Republican legislators are proposing to remove income caps from the governor’s planned $850 COVID Pandemic Relief Payments. This would make the richest 20 percent of Maine households, including millionaires, eligible and increase the cost of this $680 million program by an additional $102 million.
As my colleague, James Myall, highlighted last week, data show that households with low income are struggling most to keep up with daily expenses and manage inflated costs of energy, housing, and food, while wealthy households aren’t reporting difficulties. Nearly half of households with incomes less than $25,000 reported finding it somewhat or very difficult to meet expenses while less than one in 12 households with incomes over $100,000 reported any difficulty.
In addition to having greater resources at their disposal due to higher incomes, households with higher incomes have also suffered the least economically throughout the COVID-19 pandemic. These households are most likely to have remained gainfully employed throughout the pandemic as job losses have been concentrated in low-wage sectors. Nationally the top 20 percent of households by income own 86.9 percent of stocks, benefiting disproportionately from the recent record stock market gains and corporate profits.1 And the top 20 percent of households have banked significant savings since the start of the pandemic, increasing their savings by $2.8 trillion nationally, which represents two-thirds of all households savings accrued since the start of the pandemic.
Including these households in the pandemic relief payments would come at a great cost to important budget items being considered. Diverting an additional $102 million so the richest households get checks could come at the expense of essential programs directed toward supporting families and communities where higher costs have had an adverse effect on Maine’s economy, workforce, and family security.
Some of the supports and services under funding consideration by the legislature include:
- $22 million for emergency housing to help families experiencing homelessness or those at risk of homelessness find stable housing
- $12 million to supplement wages for Maine’s child care workforce, which is struggling to retain workers even as parents are paying high costs for care
- $20 million investment in free community college for Maine’s high school graduates
- $6 million to expand MaineCare coverage for more children
- $1 million to help more Mainers gain access to heating assistance through LIHEAP
- $146 million to prevent retired state employees and teachers from losing ground to inflation
These programs and many more being considered that would strengthen Maine’s workforce and provide greater stability for Maine families and retirees in the face of rising costs will be put at risk if a $170 million payment to Maine’s richest households becomes the budget priority. As lawmakers consider how to spend Maine’s $1.2 billion in surplus revenues, they should choose to prioritize programs that improve worker pay and help lower costs for families and businesses. This choice would justify pulling back on the governor’s proposed $680 million payment program and totally rule out payment to the wealthiest households as Republicans have proposed.
Notes:
[1] Federal Reserve. Distributional Financial Accounts. Distribution of Household Wealth in the U.S. since 1989. Accessed April 6, 2022.
