The State of Maine is currently staring down a $1.4 billion revenue shortfall over the next three years because of the COVID-19 pandemic, and Gov. Janet Mills’ administration has been working on proposed budget cuts as a result. Until this week, the administration had also been sitting on roughly half of the $1.2 billion in federal funds from the Coronavirus Aid, Relief and Economic Security Act passed in March, while pushing the federal government both for more funding and greater flexibility in how the existing funding can be spent.
Congress should have delivered more flexibility and more funding by now. But it hasn’t, and the hopes of a deal appear to be fading. That reality, combined with the requirement that CARES Act funds go toward COVID-resulting costs and cannot be used to pay for already-budgeted programs, and the persistent alarm bells from Maine’s private and public sectors, means it is time for the Mills administration to get more of that relief out into the state’s economy.
And as of Thursday, that’s starting to happen in a critical if overdue way.
A new grant relief program for Maine small businesses may not be as large or have materialized as fast as some would have hoped, but it is a welcome move nonetheless.
Mills announced the creation of the Maine Economic Recovery Grant Program, which will provide $200 million in CARES Act funding to Maine small businesses and nonprofits. The program will be limited to businesses with 50 or fewer employees, among other restrictions, and grant awards will be capped at $100,000. Neighboring states such as New Hampshire and Vermont have already implemented similar efforts.
“While we know these grants cannot wholly replace or repair the economic damage this pandemic has caused, our mission is to ensure that each dollar has at least a small, direct impact on supporting these businesses and Maine’s economy,” Mills said in a statement Thursday. “We continue to hope that Congress will step up to provide greater relief to the people and State of Maine.”
Maine’s Economic Recovery Committee, a group that Mills created in May, issued a preliminary report on July 15 that called for $1.1 billion in investments to help stabilize the Maine economy. That report included a recommendation of direct economic relief grants for employers, and stressed the need for the aid to be administered “quickly and efficiently” as part of Maine’s recovery.
“Direct financial support for Maine employers to weather the disruption of COVID-19 is an urgent recommendation of the Governor’s Economic Recovery Committee,” said committee co-chairs Joshua Broder and Laurie Lachance in a Thursday statement. “We applaud Governor Mills and [the Maine Department of Economic and Community Development] for moving quickly to launch this important program based on our work and urge our federal delegation to advocate for further employer relief through Congress.”
But not all members of the committee have described this process as a quick one.
“We’re now more than a month after the committee has turned in the report to the governor, and we still don’t have an economic relief plan out there,” Curtis Picard, president and CEO of the Maine Retail Association, said at a recent subcommittee meeting. “It frustrates me, the lack of a sense of urgency.”
Hopefully Thursday’s announcement, followed by the immediate opening of the application process on Friday, underscores a greater sense of urgency. However, awards won’t be made to businesses until early October, so this much-needed aid won’t be immediate.
While it’s a very positive step that this $200 million in CARES Act funding is being set aside for these grants, it seems unlikely to fully meet the existing needs of Maine small businesses. The amount is short of the $350 million the Economic Recovery Committee recommended, and even that level of support wasn’t expected to be enough.
“The committee understands that the actual need of Maine employers far exceeds the $350 million put forward in this proposal,” reads the July report. “For Maine employers unable to access current support programs, or whose needs are now greater than what they have received to date, a state-funded economic relief program is a matter of survival.”
Given that mismatch of expected need and available resources, and the fact that the state will be assessing applications based on demonstrated need and not on a first-come first-serve basis, it’s critical that the administration be clear and consistent in its process for awarding these grants.
“Many of these organizations will be sustainable when the pandemic ends, if they survive until that point,” the committee stressed in July.
State government’s already dire economic projections will get a whole lot worse if the revenue these businesses contribute to the state drys up permanently. The same can be said about challenges facing municipal governments. Maine still has over $400 million remaining CARES Act funds, and that aid should move quickly, efficiently and fairly into Maine’s economy.