This story will be updated.
AUGUSTA, Maine — Gov. Janet Mills on Wednesday unveiled a nearly $900 million plan that would complete the state’s budget work for the year and looks likely to force another debate over taxes with legislative Republicans.
The updated plan from Mills contains $432 million in appropriations and $455 million in transfers from other parts of the budget as part of a plan that would come in at just over $10.3 billion over two years. It leaves $12 million more for the Legislature to consider, the Democratic governor’s office said Wednesday.
Mills’ new budget comes after Democrats flexed their majorities in March to pass a two-year, $9.8 billion budget over the objections of Republicans. At that time, the minority party wanted to include $200 million in income tax cuts focused on the lowest bracket. They doubled that demand to $400 million after state forecasters predicted more revenue surpluses.
The governor sets that aside in her plan, which is mostly based on initiatives swept out of the last budget. The largest single item is $400 million for transportation in an effort to win up to $1 billion in matching federal funding, as well as $80 million for housing initiatives, which is $30 million more than Mills proposed in her last budget document.
Mills has also proposed $31 million to create a program offering grants to Maine-based emergency medical services throughout the state and $4 million to double a refundable child care tax credit for working families.
Among education initiatives, the governor wants $50 million for the School Revolving Renovation Fund, which gives no-interest loans for school renovations and repairs. Other infrastructure requests include adding $22 million to an initially proposed $14 million for drinking and wastewater system improvements, $10 million for flood protection and $12 million to prepare for building offshore wind ports.
Mills is also trying to make good on her promise to tackle a state court case backlog by adding $3.2 million to create four trial court judgeships and hire more deputy marshals and clerks. The change package also proposes to repeal a tax on health care providers starting in 2025, which would be seven years after the federal government said it violated the law.
The major question now is whether the parties will agree to a spending deal or whether Democrats will move alone. In March, they quickly set aside a consensus process that governed state spending before their previous majority-only budget in 2021.
Under the normal process that requires bipartisan buy-in, budgets are negotiated in late June but approved with two-thirds majorities so they take effect immediately at the start of the new fiscal year in July. If Republicans do not join Democrats to pass this next spending proposal, it will take effect three months after lawmakers leave for the year.
New estimates in late April from the state’s Revenue Forecasting Committee said Maine would likely see $294 million more in tax revenue through mid-2025 than previously anticipated, which led the Republicans to double their tax-cut demand to $400 million.
The availability of extra cash often generates debate over how much of it the state should either spend now to help residents and various initiatives or sock away for the future, especially for any potential economic downturn. But Mills noted in April the state’s Rainy Day Fund has grown to a record high of more than $900 million, nearly reaching its legally allowed maximum.
