Maine’s next governor will inherit the largest budget crisis in state history, thanks largely to poor fiscal management by Gov. Janet Mills (D), Maine Democratic lawmakers, and worse-than-expected economic forecasts released Wednesday.
The state's Sept. 30 forecast projects a $1.085 billion gap in the General Fund, which pays for schools, health care and most state operations. Roads face another $256.7 million gap. Those shortages cover the two-year budget beginning July 1, 2027.
The harsh reality is that Augusta has only limited tools for resolving the financial crisis: raising taxes (again) or cutting spending — which would be anathema to the Portland-area Democrats who currently control the State House.
The budget office explains the problem plainly: "One-time transfers and financing measures support the near-term budget but do not address these recurring gaps."
By “recurring gaps” the budget offices means the utter inability to fund Democrat wishlist policies on permanent basis unless the governor is hiding a pot of gold somewhere in the Blaine House.
The budget catastrophe is a sharp contrast from the tight fiscal ship Gov. Mills and the Democratic majority inherited.
General Fund spending approved for the current two-year budget totals $12 billion. The final budget under Republican Gov. Paul LePage totaled $7.215 billion. Democrats have added $4.785 billion, a 66.3% increase before inflation. The forecast calls for another $1.256 billion in spending in the next budget. Available resources grow just $322.4 million.
Mills would leave a projected $13.256 billion in General Fund appropriations, 83.7% above LePage's final two-year total.
The current General Fund plan ends with a projected $2.4 million balance against $12 billion in spending. That is two-hundredths of 1%. The Highway Fund finishes with $930,812. These are budget balances, separate from the state's rainy-day reserves.
Democrats have already approved dipping into those reserves. As the Maine Wire reported in July, the supplemental budget authorized roughly $292 million in withdrawals, including $155.2 million for one-time $300 checks — checks which have been documented going out to foreign nationals and even dead people.
Much like orbital mechanics can predict the collision of celestial objects thousands of years before cosmic fireworks, the slow-motion fiscal train wreck is not a surprise for those who paid attention to the trajectory of state spending and revenue.
In October 2024, The Maine Wire reported a projected $949.2 million combined General Fund and Highway Fund gap for the budget that is now underway.
The Legislature subsequently balanced that budget by raising taxes on working Mainers in the form of new taxes on Netflix, higher tobacco taxes, higher taxes on recreational cannabis (in legal markets) and a so called “millionaire’s tax.”
The Legislature suspended the state's spending limit for both current budget years. An April 10 legislative summary put appropriations $159.3 million above the calculated limit for fiscal 2026 and $191.2 million above it for fiscal 2027.
None of that is enough to keep up with the drunken-sailor-in-Bangkok spending to which Democratic lawmakers have committed future taxpayers.
Tax collections have slowed somewhat compared with the state's spending commitments, but t have not collapsed.
General Fund revenue actually rose 2.5% in the fiscal year that ended June 30 and exceeded the budget estimate. Yet the new forecast still shows a billion-dollar General Fund gap ahead — a statement as to just how unbridled Democrat spending was in the last legislative session compared to the actual resources available.
The largest drivers of the massive shortfall are predictable: Medicaid, a program rife with unchecked fraud — largely committed by foreign nationals, migrants, and so-called asylum seekers — and rising school budgets that commit the state to parallel funding increases due to the constitutional obligation that the state pick up 55% of the local education tab.
Health and Human Services appropriations rise $612.1 million to $5.154 billion in the next two-year General Fund projection. Education adds $417.5 million. Together, those policy areas account for about 82% of the $1.256 billion spending increase.
Within MaineCare, the forecast names $345 million in added costs for residential services, home- and community-based care, hospitals and federally required drug coverage. It separately identifies $29.8 million for the state's Medicare Part D obligation and $20.6 million from a higher state Medicaid matching share.
The principal Section 21 account is the $595.2 million developmental-services waiver line. Section 29's supports waiver accounts for $139 million. These are state General Fund amounts, excluding federal matching dollars. The eight-account subtotal also includes community and children's mental-health Medicaid accounts, developmental Medicaid services and behavioral-health Medicaid seed funding.
The state's commitment to fund 55% of Essential Programs and Services for public schools requires another $280.7 million in the next budget. General Purpose Aid rises $349 million overall, from $3.046 billion to $3.395 billion. The broader education policy area reaches $5.227 billion.
Department of Education expenditure reports show district general-fund spending rose $215.9 million, or 6.9%, between fiscal 2024 and 2025, reaching $3.339 billion, with Lewiston and Portland leading the way with the largest increases.
The forecast includes "the full-year cost of programs, rates and other requirements phased in during the 2026-2027 biennium." It describes adjustments for "known or predictable changes."
Acting State Budget Officer Kimberly Smith cautioned that obligations have historically been "modified, deferred, or funded below statutory levels with legislative approval." The gaps therefore are projections under current assumptions, rather than definitive shortfalls in a budget the next Legislature has yet to enact.
"Closing the projected 2028-2029 gaps will require recurring revenue, sustainable expenditure changes or a combination of both," the budget office wrote.
Seems like a great way to usher in digital moola, much like what is happening at the fed level.
“we are witnessing the bridges being built to force an unsuspecting public into digital, tokenized slavery, by allowing the conversion of fake and inflated fiat into programmable tokens that can be controlled by the issuers.”
Tokenization: Citi Bank Partners With Coinbase To Allow Convertible Fiat Dollars Into Stablecoins
https://thewinepress.substack.com/p/tokenization-citi-bank-partners-with?utm_source=direct&r=k6gro&utm_campaign=post-expanded-share&utm_medium=web