Gov. Janet Mills on Friday unveiled an $8.4 billion, two-year budget that doesn’t raise tax rates and adds to the state’s “rainy day” fund despite a revenue shortfall from the COVID-19 pandemic.

“There’s no drama to this budget,” Mills said during a news conference Friday to provide an overview of the spending plan. “These proposals do not change tax rates, do not create new programs.”

The 2022-23 biennium budget and a supplemental budget for the current year would add $61 million to the rainy day fund which, if approved, would boost the fund to a record $320 million.

The budget treads water at a time when the country is in the midst of a pandemic and  transitioning from the Trump administration to the Biden administration on Jan. 20.

While the budget is mostly flat, it includes rate increases for Medicaid, devoting $45 million to nursing facilities and services for adults with intellectual and developmental disabilities, among other rate increases. Jeanne Lambrew, Maine’s health and human services commissioner, said that the rate increases keep up with federal requirements and minimum wage increases. The budget also includes $7.5 million for mental health and substance use disorder services.

A supplemental budget for the current fiscal year devotes $5 million to the Maine Center for Disease Control and Prevention for COVID-19 testing, vaccines, and people who need to stay in quarantine and isolation. Also in the supplemental budget is $1.8 million to expand broadband internet services into rural areas.

The education budget would include $45 million to “make progress” toward a minimum teacher salary of $40,000 and funds to help school districts manage services during the pandemic. The minimum salary for 2021-22 would be $37,500 and $40,000 for 2022-23.

The current two-year, $8 billion Maine budget is set to expire on June 30. Kirsten Figueroa, commissioner of the Department of Administrative and Financial Services, said state government finances were in the black last month because a number of measures and federal help “kept our ship steady amid the stormy seas of the pandemic.”

Revenue losses were not as severe as expected, and early financial support from Congress for state government and individuals softened the impact of the virus on the state’s finances, Figueroa said. A curtailment order by Mills – which included a hiring freeze for nonessential workers and having most government employees work from home – led to a $222 million savings.

“We were able to book those savings and carry them forward,” Mills said.

The federal government sent Maine $7.6 billion in relief funds, of which $4.6 billion went to relief for businesses or enhanced unemployment benefits.

“We will be able to cover the COVID-19 related revenue shortfall for this fiscal year and cover the projected revenue shortfall for the upcoming biennium while maintaining critical services and access to those critical services that Mainers need now more than ever,” Figueroa said.

Senate President Troy Jackson said in a statement that the “next budget is key to our success.”

“The stakes are high, but we plan to deliver for the people of Maine,” Jackson said.

House Speaker Ryan Fecteau said that House Democrats will “remain focused on increasing access to health care, ensuring our schools are adequately funded, making smart investments in broadband infrastructure and lowering property taxes.”

Jacob Posik, spokesman for the Maine Policy Institute, a conservative research group, said the institute will be evaluating the details of the budget in the coming weeks.

“Maine Policy Institute is encouraged to see Gov. Mills is not relying on new tax increases to overcome the economic slump caused by the pandemic and her administration’s response to it. Continuing to add to the rainy day fund and prioritizing new public health spending for the truly needy are wise decisions during the pandemic. How exactly the governor keeps everything balanced won’t be clear until the full budget document is released for public consumption.”

The spending plan was posted to the Bureau of the Budget website later Friday.

Garrett Martin, executive director of the left-leaning Maine Center for Economic Policy think tank, said the budget is a “strong foundation” for lawmakers.

“By protecting jobs and core government services, Gov. Mills’ budget proposal would prevent additional layoffs and avoid increased hardship,” Martin said in a statement.

Tom Desjardin, spokesman for Maine Senate Republicans, said party leaders are holding off on commenting until seeing details of the budget.

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