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Governor Mills Proposes Budget Change Package Investments in Housing, Child Care & Nursing Homes [ [link removed] ]
March 29, 2024

Governor Janet Mills today unveiled a budget change package that invests in some of the most urgent challenges facing Maine people, including housing, child care, and long-term care, in a fiscally-responsible and sustainable way.

The change package proposes one-time funding to build more housing for Maine people, to deliver grants to child care providers, and to accelerate nursing facility rate reform, among other initiatives.

It also proposes the creation of a fund to support the purchase of mobile home parks by their residents, who are vulnerable to being displaced from their homes, or having rents suddenly increase, from a change in park ownership. Since December, residents of four mobile home parks in Maine ? totaling more than 1,000 households ? have been notified by their park?s owner of an intent to sell.

The Governor crafted her change package after the nonpartisan Revenue Forecasting Committee recognized approximately $108 million [ [link removed] ] in additional one-time funding for Fiscal Years 2024 and 2025.

This increase in one-time revenues is primarily driven by strong corporate tax revenues, which can be volatile and should not be relied upon for a long-term budgeting outlook like individual income or sales tax revenues. It comes as State of Maine revenues are projected to remain relatively flat through the next biennium, underscoring the importance of making prudent one-time investments, rather than ongoing appropriations, and saving funding so that the state can continue to cover the increasing costs of ongoing expenditures currently in law.

?This fiscally responsible proposal aims to address some of the most urgent challenges Maine people are facing, like access to affordable housing, child care, and long-term care,? *said Governor Janet Mills.* ?And it aims to tackle these critically important items in a financially sustainable way, ensuring that, when taken with my previous proposal to save money, the State of Maine can meet its ongoing commitments in the next biennium.?

?This proposal advances the Administration?s approach of investing in Maine?s most critical needs in a fiscally responsible way,? *said Kirsten Figueroa, Commissioner for the Department of Administrative and Financial Services*. ?As revenues remain largely level, this proposal will help Maine people while ensuring the state?s long-term fiscal standing so that we can meet our obligations in the future.?

*Highlights of the Governor?s proposed change package include*:


* *Building More Housing*: Adds $22 million in one-time funding to build more housing in Maine. The proposal dedicates $11 million to the Rural Affordable Rental Housing Program, created by the Governor and the Legislature, and $11 million to leverage an additional $11 million in Federal low-income housing tax credits. This increase in funding is estimated to create more than 150 new housing units. It also builds on the $10 million the Governor has proposed in her supplemental budget for the Affordable Homeownership Program, which will allow for an estimated 130 new single-family homes in Maine.
* *Protecting Residents of Mobile Home Parks*: Adds $5 million in one-time funds to MaineHousing to establish a housing preservation fund to support the purchase of mobile home parks by their residents. Mobile home parks provide affordable housing for thousands of Maine people, including many who are older, disabled, or living on fixed incomes, who are vulnerable to housing displacement from a change in park ownership. This fund will provide low or no-interest financing to entities, such as resident cooperatives, to complement other financing options to support mobile home park purchases in Maine.
* *Supporting Maine?s Child Care Sector*: Authorizes $11.8 million for one-time grants to child care providers to support their stability while the expanded Child Care Affordability Program is implemented. Grants could be used, among other purposes, for additional or retroactive stipends to support staff recruitment and retention, tuition scholarships for children of child care staff, and health and safety improvements. The change package also authorizes $1.1 million in one-time funding for Head Start providers. These proposals allow for full and effective investment of all of the $12.9 million in General Funds previously appropriated for early care that could not otherwise be spent in this fiscal year due to the delayed implementation of the biennial budget and other reasons.
* *Improving Transition to Nursing Facility Payment Reform*: Adds $23.2 million for a new Nursing Facility Reform Transition Fund to support nursing facilities as MaineCare implements comprehensive rate reform. The Fund would serve as a source of the state share of MaineCare payments from 2025 to 2027, to support nursing facilities while rate reform is being phased in. It will support time-limited payment policies to all eligible facilities that reward quality or achieve permanent staffing targets, for example. This investment, when added to the funds already proposed in the supplemental and biennial budgets, yields $31 million in General Funds for nursing facility rate reform in this biennium and is expected to leverage Federal funding for a total of $97 million.
* *Funding Unexpected MaineCare Pharmacy Costs*: Adds $5.5 million in General Funds for the state share of unexpected additional and one-time pharmacy costs due to the cybersecurity attack on United Health?s Change Healthcare. The Office of MaineCare Services took action to help MaineCare members access needed medication, including temporarily authorizing pharmacies to provide prescriptions for up to 30 days, following the disruption of its pharmacy claims system that started on February 21, 2024. This funding would support MaineCare?s response to the disruption.
* *Strengthening Effort to Establish a Kennebec County Crisis Center*: Adds $550,000 to increase the start-up funding** **for the substance use disorder treatment center in Kennebec County included in the biennial budget passed last year. To encourage greater interest from potential service providers, the proposal increases the amount of start-up funding from $400,000 to $950,000 and allows greater flexibility in the type of services offered by the center. This increased start-up funding is aligned with the amount needed to establish the existing Crisis Receiving Center in Portland and the supplemental budget initiative to establish a Crisis Receiving Center in Lewiston.

The change package also proposes $17.5 million for the Maine Emergency Management Agency (MEMA), $15 million of which is dedicated towards covering the State-match required to receive Federal funding for storm recovery and $2.5 million of which is dedicated to MEMA in light of largely stagnant funding levels, primarily from Federal sources, and to offset other funding reductions in the last government funding bill passed by Congress.

The change package proposes an increase of $4.1 million in funding for the Maine Milk Commission, for a total of $9.4 million in fiscal year 2025, consistent with the proposal advanced by the Legislature?s Committee on Agriculture, Conservation and Forestry. This builds on the one-time volatility funding of $3 million in fiscal year 2024 proposed by the Governor in her supplemental budget.

The change package builds on the Governor?s supplemental budget proposal, which funds housing, education, health care, drug treatment, public safety, and mental health initiatives. Vitally, it also proposes saving $107 million to protect the State?s long-term fiscal health as other states face budget shortfalls.

In total, LD 2214 and the change package propose $26 million in appropriations and $77 million in transfers. As required by the Maine Constitution, the proposal is balanced and would result in an overall General Fund biennial budget of $10.438 billion, a limited increase from the Governor?s original proposal of $10.413 billion. The General fund biennial budget continues to provide Maine people more than $285 million in ongoing tax relief (PDF) [ [link removed]*24285%20million%20tax%20relief%20savings.pdf ] per year.

The Governor?s Change Package can be found on the Bureau of the Budget website [ [link removed] ].

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