Gov. Janet Mills, aided by Democratic majorities in the Legislature, has grown the state’s so-called “rainy day” fund to nearly $500 million, the highest total ever recorded, her office announced Tuesday.

Mills was criticized early in her term by her predecessor, former Gov. Paul LePage, and his Republican allies for being a tax-and-spend liberal who would drain the state’s savings account and bankrupt the state while increasing taxes.

Neither has happened under Mills.

Instead, she has added more than $282 million to the state budget contingency fund – known by lawmakers as the “rainy day” fund because it’s meant to be used as a backstop against state revenue loss during an economic crisis or other emergency. She also has opposed and successfully vetoed bills aimed at increasing taxes, including a bill that would have increased the real estate transfer tax for sales over $1 million.

A high contingency fund balance also helps the state when it borrows money on the bond market because it helps fetch lower interest rates with strong scores from credit-rating agencies, including Moody’s and Standard and Poor’s, which both rate the state’s debt as stable.

The Mills’ administration announced Tuesday, one day after the Legislature adjourned, that the stabilization fund had reached $491 million, or more than double where it was when LePage left office in 2019.

Although the current total is a historic high, it represents less than 7 percent of the state’s total two-year $8.5 billion budget, which includes funds outside of the general fund. The fund is capped at 18 percent of general fund revenue for the most recent year. It’s currently at 11 percent. State law also limits what a governor can use the fund for.

“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. “I am proud of the progress my administration and the Legislature have made together on this important front.”

Mills’ finance commissioner, Kristen Figueroa, touted the governor’s “foresight and planning” and highlighted state programs that many came to use during the COVID-19 pandemic.

“With the support of the Legislature, this administration has not only preserved programs and services at a time when they were most needed but also deployed a strong pandemic response that has kept our state among the healthiest and most vaccinated in the nation,” Figueroa said. “We will continue along this course, with prudent fiscal management and methodical deposits into the Budget Stabilization Fund to combat any unknown economic change.”

The state’s budget situation also has been greatly aided by an enormous federal response in the form of nearly $9 billion in aid that’s flowed to Maine from the Congress – both directly to residents in the form of stimulus and enhanced unemployment payments and to state and local governments in the form of aid for economic and pandemic recovery.

In her release Tuesday, Mills acknowledged the federal support for “Maine’s economy and people.”

On Monday, the Legislature passed, with Republicans in opposition, a bill that will allocate more than $1 billion in federal American Rescue Plan Act funds starting in October. Because the bill did not receive two-thirds support, it will not go into effect for 90 days.

The most recent $223.6 million deposit to the budget stabilization fund is the result of a supplemental budget that was approved of the Legislature and signed into law by Mills, allowing surplus revenues from the 2021 fiscal year to be set aside in the rainy day fund.

On Tuesday, Senate Republicans issued a release charging Mills with having the “shortest memory in gubernatorial history.” Tom Desjardin, a spokesman for Senate Republicans, said the state’s revenue picture is lopsided because of the large influx of federal funds to Maine and not because of  sound fiscal management by Mills.

Desjardin said that less than 12 months ago Mills was preparing state government for a revenue shortfall and had issued a curtailment order requiring all state departments to reduce spending by 10 percent.

“In a whopper of revisionist history, the governor now claims that the revenues she failed to predict last year are ‘a testament to both the foresight and planning of the governor,'” Desjardin said in a prepared statement. “Anyone who has paid any attention to the state’s economy in the last year is keenly aware that what created a robust budget surplus of more than $1 billion dollars for Maine was not the governor’s planning for doom and gloom, but a massive influx of cash from the government in Washington.”

Desjardin said Democrats introduced dozens of new spending items at the last minute in the bill passed Monday despite Republican opposition.

“Chief among these was a requirement that tens of millions of dollars in housing construction contracts be directed toward Democrat-supporting labor unions rather than awarded to the most qualified contractors who provide the lowest bid,” he said.

Desjardin also said he could not recall any Senate Republicans ever criticizing Mills for draining the rainy day fund or for not being committed to adding to the stabilization fund.

The new numbers from the Mills administration also were not persuasive for Maine Republican Party Chair Demi Kouzonas, who also has heralded LePage’s announcement to seek a third term in 2022, noting he is the most qualified of the three Republicans who have announced campaigns against Mills.

“Through shell games, Janet Mills is relying upon one-time federal debt cash from Washington to prop up her massive expansion of government,” Kouzonas said in a prepared statement, without elaborating. “The chickens will come home to roost and Mainers will pay the price.”


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