Unions representing state workers and teachers applauded a plan by the Maine Department of Administrative and Financial Services (DAFS), released Wednesday, to address Maine’s projected $528 million revenue shortfall this fiscal year without making layoffs or cuts to critical services such as education and health care.
But workers and some economists say additional federal aid is critical to the state’s longterm recovery from the COVID-19 pandemic and recession, and if it doesn’t come, lawmakers must be prepared to raise taxes on the wealthy.
“It’s clear the administration is focused on maintaining quality services that have been in increasing demand by the scores of impacted Mainers,” Dean Staffieri, president of the Maine Service Employees Association, SEIU Local 1989, which represents many state workers, said in a statement.
“Knowing the proposed curtailment cuts will not impact school funding this year is appreciated as our public schools continue to provide the education our students need,” said Grace Leavitt, president of the Maine Education Association, which represents teachers.
In August, Governor Janet Mills asked state department heads to submit proposals to trim spending by 10 percent. The announcement followed alarming projections by state economists that Maine’s tax revenue will fall by $1.4 billion through 2023 as sales and personal income taxes shrink due to the recession.
Of that, a $883 million revenue shortfall is projected for the next two-year budget.
DAFS Commissioner Kirsten Figueroa released a proposal on Wednesday that avoids cuts to services and layoffs of state workers, though will include a hiring freeze and $256 million in spending cuts for this budget year.
To fill this year’s $528 million budget gap, Figueroa proposed that the state use $130.5 million in unspent appropriations from last year, $96.7 million in CARES Act funding, as well as $125 million from an improved federal reimbursement rate for Medicaid, also funded by the CARES Act.
Figueroa also proposed using $70 million from a tax boon on alcohol purchases, which has increased during the pandemic.
DAFS’ plan will need final approval from Mills.
“This proposal cleans out the couch cushions to address the state’s immediate fiscal crunch,” said Garrett Martin, executive director of the Maine Center for Economic Policy (MECEP). “We commend the department for proposing a plan that avoids harmful layoffs and major cuts to critical, economy-boosting services such as education and health care.”
Martin said the proposed curtailments “bu[y] the state time to address the larger $883 million revenue shortfall in the next two-year budget.”
“Those losses jeopardize the state’s response to the ongoing crisis, in which low- and moderate-income Mainers are facing increased hardships such as record unemployment, loss of health coverage, and greater difficulty meeting basic needs such as food and housing,” he added.
‘Maine needs additional revenue to protect jobs and fuel the recovery’
The Maine Education Association said direct aid to cities and states from the federal government is needed to avoid cuts in the future.
“While schools appear to be left unscathed in this round of cuts, we know Maine needs action from the federal government to make sure our state can continue to support our public education system, from Pre-K through college,” Leavitt said. “Now more than ever, we need action from Congress and the President to provide much needed relief to our state, our cities and our towns.”
In May, House Democrats passed the $3 trillion HEROES Act, which included $1 trillion for state and local governments. But Senate Republicans did not bring the relief package to a vote, after Senate Majority Leader Mitch McConnell (R-Ky.) said he had no interest in relieving states.
Democratic leadership did not make state relief a bargaining point during initial negotiations over the CARES Act, when Republicans secured massive bailouts for large corporations.
On Tuesday, Senate Republicans unveiled their latest $500 billion coronavirus relief proposal, a “skinny bill” that includes no direct relief for states. It was opposed by Democrats, who denied it the 60 votes it needed to advance. Observers say a compromise that includes state relief before the November election is unlikely.
MSEA urged Sens. Susan Collins and Angus King to call for a vote on the HEROES Act.
“The U.S. House of Representatives passed federal COVID-19 relief for unemployed workers and state and local governments in May in the form of the HEROES Act, but instead of passing it, the U.S. Senate took the summer off. Maine people can’t wait any longer,” Staffieri said.
With federal relief unlikely in the near future, Martin said state policymakers must consider tax fairness proposals. Last session, Democrats in Augusta, who control both chambers of the legislature as well as the governor’s veto pen, failed to undue tax cuts favoring the wealthy created during the LePage administration.
Last month, Mills said she would consider such proposals if passed by the legislature — a departure from her previous opposition to raising any taxes.
“Maine needs additional revenue to protect jobs and fuel the recovery by keeping money flowing to families, communities, and our economy,” Martin said. “MECEP urges Congress to pass a robust, bipartisan relief package that includes additional funding to make state and local budgets whole. Maine policymakers must also be prepared to raise revenues, such as by closing tax loopholes and raising taxes on the wealthiest households and corporations, if Congress fails to deliver.”
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State workers, teachers praise temporary budget fix, but need for more revenue remains - mainebeacon.com
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