Gov. Janet Mills has split her State of the State update into two parts this year to create more space to discuss the mass shooting in Lewiston and the extreme weather events that have gripped the state over the past year.
“These unique times call for a unique approach,” Mills wrote in the first portion that she delivered in writing to the Legislature Tuesday morning.
Mills said she will dedicate her speech Tuesday evening, which she will give before both houses of the Legislature, to those subjects.
The morning’s letter focused on fiscal responsibility and the need for increased efforts to build more housing, fight the opioid epidemic and improve child safety.
Mills also proposed greater investment in public schools, a cost-of-living adjustment for behavioral health providers and an overhaul of nursing home facility rates.
“From day one, my Administration has been guided by the belief that to strengthen our state, we have to invest in our greatest asset: the people of Maine,” Mills said. “Those investments are working, but we still have more to do to ensure that our state is the best place in the nation to live, work, and raise a family.”
Maine’s economic outlook
Mills said that before she took office Maine was frequently at the bottom of states for economic growth, devoting the first part of her letter explaining why that is no longer the case.
Over the last few years, Maine has seen growth in population (2.4% from 2020 to 2023) as well as Gross Domestic Product (9.2% since 2019), beyond that of its New England neighbors and even most of the country, Mills noted. Mainers have also seen increased personal income (24% since 2019) and productivity (12% since 2017).
Last year saw more new businesses than the year before, and unemployment remained on-par with the rest of New England and below the national rate.
“This improvement didn’t happen by accident,” Mills wrote. “With the support of the Legislature, we have been making investments in Maine people that have helped create the conditions for robust economic growth.”
The Maine Jobs and Recovery Plan infused money into businesses to create jobs and help maintain an equilibrium for Maine’s economy at an unstable time, she said, pointing out how the state also funded job training programs and community college to prepare the next wave of the workforce.
“By investing in what people need to enter, and succeed, in the workforce — hands-on job training programs; affordable child care, quality education, paid family and medical leave — we are strengthening our economy,” she wrote.
A warning about the budget
While Mills said the update on Maine’s economy is “good news,” she cautioned “that a state’s economic stability can change quickly if we do not budget prudently and responsibly for the future.”
Maine is projected to have $265 million more in revenue than initially expected through the end of 2025, Mills said. And while that feels like a lot of money, Mills pointed to a number of other states that are reportedly facing budget shortfalls with the end of pandemic relief funds.
Mills said the state needs to “look to the future to know what our revenues will be and to plan for the bills that are due in the months and years ahead.”
State revenue levels are projected to level off in the next two years, and net revenue is expected to be lower than it was in 2022. Mills said she wants to approach this year’s supplemental budget with “caution and foresight.”
Mills acknowledged the many outstanding needs across the state, adding that “in the past, we have been able to say yes to a lot of things. However, this year is, and must, be different.”
To that end, the governor proposes saving $100 million in projected revenue from the supplemental budget to use in the next biennium.
Balancing the need to save for the future, Mills also laid out some plans for investing in the needs of Mainers today.
Maine has invested in fighting the opioid epidemic for the past five years by distributing the overdose reversal drug naloxone, funding new residential treatment beds and enacting a Good Samaritan law to protect people who call for help.
But Mills wants to build on that work by using $750,000 of existing state funding to
add nine more recovery coaches to be embedded within other local law enforcement emergency services; using $1.25 million in federal funds to distribute more naloxone; and dedicating $4 million from the supplemental budget to expand Medication Assisted Treatment in county jails.
“In all, we are on track to see a more than 16 percent reduction in fatal overdose deaths for 2023, the first time in five years we’ve recorded an annual decrease,” Mills said.
Like the rest of the country, Maine needs more housing units. This was made clear in an October report that showed a need for 84,000 more homes and apartments in the next decade. Mills said this shortage, coupled with high interest rates, and labor and supply chain issues, has made affordable housing “out of reach for too many.”
“While this problem is not unique to Maine, at least here we are doing something about it,” she said.
In addition to efforts already underway, Mills proposed $10 million in the supplemental budget for the Affordable Homeownership Program to construct more than 130 additional homes.
She also wants to put another $16 million in the Emergency Housing Relief Fund to ensure winter warming shelters, long-term shelters and transitional housing programs remain open.
The state has been grappling with how to repair its broken child welfare system and better protect the children of Maine.
Throughout her time in office, Mills said there have been investments to strengthen the system during every legislative session. This included hiring more caseworkers and implementing new programs — “all of which is meaningful” — but it still hasn’t solved the problems.
As the Legislature’s Government Oversight Committee just last week reviewed dozens of possible reforms for the Office of Child and Family Services, Mills said it’s clear to her that filling vacancies and helping caseworkers manage their existing workload must be a top priority.
She wants to do this by creating more targeted positions with the supplemental budget including legal aides, trainers and other positions that can expand teams so caseworkers can focus efforts on engaging with children and families.
Sen. Lisa Keim (R-Oxford) drafted a bill to create a pilot program for recruiting and retaining case aides. Mills said it’s a great idea that she will sign, if it makes it to her desk.
Mills said she also directed her administration to review the pay for child welfare positions to ensure it properly reflects the complexity of the work to attract and retain employees. She also authorized the Department of Health and Human Services to add recruitment and retention payments for child welfare workers for a “much-needed boost.”
Reactions from community
The governor’s proposed supplemental budget is a “good start,” said Maine Center for Economic Policy President Garrett Martin.
“But with so many unmet needs and an already full rainy day fund, now is not the time to forgo potentially transformational investments in Maine people and communities,” he said in response to the first part of the State of the State.
Martin said legislators could use the money to not only improve lives now, but also provide tools to “weather future storms.” It could help child care providers stay open and offer rent relief for struggling households, he offered as examples.
“It’s disappointing to see the administration’s plan to squirrel away $100 million in General Fund revenues, especially given that Maine’s rainy-day fund is already maxed out at nearly $1 billion” said Mark Brunton, president of the Maine Service Employees Association, Local 1989 of the Service Employees International Union.
The union represents over 13,000 Maine workers and retired workers, including those in the executive branch of Maine state government. While Brunton said Mills presented “some good ideas” to strengthen child and family services, understaffing is widespread throughout government departments with nearly one in six positions unfilled.
Brunton attributed the more than 2,100 vacancies to the 15% pay gap between state employees and their public and private sector counterparts.
In the Republican response to the State of the State, party leaders said the governor’s rosy projection of Maine’s economy didn’t match how people were feeling.
“While she can try to paint a different version of reality for Maine’s people, we know you aren’t buying it,” said Senate Minority Leader Trey Stewart (R-Aroostook).
Stewart, who was joined by House Minority Leader Billy Bob Faulkingham (R-Winter Harbor), said families are struggling to pay their bills because the only items that seem to have gotten cheaper under Democratic leadership are “lobster prices and cannabis.”
Faulkingham said the government is “taking from family budgets” to fund clean energy, ruining Maine’s skylines and pristine oceans. He also spoke against state efforts to support “undocumented immigrants.”
Changing course starts with the November election, Stewart said.
Editor’s note: This story was updated twice, once to include reactions from the community and a second time to include the Republican response.