.
The following major pieces of the supplemental and biennial budget proposals are included in the new document, LD 609:
- The baseline budget, including funding to continue education at 55% and revenue sharing at 5% for the full biennium
- Baseline MaineCare funding at current levels through fiscal year 2027, plus additional funding for increased MaineCare enrollment and costs in fiscal year 2025 and 2026
- Adjustments to account for lower federal matching rates in MaineCare in 2026 and 2027
- Funding for a 1.95% cost of living increase to MaineCare providers, which will likely be in effect in April (less than the 3.5% effective January 1 required by state law)
- Funding to cover additional enrollment in the free community college program for FY 2025 only
- Full revenue sharing to towns at 5% of income and sales tax revenues over the biennium
- Increasing the state employee attrition rate from 1.6% to 5%, which produces savings from filling fewer state positions as employees quit or retire
- Funding for spruce budworm prevention
- Disaster funding for last year’s winter storms
- Addressing the lower revenues in the Fund for Healthy Maine. Rather than the Governor’s suggestion of moving initiatives from FHM to the General Fund, the committee chose to move funding from the GF to the FHM
- A number of position reclassifications for state employees
Several items that were proposed by the Governor were not included in the revised bill and will likely be revised before June 30:
- Additional MaineCare costs above the baseline for fiscal year 2027
- Continuing free community college into the next biennium
- Additional funding for public higher education institutions
- The Governor’s language to make future cost-of-living adjustments in MaineCare services dependent on appropriations is not included, but it also does not appear that the Committee included additional appropriations to account for statutory cost-of-living increases on January 1, 2026 and January 1, 2027
- Cuts to General Assistance housing support
- Cuts to food assistance (SNAP) for New Mainers with work authorization
- Increasing the nicotine tax
- Changing the structure of the cannabis taxes
- Applying the sales tax to online streaming services
- Phasing out the pension deduction for higher-earning households
- New taxes on prescriptions and ambulance services
- Cuts to child care worker supports and Head Start funding
The new document also does not include MaineCare reporting requirements which were initially in the supplemental budget at the request of Republicans.
The committee funded the bill despite the state’s budget deficit by using savings from the Education Stabilization Fund, interest from the American Rescue Plan, and leftover funds in various accounts. The delayed implementation of some programs, like extra MaineCare funding until 2027, also saved money.
Though the bill leaves $125 million available, the committee must find more revenue or approve the Governor’s proposed cuts to cover the items left unaddressed in LD 609, not to mention other bills under consideration by the legislature. To avoid tax increases on Mainers with lower income or program cuts, lawmakers should consider higher taxes on the wealthy.
Passing this budget prevents a government shutdown and ensures funding for essential services — including payments to health care providers, and partial cost-of-living adjustment for direct care workers — without cuts. Legislators should pass this bill as soon as possible so they can turn their attention to addressing the remaining unmet needs — and ensuring that wealthy Mainers pay their fair share to meet them.
