Gov. Janet Mills gives State of the State address at the Maine State House in Augusta on Jan. 30, 2024. (Jim Neuger/Maine Morning Star)
This story will be updated.
Gov. Janet Mills proposed an approximately $11.6 billion biennial budget on Friday that maintains many of the state’s existing commitments to education and health care, reduces some health programs and raises revenue by increasing the cigarette excise tax.
Along with the 2026-27 spending proposal, Mills proposed a $94 million change package for the general fund on Friday to address the immediate Medicaid funding gap in the current year by using an unanticipated revenue boost the state saw after extended tax filing deadlines and other capital gains.
And, to complement a bipartisan bill already filed on Mills’ behalf, the governor also proposed $5 million for the Maine Emergency Management Agency to use for continued storm clean-up.
“This was a difficult budget to put together,” Mills shared in a statement on Friday. “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 in this budget cycle.”
Aside from the Medicaid shortfall this year, in the next biennium the state is facing a gap of $450 million between the revenue it anticipates taking in and how much it’s slated to spend, according to the latest projections from the Legislature’s Revenue Forecasting Committee in December.
Mills is looking to close the gap by raising revenue, making some cuts and using newly recognized revenue in the next biennium, her administration announced midday Friday, though they have yet to fully publish the budget plan.
Her plan proposes raising revenue through a $1 increase in Maine’s cigarette excise tax — from $2 per pack to $3 — and corresponding increases to the excise tax on other tobacco-related products.
She also wants to reduce some programs within the Department of Health and Human Services, including stipends for childcare workers and low-income food assistance programs, as well as halting the planned expansion of crisis centers in Kennebec and Aroostook counties after the mass shooting in Lewiston.
In other ways, Mills stuck to her vow to preserve the state’s existing commitments while meeting the gap.
Her budget plan maintains the state’s voter-mandated 55% share of public K-12 education costs and 5% of revenue sharing for municipalities, as well as provides free school meals to all Maine students. It also proposes continuing the state’s free community college program with a $25 million allocation.
While the budget plan doesn’t create new programs, it would provide additional funding for MaineCare, the state’s Medicaid program, and investments in child welfare, children’s behavioral health services, nursing facility rate reform, mobile crisis response and public safety.
“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,” Mills wrote. “I look forward to working with them to achieve that goal.”
SUPPORT: YOU MAKE OUR WORK POSSIBLE