Relief checks for most Mainers could hit mailboxes as early as June under the $1.2 billion off-year budget Gov. Janet Mills signed into law Wednesday.

“For many Maine people, especially hard-working, middle-class and low-income families, their budgets have been stretched thin. Today, we are all here to say: For you, help is on the way,” Mills said to a round of applause during a 15-minute signing ceremony in the Capitol’s Hall of Flags.

The Legislature passed the supplemental budget with broad bipartisan support on Tuesday. With Mills’ signature, the state Department of Administrative and Financial Services can start mailing relief checks as early as June. Eligible individuals will receive $850 and the average Maine household will get $1,700 in relief payments.

One-time relief checks will be mailed to about 858,000 Mainers. The Mills administration said mailing checks, rather than making direct deposits, is the more reliable way to distribute the funds and avoid errors. To be eligible, individuals must file a Maine individual tax return as a full-time resident by Oct. 31, 2022, not be claimed as a dependent on another’s tax return and have a federal adjusted gross income of less than $100,000 as individuals (or if married and filing separately), less than $150,000 as head of household or less than $200,000 for couples filing jointly.

Eligible residents who have filed 2021 tax returns do not have to sign up or take any additional action to make sure they receive the checks.

Anyone who is eligible but has not already filed a return must do so by October 31, 2022 to claim the $850 check. This could include people who are late in filing or people in a financial situation that does not require them to file, such as certain low-income social security recipients.

Social security recipients who have not filed a return can use the SSA-1099 tax form, which the federal government sent in January, to file a return. For free tax help, the state advises taxpayers of any age to visit www.cashmaine.org or call 211.

CHECKS PROVIDE FLEXIBILITY

Delivering relief in this way provides Maine people with the freedom to decide for themselves how best to use the money, whether it be for groceries, gas, heating fuel, electricity or other expenses, Mills said. The state economy is making a comeback, but not everyone is feeling it, she said.

“We may not be able, in this state, to control inflation or control the markets or worldwide supply chain disruptions, but we can make sure that Maine people have something, some help, to grapple with these rising costs,” Mills said. “Today, that is what we’re doing.”

Mills described the spending plan as a “straight-up, straight-talk budget” that is free of fiscal gimmicks, like borrowing money to underwrite spending, and reached through careful negotiation from all parties, without the rancor or bitter partisanship that has divided past Legislatures.

Maine is in the middle of a two-year budget cycle, which usually keeps the changes to the state spending plan to a minimum. But a projected surplus created by federal COVID-19 payments and increasing state tax revenues meant the Legislature had to decide how to use an additional $1.2 billion.

Mills included $500 givebacks in her original budget proposal, but that amount was increased over time, rising along with the official revenue forecasts to $750 and then $850. The income cap has gone up over time, too. Even the name has changed, from COVID-19 relief to disaster relief to inflation relief.

Republicans wanted to return all the surplus to residents through direct checks and tax cuts. In the final days of the Legislature’s budget negotiations, Republicans struck a deal to increase the eligibility cap for who gets a check from $75,000 to $100,000 for individuals and $150,000 to $200,000 for households.

LEPAGE SEES ‘ELECTION YEAR GIMMICK’

After Mills, a Democrat, signed the budget, former Republican Gov. Paul LePage said the relief program was “an election year gimmick” that Mills stole from the Republicans to win re-election to a second term. LePage is seeking a historic third non-consecutive term as Maine governor.

“To be competitive, we need a permanent cut in Maine’s income tax, not just a one-time payment,” LePage said in a written statement Wednesday. “Why can’t we allow the Maine people to enjoy savings every year, year-in and year-out, rather than a one-time payment funded from Washington?”

The $729.3 million in checks – which represents about 60 percent of the spending plan – was the highest-profile component of the budget, but it’s not the only thing that Mills singled out during the bill signing.

The budget increases how much retirement pension a full-time Maine resident can exempt from income tax, from $10,000 to $25,000 in 2022, to $30,000 in 2023 and $35,000 in 2024 and future years. This will provide $36.8 million in retiree tax relief next year, with the average retiree saving $560 in 2022.

The administration estimates about 76,000 tax filers will qualify for this retiree tax exemption.

The budget includes $7 million to increase the maximum benefit of the Property Tax Fairness Credit for those 100,000 low- and middle-income property owners and renters who spend more than 4 percent of what they make on property taxes or rents to $1,000 a year. Seniors will get a $1,500 credit.

It sets aside $27.6 million to increase the value of the Earned Income Tax Credit to help about 100,000 Mainers who earn less than $57,414, increasing the maximum benefit by an average of $400 per family for a total average benefit of $764 a year.

The budget spends $104.8 million to increase retirement benefits for the 37,000 former state employees and teachers to improve their cost-of-living adjustment to 4 percent dating to September 2021, and increase the base on which future annual adjustments will be calculated.

This spending plan maintains the Budget Stabilization Fund, or so-called rainy day fund, at its record high of $492 million, earmarks $100 million to repair state roads and bridges, and devotes $22 million on emergency housing relief to provide rental assistance to curb homelessness.

FUNDING FOR EDUCATION, CHILD WELFARE, ENVIRONMENT

On the education front, the budget maintains the state commitment to fund public schools at 55 percent, spends $20 million to provide two free years of community college for recently graduated high schoolers, pays for universal free student lunches, and provides up to $25,000 in lifetime student loan debt relief.

The budget includes more than $10 million to improve Maine’s struggling child welfare system, such as hiring more child protective staff and implementing recommendations of the child welfare ombudsman, independent auditors, the Maine Child Welfare Advisory Panel and Maine lawmakers.

On the environment front, the budget creates a $60 million fund to help farmers address contamination caused by forever chemicals, or PFAS, left behind by decades of fertilizing their fields with state-licensed sludge. It includes $9.3 million for mitigation and building in-state lab testing capacity.

This brings the total PFAS mitigation investment for Maine to $106.4 million in the past two years.

The Legislature has another $12 million in what is called “table money” to fund some of the 200 bills on the special appropriations table controlled by the Appropriations and Financial Affairs Committee. The committee will meet Friday to decide which of these bills it will recommend funding.

The House and Senate will consider those funding recommendations on Monday, when it will meet for what likely will be the final time this legislative session.

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