Maine budget strikes bipartisan tone

Maine adopted its $7.98 billion two-year budget Monday, well before deadline, and avoided the political infighting that delayed the state’s previous spending plan.

Gov. Janet Mills signed Maine’s fiscal year 2020-2021 biennial budget after it received bipartisan legislative support from two-thirds of state senate and house members. The two-year budget was finalized with two weeks to go in the legislative session without the partisan battle that in 2017 caused the state’s first government shutdown since 1991 under previous Gov. LePage.

“I am proud of all the work that lawmakers on both sides of the aisle have put into this, and I am proud of the bipartisan agreement we achieved,” Mills said before signing the budget. “I appreciate the work that members on both sides of the aisle have put into this process, and I believe, through it, we have returned to an air of civility and bipartisan agreement that has been lacking in the past.”

The final budget is smaller than the $8.04 billion spending plan Mills first pitched in February, which the Democratic governor said would be supported by existing tax revenues. Republican lawmakers raised objections, saying the spending plan was “unsustainable” because it didn’t take into account revenue scenarios under a potential economic downturn.

The budget provides $125 million for voter-approved Medicaid expansion, down from the $147 million Mills initially proposed over the next two years. Mills, a former Maine attorney general, began implementing the expansion to an estimated 70,000 people soon after assuming office. LePage had stalled the law during his last year as governor. Mills said the budgeted amount for the program will be matched with nearly $700 million in federal funds.

Mills’ first budget represents an 11% increase from Maine's $7.1 billion two-year spending plan approved in July 2017, three days into the fiscal year, after LePage fought with legislative Democrats over their proposal to increase the state's hotel and motel lodging sales tax. The final budget also adds $19 million into the state’s rainy day fund.

The legislature is slated to recommend a bond package to go before voters this November for funding improvements to infrastructure, broadband service and tackling the state’s labor shortage. Mills recommended a $239 million bond proposal on June 5 that would feature $189 million on the November ballot with the other $50 million getting decided in 2020.

Moody's Investors Service and S&P Global Ratings both affirmed Maine's general obligation bonds in May at Aa2 and AA, respectively, with stable outlooks.