LEWISTON, Maine — Maine will put $20 million in federal money into a two-year grant program for small businesses struggling to regain revenue lost during the COVID-19 pandemic.
The program is part of the state’s plan to spend nearly $1 billion in direct aid under the $1.9 trillion American Rescue Plan Act passed by Congress in the spring. Democrats in the Maine Legislature passed the roadmap along party lines in July and it became law on Monday.
An unprecedented amount of federal spending has buoyed the budgets of Maine and other states, charging Gov. Janet Mills’ with giving out more than $2 billion in federal aid to date. The Democrat is putting the business aid in the new plan at the center of economic development efforts entering a 2022 reelection bid against former Gov. Paul LePage, a Republican.
Mills held a news conference in Lewiston on Monday to highlight $139 million in initial spending under the plan. That includes the business grant program alongside $80 million for the state’s unemployment fund and $39 million more for a program subsidizing health care costs for businesses and their workers who use small-group insurance plans.
The new grant program, the only one of the three programs that had not been fleshed out by Monday, will begin with $5 million this year in grants to businesses seeing 20 percent lost revenue in 2021. Another $15 million will be available next year. Applications open on Nov. 1.
Officials did not know how many businesses might be eligible for the program but Department of Economic and Community Development Commissioner Heather Johnson said it was designed for businesses left out of previous aid programs. She pointed to industries including dry cleaners and charter bus services that depend on business travel.
The $80 million injection into the unemployment insurance fund follows two other deposits totalling $300 million. Mills said the state estimated the tax rate that funds the system could have increased by up to 60 percent without the funding, although a final rate for the coming year will not be available until the end of the month.
“These three things in particular will help small businesses stay alive and thrive and expand,” she said.
Mills and her administration had the authority to give out $1.25 million in federal aid last year, which included another $200 million grant program for small businesses and infusions into an unemployment fund sapped by record claims during the pandemic.
Lawmakers had their say on the new $983 million plan after the governor put forward an initial plan for the funds focused on infrastructure and business aid. The Legislature’s budget committee largely followed that blueprint. Minority Republicans disagreed with the overall size, leading Democrats to pass it with simple majorities, delaying the funds for three months.
All of the federal aid on top of continuing budget surpluses will set the stage for a high-stakes election year in Augusta. Republicans have already unveiled a proposal to send some surplus revenue back to taxpayers, while LePage has said Mills should have directed more early aid to nursing homes that have struggled during the pandemic.