In the wee hours of Friday morning, the group of Maine lawmakers tasked with overseeing the state budget unanimously approved a plan to give back more than half of a $1.2 billion revenue surplus to residents through one-time $850 relief checks.

The Appropriations and Financial Affairs Committee voted to keep the $850 checks that Gov. Janet Mills included in her proposed supplemental budget, but decided to spread the state’s wealth a little farther than Mills proposed by raising the income limits on who is eligible to get one.

Mills’ budget proposal caps annual income eligibility at $75,000 a year for individuals and $150,000 a year for households, making about 800,000 Mainers eligible for a check. The committee caps of $100,000 for individuals and $200,000 for households would make another 75,000 Mainers eligible.

The amount of returned surplus would grow from Mills’ $682 million to the committee’s $729 million.

“I’m proud that our committee was able to reach a unanimous, bipartisan report on the supplemental budget,” Rep. Teresa Pierce, D-Falmouth, the committee chair, said in a late-night statement. “Our shared goal was to ensure direct relief will get to Maine people quickly.”

THRESHOLD RAISED

Republicans were especially happy to see the committee’s decision to make another tax bracket’s worth of people eligible for direct checks, which they characterize as refunding taxpayer overpayments rather than disaster relief, COVID 19-relief or inflation relief, all terms used by Democrats.

“We’re very hopeful it can survive upstairs (in the governor’s office) and allow the issuance of payments electronically to the extent it’s possible and as soon as practicable to a whole variety of people,” said Rep. Sawin Millett, R-Waterford, a committee member and former state finance commissioner.

The committee bill now goes to the revisor’s office to be printed over the weekend and distributed to the party caucuses by Monday, when the House is expected to begin its budget debate. It can vote the bill up or down as is, or make amendments. Once approved, the bill goes to the Senate for consideration.

The budget bill can pass back and forth as many times as necessary until both chambers agree on a bill they can send to Mills. Lawmakers are still considering some bills with significant price tags attached that could require last-minute amendments to the budget bill. The session is slated to end Wednesday.

Progressives like Sen. Ben Chipman, D-Portland, are disappointed by the committee’s decision to increase the eligibility cap. He’s not against relief payments, but argues the newly added group of people just don’t need a $1,700 check from the state to make ends meet.

“I am disappointed that the proposed relief payments are not more targeted to those truly in need,” Chipman said Friday night. “Year after year we are told that we do not have the funding to address … important issues. Now we finally have a revenue surplus and for some reason it is a top priority in Augusta to send out checks.”

The $47 million in state surplus needed to send checks to higher-income Mainers would be better spent on investments in Maine’s future, such as providing affordable housing or substance use and mental health services, said Chipman, who is co-chair of the taxation committee.

However, bleary-eyed members of the appropriations committee from both parties said they were happy with the unanimous support.

“The (committee) came up with a strong, responsible and bipartisan plan that delivers for our state,” said Sen. Cathy Breen, D-Falmouth, the committee co-chair. “This is what Maine people expect from their government – collaboration and common sense.”

House Minority Leader Kathleen Dillingham, R-Oxford, was one of several legislative leaders who observed the Thursday-into-Friday budget meeting in person. She said a unanimous budget bill is hard to achieve, even when the budget is a supplement to a two-year spending plan.

“I’m pleased it’s a unanimous report,” said Rep. Patrick Corey, R-Windham, who sat on the committee. “When 13 people can sit at a table and compromise and get to that kind of report, that’s definitely good for everyone under the dome and it’s certainly good for our constituents.”

OTHER PRIORITIES ALSO FUNDED

The committee’s supplemental budget was about more than just direct checks, of course.

“We wanted to be sure the big issues facing Mainers right now, including PFAS and the need for housing and behavioral health care are addressed immediately,” Pierce said. “This funding will be deployed for property tax relief and protecting Maine children as well as student debt relief.”

The committee budget bill also increases the earned income tax credit to help 100,000 Maine families amid rising costs, permanently expands the property tax fairness credit for eligible working families and older Mainers, and continues to fund public K-12 education at 55 percent and free student meals.

It keeps almost all of Mills’ budget cornerstones, including a proposal to fund two years of community college for students graduating high school from 2020-23 and freezing in-state tuition for all four-year students in the University of Maine system.

But not everything is as Mills had wanted. The committee bill would keep Maine’s budget stabilization fund, the so-called rainy day fund, at about $492 million, which is the highest on record but still less than what Mills had proposed.

The moment the check proposal was added to the budget bill even offered a bit of late-night comic relief.

“And this is for sure one-time?” Breen asked the committee, referring to the $729 million expenditure. Committee members wanted assurance that the taxpayer refunds would not be a recurring expense that would have to be paid out in future budgets.

Amidst the laughter, Millett replied: “Oh yes! Oh yes!”

The direct checks have been the most high-profile element of the supplemental budget plan.

Mills has increased the amount of the check from $500 to $750 to $850 as the estimated budget surplus has gone up and inflationary pressures have mounted. Republicans have at times sought to return up to 75 percent of the surplus to Mainers and at other times pushed for sweeping tax cuts instead.

Dillingham said she was really happy the committee agreed to raise the income threshold for the direct checks and still receive unanimous committee support. With inflation hitting everyone hard, a family of five earning between $150,000 to $200,000 a year does not feel rich, she said.

“Caps are always hard,” Dillingham said. “Everyone’s situation is so different. Who am I to judge whose pain is most worthy? We want to help the people who really need it, but we want to help as many people as we can, too. At the end of the day, with this budget, everyone is going to see some help.”

PROGRESSIVES OPPOSED

The progressive wing of the Maine Democratic Party has been calling for income caps on inflation relief payments to go down, not up. Groups like the Maine Center for Economic Policy want to use more of the surplus to repair the social safety net that fell apart under former Gov. Paul LePage.

“A fair state budget is vital to lifting up Maine people and communities,” MECEP President Garrett Martin said in a written statement. “By supporting our neighbors struggling the most and making important investments in our communities, all Maine people are lifted by these policies.”

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