A sign sits on the sidewalk outside of Umami Noodle Bar in downtown Bangor letting customers know it is open for dining in. Credit: Linda Coan O'Kresik / BDN

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The Maine committee tasked with rekindling the economy on Wednesday asked Gov. Janet Mills to commit $300 million in federal funds in the form of grants to businesses struggling from the effects of the coronavirus pandemic.

The Economic Recovery Committee proposed early recommendations in a letter to the Democratic governor while warning that federal aid programs are about to expire and represent “an economic cliff for our state, and nation.”

“Unless further stimulus emerges at the federal level the effect on our state’s people and businesses will be devastating,” it said.

Maine economic forecasters on Wednesday projected a slow recovery from a coronavirus-induced recession and a $135 million budget shortfall for the fiscal year that ended Tuesday. Mills in May told Maine’s congressional delegation that the state could need at least $3 billion to make up for lost revenue and costs to fight the pandemic.

The Economic Recovery Committee asked the governor to allocate $300 million of the $1.25 billion Maine has received from the federal CARES Act stimulus aimed at helping counter pandemic-related harm. Mills, who is responsible for dispensing those funds, has committed $270 million of those funds toward stabilizing the state’s unemployment trust fund.

The economic recovery panel and its subcommittees still are reviewing recommendations, which they plan to finalize next week and submit to the governor on July 15.

In its letter the committee cited three emerging themes that it wants the governor to prioritize. They are safely reopening schools and higher education institutions, while allocating the $300 million in grants to businesses and $60 million to a state broadband action plan.

Some subcommittee members say the $300 million is not nearly enough, and they worry that the economic recovery panel is too focused on shoring up the state’s budget rather than helping businesses.

“I was a little concerned that the thought process is more on backfilling the state budget versus direct business relief,” said Curtis Picard, a member of a panel subcommittee on tourism and retail and the president and CEO of the Retail Association of Maine. “There really wasn’t much substantial discussion of what sort of budget cuts the state will have to consider.”

Picard noted the $300 million is not just for tourism, hospitality and retail, three of the economically hardest hit sectors by the pandemic, but for all businesses.

Maine is using New Hampshire, which also got $1.25 billion in CARES Act funding, as one of the models for how it plans to use the federal funding. That state is offering $500 million to support businesses, with $400 million in small-business relief, $30 million in flexible small-business loans, $10 million in agricultural business grants and $60 million for nonprofits.

The impact is dramatic and so, in that regard, we’re missing the target,” Picard said.

In mid-June, several tourism-related groups asked Mills to allocate $800 million in federal funding for small hospitality, tourism and retail businesses to keep their doors open and pay basic operating costs including rent, mortgage and payroll.

“We’ve learned that $1.25 billion is a lot of money, but it is not a lot of money,” said Kirsten Figueroa, commissioner of the state’s Department of Administrative and Financial Services, who spoke before the economic recovery panel on Thursday.

The hospitality, tourism and retail subcommittee said it plans to ask the governor to consider reopening businesses as important as reopening schools. Members said the two are reliant on one another in that schools must reopen for parents to be able to return to work and businesses need to restart to improve the economy, committee members said.

The subcommittee also plans to ask for more money for businesses to run safely and sustainably, a tax credit for personal protective equipment and a mask-wearing campaign. It wants the governor to hold off on the full economic panel’s recommendation on $60 million for broadband, which it said is better funded through bonds.