Commissioner Kirsten Figueroa of the Maine Department of Administrative and Financial Services is pictured near the State House in Augusta on Sept. 10. Credit: Natalie Williams / BDN

AUGUSTA, Maine — Maine will end hazard pay for certain state workers on the last day of 2020, citing an inability to use its own money to backfill expiring federal stimulus funds.

Kirsten Figueroa, commissioner of the Maine Department of Administrative and Financial Affairs, said in a Wednesday letter to the Maine Service Employees Union that the hazard pay was a stopgap agreed to when the full scope of the coronavirus pandemic was not apparent.

The situation escalates tension between Maine’s largest state employees’ union and the state. The $2.2 trillion relief bill Congress passed in March that Maine used to provide a range of hazard pay to some of its employees expires on Dec. 30. The state committed $157 million of that funding to state personnel costs, a category that includes hazard pay.

Certain employees within the correctional, agricultural and marine resources, administrative services and public health departments received $5 an hour in hazard pay, while some staff at the Riverview and Dorothea Dix psychiatric centers received an hourly increase of between $3 to $5. A new package that has passed Congress but is now held up does not continue the aid.

“No one expected the civil emergency would last longer than the federal funding necessary to provide hazard pay,” Figueroa wrote a day after Gov. Janet Mills extended the state’s civil emergency status into 2021.

Union leadership will likely gather with affected employees to consider next steps, which could include filing a grievance, said Dean Staffieri, the union president. It comes after the union filed a labor complaint against the state this week after months of pushing for more information about how Maine is managing its employees during the pandemic.

The state and union had been discussing the future of hazard pay, which has been tied to the state’s civil emergency status, in the weeks leading up to the announcement, Staffieri said. He estimated that between 500 and 1,000 of the union’s roughly 12,000 represented workers are covered under the hazard pay now.

“Certainly we think the timing is terrible,” he said.

Kelsey Goldsmith, a spokesperson for the budget department, said the state spent $1.5 million per month on hazard pay through federal funds. She said the department informed employees a month ago that the additional pay may be ending in lieu of additional federal funds and called it an “incredibly difficult” decision.

The costs would be unsustainable in the face of a roughly $650 million revenue shortfall over three years without more federal funding, Figueroa wrote. Doing so would require “significant” layoffs or cuts that would hamper the state’s ability to respond to the pandemic, she said.

An austerity-minded Legislature is likely to prioritize a combination of spending cuts and tapping reserves, with leading Democrats resisting calls from some progressives to raise taxes on wealthier Mainers. Minority Republicans would like to see large spending cuts.

Gov. Mills accepted a curtailment package from the budget department that includes $125 million in savings, including an ongoing hiring freeze. The Democratic governor is expected to put forward a two-year budget and an immediate plan to adjust state spending on Jan. 8.