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AUGUSTA, Maine — Maine lawmakers are pushing for more involvement in the state’s coronavirus response as top officials consider how to use federal money to backfill expenses while preparing for a projected budget shortfall of half a billion dollars.
Maine could lose up to $525 million in revenue by mid-2021 in the coronavirus-related economic slowdown, Maine Department of Administrative and Financial Services Commissioner Kirsten Figueroa told the committee. The projection is staggering but not as high as projections made by Moody’s Analytics finding Maine could lose up to $1.2 billion in the same timeframe.
The state also faces a $200 million revenue shortfall for this fiscal year, but that is expected to be covered by leftover and reserve funds. Figueroa noted the recession spurred by the pandemic is “not normal for a number of reasons,” and that it is still too early to get a full picture of the fallout. But she said the state was put in a better position for this fiscal year by altering its supplemental budget as the virus reached the state.
Maine officials have been confident the state has enough money to cover its expenses through the end of June, even as tax revenues plummeted by $248 million in April, largely in part due to Gov. Janet Mills delaying the tax filing deadline to July.
Full revenue figures for May will not be available until the middle of June, but Michael Allen, the state’s associate commissioner of tax policy, said sales tax revenue is projected to be down 22 percent. However, he said the state may have moved past the worst of revenue losses, adding that the unfolding economic reopening may lead to a rebound.
The biggest questions revolve around how the state will navigate next year’s fiscal challenges. The $2.2 trillion CARES Act passed by Congress in March is supposed to help with that by offsetting coronavirus-related expenses states incur from March until the end of the year.
About $5.4 billion in federal aid has flowed into the state to help offset the pandemic, including more than $4.1 billion in small-business loans and the $1.25 billion through the CARES Act. Figueroa said some of that money has been used to pay for personal protective equipment and replenishing an unemployment fund, which has been taxed by the record amount of claims in the state.
However, the state has held off on distributing money to entities like local governments for expenses and schools as some cities and towns clamor for a plan while their budgets buckle. Figueroa said the state needs more guidance on how to best allocate the money and may wait further in the event additional aid is coming.
Lawmakers — some frustrated by their lack of involvement in the state’s virus response since adjourning in March and handing sweeping power to Mills — want to be part of those discussions. Republicans said they want direct involvement in the proceedings.
Rep. Sawin Millett, R-Waterford, a former budget commissioner who sits on the budget panel, said the response should not be managed “solely by brainstorming and planned initiatives without legislative concurrence.”
“We’ve got difficulty in the economy of Maine right now and it needs to be repaired,” he said.
Democrats stressed that getting the aid out to communities as quickly as possible should be the end goal. Rep. Drew Gattine, D-Westbrook, who co-chairs the committee, said he didn’t want to see “the fact that we haven’t figured out we’re going to interact together” delay that.
“I think that would be bad for the Legislature and bad for the administration,” he said.
Watch: Janet Mills announces changes to June 1 reopening phase