What’s in the $430 million supplemental budget

On Monday, Governor Janet Mills signed into law a $430 million supplemental budget passed by the legislature that includes significant investments in pressing needs for Mainers, particularly in housing, care work, and education — but which also leaves some significant needs unmet, including wages for state employees, and which poses challenges for the next legislature. 

Funding for housing

The supplemental budget continues the legislature’s work to make investments in affordable housing and provide immediate relief to Mainers facing eviction or homelessness: 

  • $18 million for a rent relief pilot program under the Maine State Housing Authority (MSHA) that pays up to $800 per month directly to landlords for people with low income who are at risk of eviction for up to two years 
  • $13.5 million for the state’s Emergency Housing Relief Fund which provides funding to homeless shelters and supports individuals who need to stay in short-term accommodations like hotels and motels 
  • $10 million for MSHA to invest in building affordable workforce housing 
  • $10 million for MSHA’s rural rental affordability program and $10 million for MSHA’s low-income tax credit, both of which help developers build affordable housing units 
  • $7.5 million to support low-barrier shelters that accommodate the most at-risk individuals without housing 
  • $5 million for MSHA to create a program to help mobile home park residents purchase the park as part of a residents’ cooperative 
  • $2 million to support public school students facing homelessness 

Funding for nursing homes 

The supplemental budget also makes significant investments in nursing homes and the people who work there: $125 million in state’ and federal funds provide extra payments to nursing homes, ahead of a comprehensive review of the MaineCare reimbursement rates that is expected to be completed by 2028. However, this may be short of what the nursing homes say they need to make up for years of chronic underfunding by the State.

Funding for education

The supplemental budget provides an additional $22.6 million to local school districts to ensure the state maintains its commitment to funding 55 percent of the essential programs and services costs for public schools.  

It also includes a provision to ensure education support workers are paid more than the statewide minimum wage. Under the new rules, districts will have to pay education technicians at least 125 percent of the state minimum wage (currently $14.15 per hour), starting in school year 2026-27. Other education support workers will have to be paid at least 115 percent of the regular minimum wage. While this will help alleviate the staffing shortage in some districts, it is less than the education and cultural affairs committee recommended. The budget also did not act on a recommendation from the committee to raise the minimum salary for teachers to $50,000 per year. 

Preventing safety net cuts

The final budget approved by the legislature rejects several cuts proposed by the Governor: 

  • Changes to the Medicare Savings Program approved last year will now go into effect as soon as the budget is effective in July, rather than being pared back as proposed by the Governor. 
  • Subsidies for child care providers — already authorized by the legislature but not spent by the administration — will be rolled over into the next fiscal year beginning in July, rather than being redirected as the Governor proposed. 
  • Unemployed immigrants with new work authorizations will continue to be eligible for food assistance under the Supplemental Nutrition Assistance Program. The bill includes an extra $5.4 million to fund the program. 
  • Towns and cities will face some new restrictions on general assistance (GA) for people facing homelessness. Specifically, the maximum amount of assistance for people staying in hotels or motels will be capped. The budget also appropriates an extra $10 million to help towns and cities with higher-than expected GA costs. The supplemental budget does not address the ongoing issue of low state reimbursement for GA, despite a committee recommendation to do so. 

Responding to crises

The supplemental budget provides substantial funding to respond to recent crises in Maine — the severe winter weather events and the Lewiston mass shooting in October. Several initiatives in the budget were related to law enforcement and health care costs from the Lewiston shooting, while $60 million was appropriated from the Budget Stabilization Fund to address storm damage. The supplemental budget also includes several mental health related measures, including ongoing funding for mental health crisis intervention services, creating mental health crisis receiving centers, establishing a new office of violence prevention, and a plan for an adolescent psychiatric facility. 

State workers left out

An effort to allow greater use of the state’s recruitment and retention payment system to help improve pay for state employees and address the ongoing pay gap failed at the last minute and was not included in the supplemental budget. While the bill did include some language authorizing use of the state’s salary plan fund for future collective bargaining efforts, there remains considerable work to be done to close the pay gap and make it easier to properly staff state agencies. 

Future budgets will require raising revenue

While much of the funding approved in the supplemental budget was one-time spending, the bill overall increased ongoing general fund spending by $160 million per year. The state has significant savings it can draw on to meet this need. The Budget Stabilization Fund remains at record levels, and the supplemental budget added another $30 million added to the Education Stabilization Fund and $23.5 million to the MaineCare Stabilization Fund. Nonetheless, at current revenue projections, the next legislature will need to close a considerable budget deficit in fiscal years 2025-26 and 2026-27.  

Drawing down savings is not the only option available to the next legislature. There are many ways the legislature can increase revenues to not only meet the increased spending already approved, but to continue one-time investments into future years. Doing so will require lawmakers to look seriously at raising taxes on the wealthiest Mainers who can most easily afford it.