A plan for spending close to $1 billion in federal COVID-19 relief funds on a broad swath of infrastructure, child care, job training and business recovery programs was approved late Wednesday by the Legislature’s budget-writing committee.

The 8-4 vote by the Appropriations and Financial Affairs Committee leaves largely intact the proposal Gov. Janet Mills laid out this spring for using federal American Rescue Plan Act funds.

Mills applauded the committee’s work Thursday morning but urged the panel to negotiate a compromise bill that could gain bipartisan support by at least two-thirds of the Legislature when it convenes Monday.

If the bill passes by a two-thirds margin, the funds could be distributed immediately. Passage by a smaller margin would mean the bill wouldn’t take effect until 90 days after the legislative session ends.

“If we allow three more months to pass simply because we couldn’t find consensus, then that could mean the difference between a business surviving or failing, between a parent being able to afford child care so they can go back to work or not, between expanding broadband to rural communities or not,” Mills said. “The stakes are high. The implications are real.”

The legislation would send large amounts of funding to a range of programs, government agencies, public colleges and businesses. It includes large boosts for student loan repayment grants for health care professionals, while also focusing on infrastructure improvements, especially broadband internet expansion for rural and other underserved communities in Maine.

Democratic legislative leaders heralded the funding and the plan as a “once-in-a-lifetime investment in working Maine families, businesses and communities.”

In May, Mills, a Democrat, unveiled her plan for Maine’s share of the ARPA funding, the uses of which are constrained by the federal law, at an event in Madison.

Sen. Cathy Breen, D-Falmouth, Senate chair of the budget committee, said the bill, L.D. 1733, will not only help Maine recover from the pandemic but also will position the state to thrive in the years ahead.

“Investments in people, workforce development, child care, health care and infrastructure for new and legacy home-grown industries offer enormous opportunities for growth,” Breen said. “And those opportunities will be shared in a more equitable and sustainable way than ever before.”

The House chair of the committee, Rep. Teresa Pierce, D-Falmouth, described the bill as a transformational investment in the state’s economy, as well as a response to the devastation wrought by the pandemic.

“Through this bill, Maine will build hundreds of units of affordable housing, address homelessness, support and champion our community colleges and public universities, and make sure our workforce has the tools they need to succeed through Maine’s economic recovery and beyond,” she said.

Highlights of the measure include grants for child care and education; economic recovery and job training programs for businesses; investments in broadband, affordable housing and energy efficiency; and allocations to the state park system and land conservation.

While minority Republicans on the budget-writing committee voted in opposition to the bill on Tuesday, their version of the spending plan, advanced in a minority report, mostly keeps Mills’ funding recommendations intact.

Rep. Sawin Millett, R-Waterford, his party’s leading House committee member, said his caucus did not necessarily disagree on the priorities of the bill but were hesitant to use the one-time federal funds to create ongoing state government spending.

Millett, who has served as the state’s finance commissioner under three different governors, also described some of the new spending as having “long tails,” meaning future Legislatures could struggle to find funding for the programs.

In their plan, Republicans also earmark more money for the businesses sector, putting about $5 million more toward economic recovery grants for businesses hardest hit by the pandemic.

Republicans also would direct a $5.5 million grant to the Efficiency Maine Trust for an energy upgrade at the Duvaltex mill in Guilford. Sen. Paul Davis, R-Sangerville, said he had been working with the Mills administration on the issue.

Republicans and Democrats are at odds over about $20 million in funding that’s part of $50 million earmarked for affordable housing. The bill, as passed by the committee, would require the use of union labor on projects that account for $20 million of the funds. Republicans have opposed that.

During a news conference Thursday, Breen said the committee’s vote on the bill was final and any changes would have to be done by amendments from the floors of the House and Senate on Monday.

Breen noted that the bill also included an $80 million replenishment to the state’s unemployment trust fund, which is used to pay unemployment benefits. That funding was being put in place, she said, to hold businesses harmless from the enhanced unemployment benefits paid to laid off workers during COVID-19. Otherwise they could see rate increases.

“It’s remarkable to me that Republicans would be voting against that,” Breen said. She also said passing the bill on a simple majority was still an option for Democrats.

If the bill passes with less than a two-thirds margin, Mills would have several options. She could veto the bill and force an override vote and a possible renegotiation of the measure. She could allow the bill to become law without her signature. She could sign the bill into law, or she could line-item veto parts of the bill she disagrees with.

Pierce, the Falmouth lawmaker, urged her colleagues to focus on the vast majority of the $983 million spending plan that Republicans and Democrats agree on.

“I hope that we will get to a point where we can really highlight the many, many other things that are going on in this bill that are really going to directly help our businesses that are still trying to recover from the pandemic, catapult us forward for economic growth of our workforce and rebuild our infrastructure,” Pierce said.

Congress is providing $350 billion in emergency funding nationwide for eligible state, local, territorial and tribal governments to respond to COVID-19. Approximately $4.5 billion flowed to Maine, with $3.2 billion directed to various recovery efforts, including support for COVID-19 testing and vaccinations, enhanced unemployment benefits, stimulus payments to families, and funds for businesses, county government, municipalities, education, behavioral health, child care, and more.

The remaining $983 million in Maine was allocated to the state government for pandemic response and economic recovery programs.

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