Jan. 10—AUGUSTA — Gov. Janet Mills unveiled a two-year state budget proposal Friday that packs an increased tax on cigarettes and maintains the state’s free community college program and other key initiatives.
The $11.63 billion proposal is up 10% from the current $10.5 billion budget, although Mills is also bringing forward a $94 million proposal to increase the current budget to $10.6 billion.
The budget for the next two years would raise the excise tax on cigarettes from $2 per pack to $3 and make similar adjustments to the tax on other tobacco products, resulting in about $80 million in new revenue over the biennium.
It would maintain key Mills administration initiatives such as funding 55% of education, providing free school meals for all Maine students and contributing 5% to municipal revenue sharing.
There are no broad-based tax changes, such as increases to Maine’s income or sales taxes, and the proposal does not relying on drawing money from Maine’s budget stabilization fund.
The budget does not create or fund any new programs, Mills’ office said Friday, but it does include $25 million to continue funding the governor’s free community college program.
It includes a number of programmatic changes in the Department of Health and Human Services, including reductions in eligibility for food assistance for non-citizens, suspending plans for an expansion of mental health crisis receiving centers in Kennebec and Aroostook counties and reducing stipends for childcare workers to 2022 levels.
“This was a difficult budget to put together,” Mills said in a written statement. “Our economy is strong, but our revenues are leveling off, and while prior legislatures have made many important and worthwhile investments, we have to consider what we can sustain this budget cycle.
“With this proposal, we have taken a balanced approach — one that includes investments to maintain core programs, like education funding and healthcare; that raises revenues in a targeted way to benefit public health; and that makes difficult programmatic changes to save money. There are tough decisions to be made in the coming weeks, but I know the Legislature shares my commitment to enact a balanced budget that is good for both Maine people and the fiscal health of our state.”
The governor is expected to discuss the proposal at a 1 p.m. press conference.
The Legislature will take up the proposal, and amend it, in the coming weeks and months. Mills’ administration has warned lawmakers that spending would need to be kept in check in the next budget given a projected $450 million deficit, plus an additional $118 million shortfall in the current year’s budget for MaineCare, the state’s Medicaid program.
This story will be updated.
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