A Balanced Biennial Budget Proposal

January 17, 2025

Hello, this is Governor Janet Mills, and thank you for listening.

Last week, I delivered my biennial budget proposal to lawmakers for their consideration as we begin to chart the next two years of investments by state government in the people of Maine.

My budget proposal maintains our commitments to Maine people to provide affordable health care, to protect school funding and property tax relief, and making sure that we have good schools and good teachers, no matter a child's zip code. We want to make sure that no child tries to learn on an empty stomach. And we want to try to stabilize property taxes across the state. Those are taxes that also pay for those schools. These are all bipartisan priorities, and they've been supported by the overwhelming majority of the legislature and the overwhelming majority of Maine people.

Well, more than half of the entire state budget goes to health care and education. Roughly $4.8 billion for education alone, and approximately $4.3 billion for Health and Human Services including child welfare, mental health, hospital, nursing home and home health care, and child care costs.

So, I don't believe that government can or should be all things to all people all the time, but I firmly believe that our most important responsibility is to protect the health and safety of Maine people, especially children, and the sick, and the most vulnerable. That's the belief that's reflected in this budget proposal.

The budget proposal also reflects difficult choices that are a reality of our tight budget circumstances. Because, you know, state revenues have leveled off now after years of surpluses during and after the pandemic - surpluses driven in part by federal stimulus money. No surprise there. It's the same experience many other states across the country, red, blue and purple states, including many in New England, are facing. And another factor is because our economy is doing fairly well, we lose a portion of the federal funds that go to health care - Medicaid, specifically.

We saw all of this coming, which is why I urged lawmakers last year to reduce spending and save more than $100 million as well. Unfortunately, that proposal was rejected by the prior Legislature, and additional spending was layered onto the budget. Now there's a budget gap, as many, many states have.

So to balance the budget and to protect the long-term fiscal health of Maine, I'm proposing to make certain changes - primarily within the Department of Health and Human Services, the largest department - to cut costs, primarily for programs that haven't yet begun.

I'm also proposing an update to the excise tax on cigarettes and related tobacco products. You know, cigarettes are a leading cause of cancer, heart disease, and stroke, as we all know. And when more than one-third of Maine cancer deaths each year are attributable to smoking, having the cheapest cigarettes of nearly every state in New England still just doesn't make sense for the State of Maine. It's time to change that. That's why my budget proposal includes a $1 a pack increase to cigarettes, which puts us in the middle of the New England states.

Keep in mind, I'm not proposing - and I do not support - broad-based tax increases, such as to the income tax or sales taxes.

So with this budget proposal, we've taken a balanced approach, one that maintains core programs like education and health care, one that raises revenues in a very targeted way to benefit public health, and one that makes difficult changes to various programs to save money to the taxpayers. There are difficult decisions to be made in the coming weeks and months, and none of this is easy, but I know this new Legislature shares my commitment to enacting a balanced budget that is good for Maine people, and good for the fiscal health of our state. I look forward to working with both parties to achieve just that, as responsible lawmakers offer constructive feedback in the coming months on this detailed document.

This is Governor Janet Mills. And thank you for listening.