Gov. Janet Mills speaks at a March news conference at the State House, alongside Nirav Shah, the director of the Maine Center for Disease Control and Prevention. Credit: Robert F. Bukaty | AP

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Maine lags behind New England neighbors when it comes to allocating the largest chunk of the coronavirus relief funding from the federal government as it lobbies for more flexibility and money to address blooming shortfalls across state and local government.

More than $1 billion received as part of a March stimulus package has yet to be designated, though the administration of Gov. Janet Mills has given clues about some of its top priorities amid criticism for not moving faster and a bailout request from the hospitality industry.

At the same time, the state has already allocated hundreds of millions of federal dollars for the direct coronavirus response, education and other services. Here’s how Maine is treating federal coronavirus aid so far.

More than $1 billion that Maine received as a stimulus came with serious strings attached. The state is still hoping Congress will change that. A $2.2 trillion stimulus package, known as the CARES Act, that passed at the end of March gave Maine $1.25 billion in funds to respond to the coronavirus. But there are rules about how that money must be used.

The funds must cover expenses that occurred due to the coronavirus and were not previously budgeted for, according to the U.S. Treasury. Funds cannot be used to offset revenue deficits. States can transfer money to local governments, but cities or towns must spend it in a way that complies with federal regulations.

Mills, a Democrat, as well as members of Maine’s congressional delegation, have called upon Congress to make the rules more flexible, citing impending revenue shortfalls, which the state projects will be more than $500 million by mid-2021. A spokesperson for Mills said Tuesday that the governor also “continues to press” Congress and the president for additional funding to help offset the widespread economic effects of the virus.

Several proposals, including a bill co-sponsored by U.S. Sen. Susan Collins, R-Maine, would give states more funding and additional flexibility. But it has not come up for a vote since it was introduced in mid-May. Another proposal by House Democrats that would provide additional funding to states looks to have little chance of passing the Senate.

How the money will eventually be spent is still up for debate, though the state has some ideas and many groups have their own suggestions. With the Legislature not in session, decisions over how to spend the federal funds falls to the governor, though Mills has asked for lawmakers’ advice.

Kirsten Figueroa, commissioner of Maine’s budget department, told lawmakers in a May hearing that the state had identified personal protective equipment, testing expenses and backfilling the unemployment insurance trust fund as three areas where it expected to allocate funds.

The department is set to brief the Legislature’s budget committee again on Friday. A spokesperson for the governor said Tuesday that it was her administration’s goal to allocate the funds “in a timely manner.” That could mean the state begins making spending decisions without knowing whether the rules might change or if more money will be on the way.

“If we’re going to get more, that adds some complexity to it, but I don’t think the uncertainty is a reason to do nothing,” said Sen. Cathy Breen, D-Falmouth, who co-chairs the appropriations committee.

In the meantime, outside groups have also come up with their own plans. Last week, several tourism industry groups released an economic recovery plan that asked the governor to allocate $800 million to retail and hospitality businesses, citing the virus’s detrimental impact on tourism.

New Hampshire has already designated more than half of the funds, with the largest share going to a relief program for businesses, according to the New Hampshire Fiscal Policy Institute. Applications for that program were due last week, so the money has not yet been distributed. Vermont’s Legislature is currently hammering out the details of a spending bill.

Some wish Maine would move faster. A coalition of mayors including those in both liberal Portland and the more conservative Auburn asked the state to share some of the federal money in order to offset costs incurred due to the virus, the Portland Press Herald reported.

“Our expenses are skyrocketing all the while we are trying to do the right thing by providing financial support to our ailing small businesses, and the people they employ,” Auburn mayor Jason Levesque wrote in a Press Herald op-ed.

While the state has yet to spend from the biggest pot, it has been distributing millions in grant money. According to data from the Maine budget bureau, the state approved $88 million in financial orders from CARES Act-related grants as of last week.

The largest order so far was $43 million for coronavirus-related expenses such as sanitation and adaptations for distance learning, which the state allocated to local education agencies. The state also distributed nearly $9 million for technology to support students’ remote learning.

The state also designated $2.4 million for the Maine Center for Disease Control and Prevention to hire staff for contact tracing and increase the state’s testing capacity. That money is just a part of a $52 million in grants the state has received for the agency.

Other grants included nearly $11 million for child care subsidies and more than $5 million to support seniors, including money to deliver meals.

Correction: An earlier version of this report misstated the amount of Maine’s projected revenue shortfall and the financial assistance requested by the state’s hospitality industry.