Gov. Janet Mills is urging fiscal restraint ahead of upcoming budget negotiations, despite a strong economy and an expected $139 million surplus this fiscal year.

Mills is proposing to “set aside” $100 million to continue funding programs already approved by the Legislature, while investing an additional $16 million in warming centers for people without homes. She also plans to budget more for the state’s beleaguered child welfare system, opioid response and public education.

And she said her administration will unveil a plan in the coming weeks to ensure that pre-kindergarten children with disabilities can receive “free, appropriate” education in public schools, rather than through the existing system, which was established 35 years ago and is not meeting the current need.

“I recognize there are many needs across the state, and I know, in the past, we have been able to say yes to a lot of things. However, this year is, and must be, different,” Mills said in a written statement. “If we do not budget responsibly now, the Legislature will be forced to make painful cuts in the future – just like other states are having to do now.”

The details of the governor’s supplemental budget will not be available for several days and will likely undergo changes as lawmakers review the proposal and consider their own priorities.

House Republicans, meanwhile, didn’t address Mills’ proposals during a news conference ahead of her evening address. House Minority Leader Billy Bob Faulkingham, R-Winter Harbor, said he hadn’t had time to review the budget proposals that Mills’ outlined in a letter to lawmakers Tuesday morning.

Instead, Faulkingham leaned into criticism of other proposals by Democrats that Republican leaders have highlighted in recent weeks as they seek to gain traction with voters in hopes of delivering a Republican controlled Legislature in November.

Those proposals include a proposed mandate for electric vehicles; plans to provide two years of free housing to asylum seekers, who are legally present in the U.S. but unable to work for at least six months after filing their asylum applications; and bill that died in committee that would have safeguarded gender-affirming care for out-of-state minors who are unable to receive that care in their home states.

“These are all things that concern me,” Faulkingham said. “What I want to hear tonight is for (Mills) to publicly call on the Board of Environmental Protection to abandon their effort to mandate electric cars.”

“I want the governor to lower the tax and regulatory burden on Maine people,” he continued. “I want the governor to lower electric rates by reversing the flow of money to out-of-state solar and wind companies.”

An administration spokesperson, when asked whether Mills considered cutting taxes or issuing another round of rebate checks, said that’s always a consideration and pointed to Mills’ written remarks about projected revenues leveling off over the next few years, urging “caution and foresight” to prevent future cuts.

Left-leaning advocacy groups like the Maine People’s Alliance and the Maine Center for Economic Policy called on lawmakers to invest the $100 million earmarked for savings into needed programs and services, including rental assistance and increasing the minimum wage.

The letter Mills sent Tuesday morning outlining her upcoming budget proposals is part of her self-described “novel” approach to this year’s State of the State address, because of the challenging last few months of storms and violence in the state.

Mills is taking a cautious approach to the budget, even though nonpartisan revenue forecasters predict the state will have an additional $265 million in revenue over the next two years, including $139 million this year. Other states, including Massachusetts, New York and California, are facing shortfalls.

The state’s budget stabilization, or rainy day, fund is currently at $968 million, its statutory limit of 18% of General Fund revenue, so Mills plans to set aside $100 million by creating a temporary reserve account, a spokesman said.

In the past, Mills has created several stabilization accounts for specific programs, such as for MaineCare expansion and the state funding for public education, which has been increased to the 55% for the first time under her administration. She said an additional $22.6 million is needed to maintain the state’s public education funding level.

FOCUS ON CHILD WELFARE 

Mills hopes to address staffing shortages and unmanageable workloads among child welfare staff by increasing pay and adding new targeted positions, such as legal aides to help caseworkers prepare for court hearings, and trainers to help new employees enter what is a complex and emotionally charged profession.

“Caseworkers report they feel overworked, overburdened and unsupported. I hear them,” she said. “It is clear to me that filling vacancies and taking action to help caseworkers manage their existing caseloads must be a top priority.”

Mills announced that the Department of Education is expected to unveil a plan to educate pre-K students with disabilities in public schools, rather than the 35-year-old system in which the department has a contract with a quasi-governmental agency, which then seeks educational pre-K opportunities in the community.

The current system “just isn’t working for Maine kids,” she said. “We can, and we must, do better. Every other state in the nation educates pre-K children with disabilities through their public school systems. Maine should do the same. It will take work and it will take time – but, fundamentally, it will be better for Maine children.”

Mills said her budget will include a cost-of-living adjustment for behavioral health providers and “an overhaul of nursing facility rates to ensure they can attract and retain workers to provide stable, high-quality services to Maine people.”

Mark Brunton, president of the Maine Service Employees Union, which represents 13,000 state workers, commended the investments in child and family services but called on Mills to make similar investments in other areas of state government, including Child Development Services, which Brunton said is struggling to fill for more than 2,100 state jobs because of low pay.

“The governor’s address this morning rightly named many of the critical issues facing the people of Maine,” Brunton said in a written statement. “In light of these challenges, it’s disappointing to see the administration’s plan to squirrel away $100 million in General Fund revenues, especially given that Maine’s rainy day fund is already maxed out at nearly $1 billion.”

MONEY FOR DRUG CRISIS

To address the state’s overdose crisis, Mills is proposing a $4 million investment to increase medication assisted treatment programs in county jails, $1.25 million to increase the availability of the overdose reversal drug naloxone and adding nine recovery coaches through the state’s OPTIONS program, which sends people who have lived experience with addiction on overdose calls with first responders to help people into treatment.

The state also is making progress to establish substance use prevention programs in all schools by 2026, she said. Last year, Maine experienced a 16% drop in deadly overdoses – the first decline in five years.

“This welcome news should bring us all a sense of relief, but our cautious optimism shouldn’t become complacency,” she said. “Every life lost to a fatal overdose is one too many.”

Mills also is proposing a $26 million investment in emergency and permanent housing, including an additional $16 million to the Emergency Housing Relief Fund to support warming shelters, long-term shelters and transitional housing programs. That would add to the $55 million that already has been dedicated to that fund, which Mills said has supported more than 75 housing programs and 7,000 people in need.

The other $10 million would go to the Affordable Homeownership program, with a goal of creating 130 affordable homes. The funding provides incentives for housing developers, with a similar investment leading to an additional 180 homes in the pipeline.

Mills said her budget continues to invest in Maine people, while making the state an attractive place to live, work and raise a family.

“We have made important progress towards making that dream a reality for everyone,” she said. “Let’s continue that progress this legislative session.”

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