Governor Janet Mills listens as Kara Hay, chief executive officer of PenquisCAP, speaks during a press conference on Nov. 4, 2021 at General Insulation in Brewer. Credit: Linda Coan O'Kresik / BDN

PORTLAND, Maine — Gov. Janet Mills gave a cautious answer when asked how much of Maine’s $800 million revenue surplus she will recommend spending this month as lawmakers returned to Augusta for a 2022 session to again be shaped by the COVID-19 pandemic.

Mills, speaking Tuesday during a celebration of the sale of Portland’s Union Wharf, said the pandemic is still her primary area of concern, and was keeping its potential effects on the economy in mind when considering how to shape her short-term budget proposal likely to be unveiled near the end of the month.

“I know this pandemic can change things abruptly … and it can affect our economy in the weeks and months to come,” she said. “So I want to be very cautious about what we do and how much we depend on the revenue projections at this early stage.”

That mindset that will likely create tension as lawmakers try to wrestle through more than 150 bills and hundreds left over from last year when they return to the State House on Wednesday. Majority Democrats have their own ambitious plans for the 2022 session, while Republicans back using $400 million of the surplus projected over the next two years for another large refund to taxpayers in the spirit of the $285 checks that went out to over 500,000 Mainers this winter.

That relief is critical to helping Mainers overcome inflation, said Rep. Sawin Millett, R-Waterford, a former budget commissioner who sits on the Legislature’s appropriations committee.

While he said it is far better to begin a year with a surplus than a deficit, his caution was geared toward not allowing the fall election — in which Mills is likely to face former Republican Gov. Paul LePage and all legislative seats are up — to stand in the way of a consensus spending deal.

“Is it important to avoid? Absolutely,” he said. “Is it possible? Maybe.”

One area where the economy’s effect is apparent is the state’s efforts to increase its MaineCare reimbursement rates for home and community based services to 125 percent of the minimum wage and cost of living increases, a cornerstone of Mills’ health care agenda.

The increase was funded last session, but she will request an additional $28 million from the surplus to deliver that bump this year, citing inflation’s effect on those dollars. Mills has also promised to devote $7.6 million of the supplemental to impose wage adjustments for nursing and residential care facilities through July.

Legislative Democrats have many of their own ideas as well. House Speaker Ryan Fecteau, D-Biddeford, said his side will be focused on reforming the child welfare system and addressing complex political issues like a tribal sovereignty push that has been stalled over the last two years amid opposition from Mills and disparate interests including casinos.

But he also saw room for the Legislature to help fight the pandemic, such as making sure at-home test kits are readily available, trying to get more people vaccinated and bills meant to provide mental health treatment insurance coverage for children.

“We must do what we can to address the various facets of the impact the virus has had on our communities from a prevention standpoint, from an economic standpoint, and from a mental health perspective for everyone, but in particular, on our frontline health care workers,” he said.