Gov. Mills proposes more spending on housing, child care, nursing homes

Gov. Janet Mills on Friday proposed additional investments in housing, child care and nursing homes in a revised budget plan headed to the Legislature.

The proposal is Mills’ response to the latest projected surplus as tax revenues continue to exceed expectations built into the state’s two-year budget. Forecasters have said the state will bring in an additional $108 million in the 2024 and 2025 fiscal years, pushing the total projected surplus to $373 million.

Among other things, Mills’ change package includes $22 million in one-time funding to build more affordable housing, $23.2 million to help struggling nursing homes until higher reimbursement rates kick in over the next few years and $11.8 million in one-time grants for child care staff recruitment and retention.

“This fiscally responsible proposal aims to address some of the most urgent challenges Maine people are facing, like access to affordable housing, child care and long-term care,” Mills said in a written statement. “And it aims to tackle these critically important items in a financially sustainable way, ensuring that, when taken with my previous proposal to save money, the state of Maine can meet its ongoing commitments in the next biennium.”

The spending plan will be folded into an existing budget proposal and reflects Mills’ desire to use the surpluses for immediate needs and avoid expanding ongoing services that would have to be funded in future years. Mills has warned lawmakers against proposals that require additional ongoing spending, saying that revenues are expected to flatten in the coming years, while the costs of existing programs will continue to rise.

The update sets the stage for lawmakers to complete their negotiations and proposed changes to the state budget ahead of the Legislature’s statutory adjournment date of April 17.

House Speaker Rachel Talbot Ross, D-Portland, applauded parts of the governor’s proposal and said she expects the Legislature’s budget-writing committee will fully consider it as it wraps up its work.

“Gov. Mills has put forward a thoughtful and conscientious change package proposal,” Talbot Ross said in a written statement. “I’m fully supportive of the increased investments in affordable housing and the establishment of additional crisis receiving centers. … Mainers are depending on us to meet this moment and our final package must address the many unmet needs faced by families and communities across the state.”

Maine’s constitution requires the governor and lawmakers to pass a balanced budget.

Mills released a different supplemental spending plan in February, after the nonpartisan revenue forecasters predicted the state would take in $265 million more than they had originally thought.

Mills proposed $71 million in new spending, including proposed investments into the state’s mental health system in response to the Lewiston mass shooting and funding for more rural state police officers, bringing the biennial budget up to $10.41 billion. She also proposed socking away $107 million to help offset increased costs in the next biennial budget.

The state’s Budget Stabilization Fund, or rainy day fund, is flush with $968.3 million – the statutory limit of 18% of general fund revenue from the previous fiscal year. But Mills has proposed using $50 million of that fund to help communities adapt infrastructure for increasingly destructive storms fueled by a changing climate.

Shortly after that budget was released, revenue forecasters again increased their revenue projections, this time predicting an additional $108 million for the fiscal year ending June 30, bringing the total projected surplus to $373 million this biennium.

The recurring surpluses have led to calls from progressives to increase investment in social programs. Republicans have been pushing for tax cuts for the last year and a half but have since shifted their focus to securing funding for their priorities, including funding for struggling nursing homes and repairing waterfront infrastructure damaged by a series of powerful winter storms.

Assistant House Minority Leader Amy Arata, R-New Gloucester, said her caucus was still reviewing the spending proposal and wasn’t prepared to discuss it.

Senate Republicans did not respond to a request Friday afternoon to discuss the proposal.

A spokesperson for Senate President Troy Jackson said he was still reviewing the proposal on Friday afternoon, but he was pleased to see additional funding for nursing homes, though he thinks more is needed.

The Maine People’s Alliance decried the lack of funding for rental assistance and other priorities while saving $107 million.

“While families are struggling to afford housing, child care, and health care and Maine has incredibly strong fiscal standing, this overflow fund feels unresponsive to the realities that Mainers face,” alliance lobbyist Adam Zuckerman said in a written statement. “This is not a time to be squirreling away additional funds. This is the time to fund real, lasting solutions to these crises.”

HELP FOR MOBILE HOME OWNERS

Other proposals in Mills’ change package include $5 million to help people living in mobile homes to purchase mobile home parks, and $5.5 million in “unexpected MaineCare pharmacy costs” as a result of a cyberattack on United Health’s Change Healthcare.

Another $17.5 million is proposed for the Maine Emergency Management Center, which has responded to a series of severe storms this winter. Most of that funding – $15 million – will be used as the state match for federal funding.

The package more than doubles the amount of money earmarked for a new crisis receiving center in Kennebec County. Though the center would be similar to one in Portland, which gives people suffering a mental health crisis a place to seek help so they don’t end up in an emergency room or a jail cell, the Kennebec facility also would provide treatment for substance use disorder.

Mills also has proposed creating a new center in Lewiston in response to the Oct. 25, 2023, mass shooting in the city. And lawmakers unanimously approved a bill from Talbot Ross, the House speaker, to establish additional centers in Aroostook and Penobscot counties, though that bill still awaits funding.

The new spending package increases Mills’ biennial budget proposal to nearly $10.44 billion.

Some money in the proposal is intended to help prevent nursing homes from closing. More than two dozen long-term care facilities have been lobbying lawmakers for an additional $31 million through the “Who Will Care?” campaign.

Mills is proposing adding $23.2 million to her budget to bridge the funding gap while higher reimbursements rates are phased in through 2027. That funding, when combined with funding already in the budget, totals $31 million for the next biennium, which is expected to leverage $97 million in federal funding.

Angela Cole Westhoff, president and CEO of the Maine Health Care Association, said in a written statement that her group is still reviewing the proposal, but called it a “promising start.”

“With approximately 50 closures and conversions since 2014, it is clear that our nursing homes and residential care facilities are in dire need of support,” Westhoff said. “While the long-term solution to this problem is to increase MaineCare reimbursement rates to meet today’s price of providing care to our loved ones, this is an important start.”

EXPANSION BEING ROLLED BACK

Mills, however, is sticking with her plans to roll back an expansion of the Medicare Savings Program that was supposed to take effect last month. The expansion was passed by lawmakers and Mills signed it into law last year.

The Medicare Savings Program helps low-income seniors by reducing or eliminating out-of-pocket costs for premiums, deductibles, co-payments and coinsurance.

The law increased eligibility from those earning 185% or less of the federal poverty level to people earning up to 250% of the federal poverty level, or as much as $36,450 for an individual. The Mills administration is proposing to expand eligibility to people earning as much as 202% of the federal poverty level instead of 250%, leaving out thousands of older Maine residents who thought they would qualify.

Advocates urged lawmakers to restore the expanded program in the final budget.

The administration predicts that the $22 million housing investment will create an additional 150 new housing units, with $11 million being allocated to the Rural Affordable Rental Housing Program and an additional $11 million for low-income housing tax credits that would unlock $11 million in additional federal funding. That’s on top of $10 million already included in the budget for the Affordable Homeownership program.

The package also creates the fund that would help tenants purchase mobile home parks. The proposed $5 million would provide low- to no-interest financing to entities, such as resident cooperatives, to help offset the costs of purchasing the park.

Housing advocates celebrated the governor’s proposal and urged lawmakers to support it.

“We ask the Appropriations and Financial Affairs Committee, and Legislature to support this budget change package so all Maine people have a home. We know having a place to call home is the foundation for health and economic success for our state,” Laura Mitchell, executive director of the Maine Affordable Housing Coalition, said in a written statement.