Former Gov. Paul LePage argued on Thursday that the $850 checks set to go out to most Mainers beginning next month could worsen inflation, escalating criticism of a key budget item backed by Gov. Janet Mills and members of his own party.
The checks, which are set to go out beginning in June, were the centerpiece of the Democratic governor’s supplemental budget, but the idea was first floated by Republican lawmakers to return a chunk last fall. It had bipartisan backing in the Legislature.
The former governor’s continued opposition to the checks has him lining up both against Mills, his opponent in the 2022 election, and standing apart from members of his own party in the State House. Both have touted the checks as a key accomplishment this legislative session.
LePage spoke with reporters at a campaign stop in Bangor, where he and former U.S. Rep. Bruce Poliquin of Maine’s 2nd District pumped gas for customers at the Dysart’s restaurant and convenience store on Broadway in Bangor. The pair were there to highlight the problem of high fuel costs as Maine has set new records for average gas prices this week.
Legislative Republicans called upon Mills last fall to return at least half the state’s budget surplus directly to taxpayers to combat rising costs. She embraced that in her State of the State speech in February, initially proposing $500 checks for Mainers making up to $75,000 if single or $150,000 if married.
The check amount later grew to $850 after budget projections came in higher than initially anticipated. After a push from legislative Republicans who wanted to send checks to all Mainers, lawmakers also expanded eligibility to include all Mainers making up to $100,000 if single or $200,000 for married couples.
LePage, who derided the idea as a Mills campaign gimmick in February, told reporters on Thursday that he would have preferred the money spent on checks to be invested in the state’s infrastructure instead and renewed previous calls for Mills to suspend the gas tax and eliminate tolls on the Maine Turnpike to help lower gas and food costs.
“Right now, we are facing an 8.5 percent inflation rate,” he said, citing the most recent Consumer Price Index. “The $850 is going to bring it up to 10 percent.”
On the national scale, economists have said massive stimulus programs have contributed to inflation. Researchers at the Federal Reserve Bank of San Francisco recently published a letter arguing that fiscal support during the pandemic, including stimulus payments, could account for about 3 percentage points of inflation nationally.
But any effect would be smaller in Maine, since the roughly $729 million that the state is expecting to spend on stimulus checks is a tiny sum compared with the trillions of dollars of fiscal stimulus that the federal government spent across the U.S. over two years.
The checks were by far the largest item in a $1.2 billion spending package inked by Mills and lawmakers in April. The governor has touted the checks as a way to help families offset higher costs of gas, food and other items due to inflation. Her spokesperson, Lindsay Crete, said Mills “will not apologize for delivering them a small measure of relief.”
“Paul LePage is so desperate to criticize [Mills], he’ll even go after a proposal fully endorsed and celebrated by members of his own party,” said Misha Linnehan, spokesperson for the Maine Democratic Party. “Even worse, he’s opposing much needed economic relief in the form of $850 checks for hardworking Mainers as they grapple with rising costs.”
Legislative Republicans have put a slightly different spin on it, with Sen. Scott Cyrway, R-Benton, saying in a recent address that spending the money on relief checks instead of new programs will “keep government from growing any larger than it already is.”
