By Michael Shepherd - March 2, 2022
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Good morning from Augusta.

What we're watching today

Maine's projected revenue surplus keeps growing. Forecasters do not think the good times will last forever. A huge projected surplus fueled by billions in federal aid got a huge boost on Tuesday when the state Revenue Forecasting Committee said yet another $412 million would come in through mid-2023. That is on top of the $820 million surplus that Gov. Janet Mills relied on in her recent spending proposal including relief checks, $100 million for transportation and money for health care providers.

The Democratic governor responded by adding $200 million to her relief-check proposal, which would now send $750 to 800,000 Mainers by year's end. It was in response to a Republican demand for half the surplus to be given back to taxpayers, but some in the minority party have begun to resist the idea of checks in the heat of the 2022 gubernatorial campaign. Former Gov. Paul LePage, Mills' likely opponent, has called the idea a gimmick and said income taxes should be reduced with the excess money.

Advocates for lasting changes certainly think today that their hand is stronger with a surplus sitting well above $1 billion. Legislative Republicans are now more likely to get specific about their goals in budget talks. As I noted here on Monday, a crop of legislative Democrats more progressive than Mills will see more breathing room for top spending items.

Budget forecasters, however, have cited unprecedented economic volatility that has made revenue predictions harder. A state economic forecast issued last month noted inflation, rising energy prices, interest rate increases and global political unrest as factors that will constrain growth in the U.S. and Maine. The state's aging demographics have not been offset much by rising in-migration. Forecasters raised future revenue projections as well on Tuesday, but Maine is expected to bring in less over the next two years than in this budget cycle.

Mills gave a sort of pre-rebuttal to arguments that the state should give back or spend more after the surplus was revised on Wednesday. Budget Commissioner Kirsten Figueroa said the state will "act prudently and cautiously, delivering much-needed relief to Maine people and maintaining a balanced budget." The governor is in a good position whether she deserves credit for it, but the Legislature and electorate will have their say soon.

News and notes

— House Speaker Ryan Fecteau, D-Biddeford, is on the road in southern Maine to roll out a bill that would implement recommendations of a state panel on housing affordability. There will be plenty in the sweeping bill for lawmakers to agree on, but cities and towns will resist a prohibition on local ordinances capping the annual number of home building permits. Fecteau will hold events between Wells and Brunswick to tout the measure between 9 a.m. and 12 p.m. Two Republicans, Auburn Mayor Jason Levesque and Rep. Amy Arata of New Gloucester, will speak at the last event, the speaker's office said.

— Republicans continued to tie vulnerable Maine Democrats to the unpopular President Joe Biden around Wednesday's State of the Union address. A Maine Republican Party news release around the speech called it a "Mills/Biden" address, saying the governor's policies are "indistinguishable" from Biden's and both have "failed Mainers." House Republicans' campaign arm released an ad today linking Rep. Jared Golden of Maine's 2nd District to Biden on higher energy prices. It does not point to any particular vote or action, however. Golden called on Biden to boost domestic oil production before the speech.

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What we're reading

— Nearly one-quarter of Mainers have likely contracted COVID-19, according to a federal study. It suggests that Maine's official case count has missed about 43 percent of cases since the beginning of the pandemic, a number that is in line with national estimates. A Maine Center for Disease Control and Prevention spokesperson said the finding was "not a surprise."

— Russian Mainers have complicated feelings about President Vladimir Putin's invasion of Ukraine. Few will say they unequivocally support the war. One Russian Orthodox priest said he was dismayed by Western media coverage. At a deli owned by a Russian citizen in Westbrook, a Ukranian customer recently lashed out at an employee verbally and was escorted out by another patron from Bulgaria, underscoring some tension even here.

— Residents of Penobscot County, the third-most populous in Maine, have said top priorities for $30 million in federal COVID-19 aid include affordable housing, mental health and substance use disorder treatment, broadband expansion and county jail renovations. But the money cannot make a big dent in all of those areas and smaller towns want the county to share money for nuts-and-bolts infrastructure upgrades. A plan for the money will come later this year.

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Follow along today

9 a.m. The Veterans and Legal Affairs Committee will hold hearings on marijuana bills, including one from Assistant House Majority Leader Rachel Talbot Ross, D-Portland, that would allow people with drug convictions to participate in the medical and adult-use markets. Watch here.

10 a.m. Hearings on Mills' supplemental budget continue with a morning meeting of the appropriations and insurance committees. The tax committee is scheduled to join appropriators at 1 p.m. for another hearing on tax elements of the proposal. Watch here.

The labor panel will work on several bills, including one from Ross that would increase the salary threshold to qualify for overtime and is opposed by business groups including the Maine State Chamber of Commerce. Watch here.

11 a.m. The environment panel will work on water-quality bills, including one from Senate President Troy Jackson, D-Allagash, that looks to shield a Fairfield dam and the paper interests that rely on it from any future attempts to remove it. The Mills administration and environmentalists oppose the bill. Watch here.

2 p.m. A high-profile Jackson bill to block the planned closure of the Maine Veterans Homes facilities in Caribou and Machias and provide money to cover recent deficits will get a public hearing before the veterans panel. Politicians from the congressional delegation down to the local level have rallied around the homes in recent days since the plans were aired last week. Watch here.

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📷 Lead photo: Gov. Janet Mills listens as Kara Hay, CEO of PenquisCAP, speaks during a news conference on Nov. 4, 2021 at General Insulation in Brewer. (BDN photo/Linda Coan O'Kresik)

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