Maine state agencies will soon send layoff notices to roughly 2,500 employees if the federal shutdown drags on and the future of federal funding remains unclear, Maine’s commissioner of administration and financial services told lawmakers Friday.

The shutdown and continuing uncertainty over President Donald Trump’s spending plan could impact hundreds of state positions that are federally funded, Commissioner Kirsten Figueroa said in a meeting with the Appropriations and Financial Affairs Committee.

However, because layoffs would be done according to seniority, federally funded employees could bump less senior workers whose jobs are state funded, Figueroa said. Maine has about 13,000 state government employees.

Figueroa expressed concern for state workers who might be affected, but she said state officials are planning ahead because information coming from Washington on which federal programs may be reimbursed for the shutdown is changing day to day.

“We can’t promise things that there’s not funding to do,” she said.

Exactly when layoffs would begin is unclear. Money for federally funded positions will last through Oct. 31, she said, and layoff notices would let workers know they have 10 days left on the job.

Legislators pressed Figueroa for details on which departments and programs might be affected.

“The longer this goes on, the worse it gets,” said Rep. Drew Gattine, D-Westbrook, the House committee chair.

Figueroa said the impacts have yet to be fully assessed but would be broad, including a variety of grants, contracts, jobs and programs.

“It really is everything,” she said.

UNION LEADERS RESPOND

Employee union representatives responded to Figueroa’s announcement with frustration and disgust that the shutdown, which reached 17 days Friday, continues to threaten dedicated public servants.

“This whole situation is disgusting,” said Mark Brunton, president of the Maine Service Employees Association SEIU Local 1989. “Our workers feel as though they’re pawns in a game of chicken that Congress is playing.”

Brunton said the union is exploring all options to minimize any impacts to its members and keeping the lines of communication open with Gov. Janet Mills’ administration.

“Enough is enough,” said Andy O’Brien, spokesman for the Maine AFL-CIO, in an emailed statement to the Press Herald. “It’s time for President Trump to uphold the rule of law and negotiate a deal to end the shutdown that restores health care subsidies for working families and prevents a serious financial crisis for our rural hospitals.”

O’Brien noted that a new law allows state and federal employees affected by the government shutdown and layoffs to apply for no-interest loans available through their financial institution and the Finance Authority of Maine.

Figueroa spoke during a daylong update on state and local impacts of the shutdown and Trump’s federal budget cuts and tax policy changes. The appropriations committee also held joint meetings with the Taxation and Health and Human Services committees.

“Maine, as is the case for all states, is currently evaluating the dramatic human and fiscal impacts of this act,” Figueroa said at the outset of the hearings.

TAX FILING IMPLICATIONS

Maine Revenue Services staff warned that state taxpayers may want to delay filing their 2025 tax returns next year because legislators likely will be deciding how or whether to conform with new federal tax laws in early 2026. The Legislature is currently not in session and will resume deliberations in January.

As a result, because decisions made next year may require last-minute changes in state tax forms, taxpayers who file early may have to file amended returns, said Michael Allen, associate commissioner for tax policy.

Sen. Bruce Bickford, R-Auburn, and Rep. Amy Arata, R-New Gloucester, questioned why it was taking so long to align federal and state tax rules. Republican committee members called for a public hearing in November to consider adopting federal tax changes they say would help Mainers.

“The public should be given a chance to voice their opinions on how eliminating state taxes on overtime and tips, increasing the standard deduction and allowing car loan interest deductions would impact their daily lives,” they said in a written statement.

Figueroa noted that the president signed his 10,000-page spending plan on July 4, calling for major retroactive cuts when Maine’s current budget was already in effect.

“It wasn’t something we were going to go through easily,” she said.

She further noted the continuing uncertainty over the status of those cuts given the shutdown.

Daniel D’Alessandro, deputy tax policy counsel, explained that there have always been areas where Maine doesn’t conform with federal tax law.

“We are currently out of compliance,” he said. “We are routinely in this position.”

Health and Human Services Commissioner Sara Gagné-Holmes also led her staff in updating legislators on the pending impact of the shutdown and budget cuts on MaineCare, SNAP benefits and CoverME.gov, the state’s health insurance marketplace.