Sangerville

Senate bill would provide $2 billion for state and local governments in Maine

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A new bill in the U.S. Senate could provide more than $2 billion to state and local governments in Maine to help offset lost revenues due to coronavirus-related economic shutdowns.

 

The proposal, co-sponsored by Sen. Susan Collins, R-Maine, includes $500 billion for state and local governments nationally and also frees up $1.25 billion previously allocated as part of a stimulus package that passed at the end of March.

 

The Senate bill comes as an alternative to a nearly $900 billion proposal for state and local governments that passed the Democratic-led U.S. House of Representatives on Friday as part of a more $3 trillion bill. Rep. Chellie Pingree of the 1st District voted for the bill while Rep. Jared Golden of the 2nd District voted against it, criticizing it as overly partisan.

 

It would come as needed relief to many cities and towns that have seen revenues drop precipitously since the coronavirus outbreak began as retailers and restaurants shut down. The city of Portland, for example, saw non-property tax revenues drop 70 percent in April.

 

The Senate proposal includes a minimum of $2 billion per state, with allocation based on population, infection rates and lost revenues. The allocation of funds from the new bill would include at least $1.33 billion for state government as well as $333 million for county governments, which can pass some of that money onto towns, as well as $333 directly for municipalities, according to Collins’ office.

 

The bill also would allow Maine more freedom to spend $1.25 billion allocated to the states as part of an earlier $2.2 trillion stimulus package. That funding was only for state government, not municipalities. It was allowed to cover expenses directly related to coronavirus, not make up for revenue shortfalls.

 

A forecast by the financial firm Moody’s suggested that Maine’s state government could see a shock of more than $1 billion due to the virus. The state has taken several actions already to try to offset some of that loss. Gov. Janet Mills issued an April order to freeze spending and hiring except for in emergency situations, which could free up more than $250 million.

 

Maine’s rainy day fund currently sits at $257 million, according to Mills’ office. The current two-year budget was projected to produce a surplus of $113 million, but those projections are likely to be turned upside down due to the virus.

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