Gov. Janet Mills’ proposal to return half of the state’s $822 million revenue surplus to 800,000 taxpayers in the form of $500 checks will benefit about 275,000 people who weren’t eligible for relief checks last year, her administration said Friday.

The Mills administration released more information about the plan on Friday, as well as other details about $148 million in spending proposals she unveiled in her State of the State speech Thursday night. Along with the $500 checks and other initiatives, the total includes a $20 million plan to provide free community college tuition for up to two years for students who graduated high school in 2020 and 2021, plus those who will graduate in 2022 and 2023.

All of Mills’ proposals will need to survive the legislative budget negotiations over the coming months, and those debates were already taking shape Friday. Mills is expected to formally present her budget proposals next week.

The plan to issue a new round of checks to Maine residents would have the broadest immediate impact and, predictably, generated questions about exactly who would be eligible.

Last year, the state sent $285 checks to more than a half million Mainers. Those relief payments only went to people who worked during the pandemic, a bonus that Mills called “a little thank you” from the state.

This time, the governor’s proposal to send $500 checks would target taxpayers, a group of about 800,000 people that includes those relying on social security or retirement income, the self-employed and certain business owners. It also would include more couples who file taxes jointly, according to the Department of Administrative and Financial Services.

Eligibility would still include an income limit. Only individuals earning less than $75,000 as an individual or $150,000 as a household and who file a tax return by Oct. 31, 2022, would qualify. If approved by the Legislature as part of the supplemental budget, checks would start being issued on July 1, a DAFS spokesperson said.

During her State of the State address Thursday, Mills framed the assistance as a way to help Mainers struggling to afford essentials like food and fuel amid record inflation. She even gave credit to Republicans for the idea.

“Many of my friends on the other side of the aisle, like Senate Minority Leader Jeff Timberlake and House budget lead (Rep.) Sawin Millett – have called for a return of half the surplus to Maine people through direct checks,” Mills said. “I think they’re right.”

On Thursday night, however, Republicans were not immediately won over by the proposal, even while taking credit for the previous rounds of checks. And they hadn’t moved any closer to endorsing the plan on Friday, although they were open to and hoped to be included in negotiations.

GOP SEEKS LONG-TERM TAX RELIEF

Both Timberlake, of Turner, and House Minority Leader Kathleen Dillingham, of Oxford, spoke of the need for long-term tax relief.

“We applaud the fact that Gov. Mills agrees with our commitment to give back budget surpluses to Maine’s taxpayers,” Timberlake said in a written statement. “While we can’t comment on a plan of which we haven’t seen the details, any budget discussions should center on long-term solutions to make Maine a more affordable place to live.”

“If the administration believes these additional tax revenues are ongoing, we should be discussing a reduction in income tax to allow Mainers to keep more of the money they make, not to grow government,” Dillingham said in a written statement. “Should this proposal move forward, we should distribute funds electronically as soon as possible, to people that need them now, rather than incur additional delays and handling costs.”

When the surplus – fueled by federal funding and consumer spending – was first projected in November, House and Senate Republican leaders issued a joint statement highlighting unsuccessful efforts to reduce income taxes, a cause championed by former Gov. Paul LePage, who is running for the Blaine House again and is expected to face Mills this fall. Republicans pointed to a previous proposal to provide $300 million in income tax relief to people who worked throughout the pandemic by exempting an additional $10,200 in income from state income taxes. That would have provided an estimated average tax cut of $750 a year, they said.

Mills’ proposal also drew some criticism from progressives.

Cate Blackford, public policy director for the Maine People’s Alliance, said in a written statement that the projected $822 million was an opportunity to invest in unmet needs, such as mental health care, housing, paid family and medical leave, and efforts to combat climate change. She urged Mills to target any direct payments to low-income households.

“Instead,” she said, “(Mills) handed Republicans their full request to give back half the surplus as cash.”

It seems Mills anticipated some criticism from her left flank. She closed Thursday’s 50-minute speech, which mentioned “progress” 22 times, by taking a few playful jabs at progressives. Mills set up her zingers by drawing on a quote often attributed to former U.S. House Speaker Sam Rayburn of Texas: “Any fool can burn down a barn; but it takes a good carpenter to build one.”

“Let’s build that barn together – a solid shelter to weather every storm,” she continued. “Let’s not argue about how many nails are in your nail gun. … Or will the very rich pay for the shingles? Will Portland developers want to put condos in the loft? … Will there be a tenants’ union?”

OTHER INITIATIVES

The administration also released additional details to the Press Herald about other initiatives that will be included in her supplemental budget:

• A $50 million investment in hospitals and nursing homes that would include one-time funding of $25 million each, including $6.8 million in general funds for hospitals and $7.5 million in general funds for nursing homes.

• Nearly $27 million in ongoing general funds would be used to provide universal free school meals, which is in addition to the $10 million set aside last year.

• A total of $7.9 million would be dedicated to preventing or offsetting tuition hikes at the University of Maine System.

• A plan to maintain the state’s commitment to fund 55 percent public education costs would include $30 million for an Education Stabilization Fund.

• A total of $12 million would fund a bill sponsored by House Speaker Ryan Fecteau to increase pay for child care workers.

• And $1.5 million in one-time general funds would be used to provide grants for schools to install durable greenhouse structures to teach students and their families to grow food and to increase the amount of locally grown food at schools.

Mills also vowed to make broadband internet accessible to anyone who wants it by 2024. That would be done through the Maine Connectivity Authority, which is looking to leverage American Rescue Plan Act funding at the state and local level to continue building out fiber optic lines throughout the state and increase access through other technologies, such as satellite or wireless.

“We believe it is an ambitious but achievable goal that every person in Maine who wants to connect to high-speed internet will be able to do so by the end of 2024,” said Ben Goodman, a legislative liaison for the Department of Economic and Community Development.

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