The $1.9 trillion American Rescue Plan Act recently approved by Congress will deliver roughly $6 billion to Maine’s economy, according to recent MECEP analysis. The top initiatives that will support Maine’s economic recovery include:
- $2.17 billion in payments to Maine households, including $1.67 billion in Economic Impact Payments (direct checks) and $503 million boost to the Child Tax Credit and Earned Income Tax Credit.
- $1.67 billion for state government and communities, including funding to protect jobs, services, and infrastructure investments critical to the recovery.
- $880 million in pandemic unemployment assistance, including a 26-week extension of the $300 bonus payment and a tax exemption for up to $10,200 of income from unemployment in 2020.
- $537 million for Maine’s K-12 schools and higher education, including funding to help Maine’s k-12 schools safely reopen for in-person instruction and to help make up for learning losses caused by virtual schooling.
- $314 million for health care, including vaccination and testing and rural health care centers.
- $192 million for housing assistance for renters and homeowners.
- $156 million for child care, including targeted funding for children from households with low incomes.
- $58 million to strengthen social support systems to help families afford food and other basics.
The graphic below shows the estimated amount of funding coming to Mainers through different provisions of the ARP. Hover over each block for more details on the particular program, then keep reading for more information about how the ARP delivers for Maine.
Relief for All Mainers
The largest portion of Maine’s benefit from the ARP, totally roughly $1.67 billion – will go directly into Mainers’ pockets in the form of another round of economic impact payments. Individuals who received previous payments of $600 authorized in December will receive an additional $1,400.
Adult dependents and family members of undocumented immigrants, who were excluded from the prior payments, will receive $2,000 each.
Families with children under 18 will receive an additional benefit, through a temporary expansion to the existing federal Child Tax Credit. The ARP increases the credit for 2021, and makes it fully refundable, which will help families with the lowest incomes still reap the full benefit of the credit. Children under 6 years old are eligible for up to $3,600, and those between 6 and 17 years old are eligible for $3,000. The federal government plans to issue the payment in monthly installments to help families cover monthly expenses all year, rather than a lump sum payment when the family files its taxes.
Low-income workers without children will also be eligible for more assistance in 2021, through the expansion of the Earned Income Tax Credit for adults without children at home (including parents with children living at college). This provision increases the number of Mainers eligible and the amount of benefits for childless adults.
Relief for State and Local Jobs and Services
The ARP will provide funding to state and local governments to make up for revenue shortfalls caused by the COVID-19 recession. By filling revenue shortfalls, the funding will protect jobs for teachers, firefighters, public health workers, and others on the front lines of Maine’s recovery. It will also protect critical public services at a time when Mainers need them most.
The ARA provides $1.029 billion in COVID relief funds to the state, while local governments have been allocated up to $376 million.
Additionally, the bill ringfences some funding for capital projects – approximately $129 million in Maine. This money is more flexible than the funding received under the CARES Act and may be spent on projects through 2024. This should ensure that Maine is able to maintain crucial services at the state and local level, while continuing to invest in our infrastructure.
Relief for Unemployed Workers
The ARP extends federal unemployment benefits through September 6 (Labor Day), and continues a $300 weekly bonus payment on top of the regular unemployment benefit, which replaces only a portion of a worker’s usual wages. With the bonus payment, the average unemployed worker in Maine will receive $625 per week.
For the 50,000 Mainers currently receiving unemployment assistance, this means a continuation of crucial financial support for another six months if they are unable to find work in the meantime.
For those who were unemployed in 2020, the ARP creates a one-time tax exemption for UI income. The first $10,200 of state or federal benefits received in 2020 will not be subject to federal taxation.
Relief for Schools and Students
In order to help schools re-open for in-person instruction as safely and quickly as possible, the ARP includes will sed $411 million to Maine’s K-12 schools. This money will allow schools to put additional safety precautions in place, fund critical renovations, such as new heating and ventilation systems, and cover increased staffing costs from smaller class sizes.
Colleges and universities will also receive additional funding, aimed largely at reducing hardships like housing and food insecurity for students. Maine’s higher education institutions will receive $123 million.
Relief through More Health Care
The ARP contains a number of provisions directly related to public health and fighting COVID-19.
Federal funding for vaccine distribution, manufacturing of personal protective equipment, and the work of public health agencies is all included. The bill also addresses knock-on health effects of the pandemic, with resources to help treat mental health and substance use disorder, both of which have gotten worse over the past year. Maine should be eligible for $15 million in grants to address these problems.
Individual Mainers who have lost access to health insurance over the past year will also have help getting insured again. The bill fully funds continuation of employer-based coverage through COBRA until September for individuals who have lost their jobs. Additionally, the ARP expands subsidies for plans purchased on the individual health care market the Affordable Care Act. Mainers shopping for coverage at Healthcare.gov will pay less in monthly premiums, and those who previously earned too much to qualify for any subsidy should qualify for financial assistance.
Relief for Mainers Facing Hardship
The ARP includes a number of provisions to reduce hunger and homelessness.
The bill extends an existing law that increases the amount of food assistance a family receives under the Supplemental Nutrition Assistance Program, or SNAP. Mainers eligible for SNAP will be able to receive the maximum benefit, plus an additional 15 percent, through the end of September. Pregnant women, new mothers, and their children will also continue to receive additional food assistance through the Women Infants and Children program.
To help Mainers stay in their homes and off the streets during the pandemic, the ARP adds $152 million to the state’s rent relief fund, on top of the $225 million allocated in December. The funds will help Mainers afford rent and utility costs through September 2027. Maine’s mortgage-holders who are struggling to make payments will be able to access a $40 million homeowners’ assistance fund. The ARP also authorizes a number of additional affordable housing vouchers, of which 350 are expected to be allocated to Maine.
Relief to Help Mainers Afford Childcare
The ARP offers some relief to working parents, especially mothers, many of whom have been expected to balance working from home and helping their children with remote learning or caring for infants for the past year.
Mainers with child or adult dependent care expenses will get an additional tax break in 2021. The ARP temporarily expands the Child and Dependent Care Credit, which helps families cover the cost of child care. The ARP increases the credit to 50 percent of care costs, up to $6,000. It also makes more Mainers eligible for the credit.
Maine’s child care providers will be eligible for more than $120 million in federal funds to help keep their doors open, and ultimately to make care more available and affordable for parents.
Billions more available through grants and loans
The programs listed above include the major elements of the ARP which direct money specifically to Maine through various funding formulas. But Maine’s businesses and nonprofits will also have access to over $79 billion in grant and loan programs, including specific programs for restaurants, performing arts venues, health care providers, and farms.