Senate bill would deliver more than $2 billion to state and local governments in Maine

A bipartisan federal aid bill co-sponsored by U.S. Sen. Susan Collins would provide more than $2 billion to state, county and municipal governments in Maine for coronavirus relief.

The Senate bill would allocate a minimum of $2 billion to each U.S. state and territory, with larger states receiving much more, based on population, COVID-19 infection rates and lost revenue projections, according to a news release issued Monday by Collins’ office.

The State and Municipal Assistance for Recovery and Transition Act, or SMART Act, would provide a total of $500 billion in emergency funding to every state, county and community in the country, while prioritizing assistance to the areas with the greatest need, according to the release.

U.S. Sens. Bob Menendez, D-New Jersey; Bill Cassidy, R-Louisiana; Joe Manchin, D-West Virginia; Cory Booker, D-New Jersey, and Cindy Hyde Smith, R-Mississippi, introduced the bill Monday along with Collins, R-Maine.

Maine would receive at least $2 billion from the SMART Act, with at least $1.33 billion going to state government, $333 million going to counties and $333 million going to local governments, the release said. In addition, the $1.25 billion already allocated to Maine through the CARES Act, enacted in late March, would be made more flexible, including being eligible to address revenue shortfalls under the SMART Act.

“In addition to its tragic health effects, COVID-19 has devastated communities and slammed Maine’s economy. The impact on Maine’s revenues could be among the worst in the nation,” Collins said in the release. “Dramatic revenue shortfalls will force state and local governments to either increase taxes or slash or suspend important services in health care, education and transportation construction, which are needed now more than ever in the midst of this crisis. The SMART Act would help avoid the worst of these consequences by providing Maine’s state and local governments with flexible funding that can be used to directly offset some of their plummeting revenues.”

A competing, $3 trillion bill passed by Democrats in the U.S. House of Representatives last week would deliver almost $1 trillion for state and local governments, another round of $1,200 direct payments to individuals and help for the unemployed, renters and homeowners, college debt holders and the struggling U.S. Postal Service.

However, leaders in the Republican-controlled Senate have vowed not to support the Democrats’ bill, and President Trump has threatened to veto the bill if it passes both houses.

Gov. Janet Mills issued a statement Monday saying she had participated in a video conference with all four members of Maine’s congressional delegation, in which she specifically discussed the need for federal aid to state and local governments. Mills said she also sent a letter recently to delegation members outlining the impact that COVID-19 is expected to have on state and local government, and the services they provide to residents.

“I am grateful to have a close working relationship with Maine’s Congressional delegation and am thankful for their ongoing efforts to support the state through their work in Congress,” Mills said in the statement. “Today, we discussed the need for additional direct federal support to State and local governments, as well as flexibility for the funding already authorized. My administration worked with the Legislature to take steps to safeguard Maine’s economy, but with all states facing reductions in revenue as a result of this virus, a strong federal partnership will help Maine continue to protect public health and safety and spearhead an economic recovery.”

Maine is expected to face a state budget crisis as a result of the coronavirus pandemic that will likely be deeper than any it has seen in decades.

Maine’s current two-year budget stands close to $8 billion and was signed by Mills in June 2019. The first year of that budget ends on June 30. And while policymakers believe the state has enough revenue and reserves to cover the current fiscal year, funding for the next fiscal year remains uncertain. Mills and the Legislature will have to contemplate a supplemental budget or adjust spending based on tax receipts and other sources of revenue that haven’t yet been reported.

A risk model produced by Oxford Economics, a global economic forecasting and analysis firm, places Maine at the top of the list for economic vulnerability among U.S. states. That analysis is based on Maine’s high percentage of small businesses, large elderly population and dependence on tourism and retail activity, among other factors.