AUGUSTA, Maine — Gov. Janet Mills announced a $224 million deposit into the state’s rainy day fund Tuesday, nearly doubling the fund’s balance on the heels of an unprecedented influx of federal money.
The news of the deposit comes just a year after Maine was facing the prospect of large budget shortfalls as the pandemic hammered state revenues, particularly meals and lodging taxes generated by establishments that were especially hard hit by COVID-19 restrictions.
But federal aid packages have helped to wipe away those grim estimates, putting the state in a position to boost school funding and municipal revenue sharing, as well as direct $40 million into the rainy day fund.
The fund now stands at $492 million, a historic high, according to the governor’s office. In announcing the deposit on Tuesday, Mills held up the fund as a prime example of her success in handling the pandemic, likely to be the cornerstone of her reelection campaign against her predecessor, Paul LePage, who touted growth in the state’s rainy day fund during his eight years in office.
“This sound fiscal management has positioned us well to continue our economic recovery and to send a strong message to bond rating agencies about our financial stability,” Mills said in a statement.
Maine was able to weather the pandemic better than most other states as it experienced some of the lowest coronavirus case rates nationwide. That extended to the state’s fiscal situation. Despite a budget curtailment package, spending cuts and the use of money generated by overperforming state liquor contracts, Mills never dipped into the rainy day fund itself, a pool of money specifically reserved for when major emergencies occur and the state cannot pay its bills.