(The Center Square) – The Maine Legislature is gearing up to vote on a two-year, $8.5 billion budget that includes pandemic-related "hazard" payments to workers and a historic level of school funding.
Over the weekend, the Democratic-controlled Committee on Appropriations and Financial Affairs reached a deal on the new spending package, which updates a previously approved two-year budget.
A key provision of the proposal includes $187 million to meet the state’s obligation to pay 55% of local education costs, which was mandated under a previous state law.
The plan also includes $300 one-time "hazard" payments for workers earning less than $75,000 per year, or joint filers making less than $150,000, who worked during the pandemic.
Cities and towns would see more tax revenue flowing to their coffers from increased revenue sharing with the state, which is also a part of the budget plan.
Gov. Janet Mills praised the compromise bill and urged lawmakers to approve it swiftly.
"From 55% school funding, to full revenue sharing, to increased property tax relief, to health care, and much more, this budget makes important, meaningful, and historic progress for Maine people," the Democrat said in a statement.
Tax breaks for workers who remained on the job during the pandemic was a key priority for the Legislature's Republican minority, whose support is needed to approve the final budget.
“Mainers that worked during the pandemic should receive some type of acknowledgment and reward for their efforts," House Minority Leader Kathleen Dillingham, R-Oxford, said in a statement. "Passage of this budget will deliver positive results for Mainers."
The hazard pay provision, if it survives Mills' veto pen, would cost the state an estimated $150 million and benefit about 500,000 taxpayers.
The bipartisan agreement on a new spending plan comes nearly three months after Democratic legislative leaders used a seldom employed political maneuver to push through an initial version of the budget without a single Republican vote.
At the time, Republicans blasted the spending proposal as a "sham budget" and held a news briefing at the state house outlining their agenda for the budget. That included a proposal to provide a $10,200 income tax exemption for people who didn't collect unemployment during the pandemic.
The latest budget includes targeted investments in health care, mental health and substance abuse and expanding broadband access while ensuring that the state has enough funding and resources to deal with the COVID-19 outbreak and vaccine rollout.
It doesn’t raise any wholesale taxes and boosts the state's "rainy day" reserve fund by $60 million to more than $328 million.
The spending plan is buoyed by more than $7.6 billion in federal pandemic relief funds, which will be used to reduce the state's projected revenue shortfalls over the next two years.
The budget is expected to go before the full Legislature on Wednesday, one day before the July 1 beginning of the fiscal year.