Maine’s budget surplus provides another $65 million for affordable housing

Maine State Government Finishes Fiscal Year 2023 with $141 Million Surplus

The state government of Maine ended the 2023 fiscal year with a surplus of $141 million, marking another year of strong revenues that have exceeded forecasts. This surplus has prompted Republican lawmakers to renew calls for income tax cuts.

Record High Rainy Day Fund

The surplus funds have filled the state’s budget stabilization account, also known as the rainy day fund, with a record high of $968.3 million. Additionally, a new law included in the current two-year budget allocates $65 million of the surplus for affordable housing programs.

Smart Financial Choices for Future Downturns

Although the surplus revenues are a result of stronger-than-expected economic activity following the pandemic, Governor Janet Mills, a Democrat, stated that her administration’s budget decisions ensured that the maximum amount of surplus funds were set aside to prepare for future downturns.

Governor Mills said, “Maine is better prepared today to withstand an economic downturn than at any other time in state history because of smart, deliberate financial choices by my administration.”

She further emphasized the importance of balanced budgets and historic investments in improving the lives and livelihoods of Maine residents. The administration will continue working hard to deliver the necessary resources and support for the people of Maine to thrive and succeed.

Republican Criticisms and Democratic Response

Republican lawmakers have repeatedly criticized Governor Mills and the Democratic-controlled Legislature for not reducing the state’s income tax despite the recurring surpluses. Democrats argue that such tax cuts would have negative consequences when the economy slows down and revenues decrease.

Unprecedented Revenue Levels

Maine has been experiencing unprecedented levels of revenue since the start of the pandemic in 2020. Like other states, Maine has benefited from significant federal spending aimed at addressing COVID-19 and its aftermath. Despite concerns about inflation, the state has seen low unemployment, rising wages, and strong consumer spending. These factors have generated higher-than-forecasted income and sales tax revenues.

Surplus Allocation

The state’s budgets are based on revenue projections from a nonpartisan revenue forecasting commission. As revenues have consistently exceeded projections, the commission has increased its projections accordingly. Even after revising last year’s budget and distributing rebate checks to residents, Maine still ended the fiscal year with a $141 million surplus.

Out of the surplus, $52.4 million was added to the rainy day fund, reaching its statutory maximum of 18% of actual General Fund revenue. The remaining additional revenue will be deposited into various accounts prioritized by the Legislature, including one for housing security.

Housing Programs and Investments

Governor Mills announced that $65 million of the surplus will be used for Maine Housing programs. This includes $35 million for building affordable housing in rural areas through the Rural Affordable Housing Program and $30 million for incentives in the Low Income Housing Tax Credit Program.

These investments will strengthen the administration’s commitment to historic housing investments in the current two-year budget. The budget includes new state funding for a housing first program, which provides stable housing to chronically homeless individuals, enabling them to address other challenges such as addiction or mental health issues.

Highway Bridge and Capital Fund

An additional $3.9 million of surplus funding will be deposited into the Highway Bridge and Capital Fund.

Importance of the Rainy Day Fund

The rainy day fund is crucial in helping balance state budgets during periods of revenue shortfall. It prevents deficits that would otherwise lead to cutbacks in state services.

Kirsten Figueroa, commissioner of the Department of Administrative and Financial Services, praised the achievement of fully funding the Budget Stabilization Fund. She stated, “Having these funds set aside positions the state to meet its commitments to Maine residents in the event of a rainy day.”

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty
• SDG 8: Decent Work and Economic Growth
• SDG 11: Sustainable Cities and Communities

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 1.5: By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social, and environmental shocks and disasters.
• Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries.
• Target 11.1: By 2030, ensure access for all to adequate, safe, and affordable housing and basic services and upgrade slums.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 1.5.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population.
• Indicator 8.1.1: Annual growth rate of real GDP per capita.
• Indicator 11.1.1: Proportion of urban population living in slums, informal settlements, or inadequate housing.

Table: SDGs, Targets, and Indicators

Explanation:

The article discusses Maine’s state government’s surplus revenues and the allocation of funds for affordable housing programs. This connects to SDG 1 (No Poverty) as it aims to reduce vulnerability and build resilience for the poor and those in vulnerable situations. The specific target under SDG 1 is Target 1.5, which focuses on reducing exposure and vulnerability to economic shocks and disasters. The indicator mentioned in the article, Indicator 1.5.1, measures the number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population.

The article also highlights the strong economic growth in Maine, which relates to SDG 8 (Decent Work and Economic Growth). The target under this SDG is Target 8.1, which aims to sustain per capita economic growth. The indicator mentioned in the article, Indicator 8.1.1, measures the annual growth rate of real GDP per capita.

Furthermore, the article mentions the allocation of funds for affordable housing programs, which aligns with SDG 11 (Sustainable Cities and Communities). The target under this SDG is Target 11.1, which focuses on ensuring access to adequate, safe, and affordable housing. The indicator mentioned in the article, Indicator 11.1.1, measures the proportion of the urban population living in slums, informal settlements, or inadequate housing.

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Source: pressherald.com

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