Despite surplus, Gov. Mills and Democrats seem poised to raid Maine’s rainy day fund
When supplemental budget negotiations began earlier this session, Gov. Mills urged the creation of a $100 million set-aside fund, to allow her administration to practice “fiscal restraint” as she put it. This fund’s purpose is to fund already approved programs during the future, despite the $139 million surplus that had been previously identified in December and Maine’s maxed out Budget Stabilization Fund, also known as the rainy day fund.
But now that negotiations are under way about how to pay for the damage left by recent winter storms, the Mills administration and legislative Democrats seem poised to fund these repairs not with money from the current unallocated surplus, but instead from the rainy day fund.
LD 2225, a governor’s bill, originally intended to spend $50 million of Maine’s rainy day fund on storm damages. Now, with amendments, this sum has risen to $60 million. As its name suggests, the Budget Stabilization Fund exists to offset budget shortfalls and similar revenue emergencies, and state law requires it only be used for these purposes. Raiding the fund to pay for storm damage is a significant departure from the fund’s intended purpose, especially when there’s unappropriated money on hand to cover these expenses.
Gov. Mills’ attempt to skip over the available surplus and take money directly from Maine’s real rainy day fund while artificially propping up her own reserve shows that fiscal restraint is merely a slogan rather than a principle of her administration. The Legislature should either amend LD 2225 to change the funding source or cut spending from elsewhere to pay for the repairs.
When the Joint Committee on Appropriations and Financial Affairs (AFA) considered LD 2225 on March 21, Republican Sen. Rick Bennett commented, “It doesn’t make a lot of sense to use the Budget Stabilization Fund…for a purpose for which it wasn’t intended when we have now, suddenly, an appropriation surplus.” Sen. Bennett voted against the bill in committee and wrote one of two Republican minority reports that support amending the bill’s funding source.
LD 2225 has now passed out of committee, and no Republican concerns were addressed. Its passage in committee is alarming because this bill is labeled as “emergency legislation,” which Article 4 of the Maine Constitution requires to have a two-thirds majority vote in both the House and Senate to immediately pass into law, otherwise there could be a longer wait for storm relief.
If Republicans’ previous statements are any indication, the bill in its current form may not get the bipartisan support needed to reach a two-thirds supermajority, which could delay the disbursement of relief funds. Had Democrats in the AFA Committee changed the funding source, the bill likely would have sailed through both chambers easily.
Also worrying is the alternative: If enough Republicans decide to compromise on fiscal responsibility to act quickly on storm relief, the governor’s bill might actually pass with a supermajority which would have negative consequences for the future security of Maine’s rainy day fund and potentially set a dangerous fiscal precedent.
Hopefully, the Legislature will advance alternative legislation or a floor amendment to fix this budgetary issue. If not, the Mills administration will have taken another substantial step away from fiscal restraint in favor of reckless spending.