AUGUSTA, Maine — Maine may speed up distributing planned $850 checks that have emerged as a bipartisan initiative in Gov. Janet Mills’ latest budget proposal, even though logistical hurdles lie ahead of attempts to deliver them electronically for the first time.
Most Mainers could get checks beginning in June if lawmakers approve the payments billed as a way to assist taxpayers amid high inflation and gas prices in the next month before the Legislature is scheduled to leave Augusta for 2022. The idea has bipartisan support, but the method could be the main sticking point.
Republicans have pushed for electronic payments as a quicker alternative to paper checks. But Maine has not used direct deposit for such checks before. The state agency responsible for sending the checks has warned of logistical challenges due to “old systems.”
It comes with the political backdrop of the 2022 election. The idea of returning part of Maine’s $1.2 billion surplus to taxpayers was first floated by Republican lawmakers last fall, and Mills credited them when she adopted it in her supplemental budget. The possibility of sending checks to taxpayers months before an election has encountered some pushback, including from the campaign of former Gov. Paul LePage, who is challenging Mills later this year.
Department of Administrative and Financial Services Commissioner Kirsten Figueroa told the Legislature’s budget committee Monday that the agency was “not ready to say” whether it might be able to send some of the proposed payments by direct deposit rather than paper checks.
Maine sent $285 relief checks via mail to more than 500,000 residents over roughly seven weeks in November and December last year. Whereas last year’s checks targeted workers, the proposed relief payments this year have broader eligibility, encompassing retirees and certain self-employed workers. Roughly 800,000 Mainers could get payments, with only those who earned more than $75,000 last year — or $150,000 if filing jointly — not eligible.
Figueroa told lawmakers that Maine Revenue Services was working to determine “how much programming” would be needed to make electronic payments instead of checks. Some administrative work will be required either way because the state has made changes to its system since the last time checks were sent, she said.
Provided that the proposed budget passes with two-thirds support, the agency is now targeting a start date of June 1 to begin sending checks. That is a month sooner than the Mills administration had previously indicated.
But any switch to direct deposit could pose challenges. About 400,000 tax filers — or roughly half the number of people who are eligible for the checks — submitted direct deposit information to the state when filing taxes, Figueroa said. Roughly 12 percent of those changed their bank information from their previous tax filing, and the agency may look to only send to bank accounts used for consecutive filings so money does not go to the wrong place.
She also raised concerns that some Mainers pay taxes ahead of time with third-party filers, and said the state would need to ensure that the check was sent to the person, not the filer in those cases.
“I know that we talked about some administrative costs of sending checks and letters, but if we send a payment to the wrong account, it will never come back,” Figueroa said. “So that would be a loss.”
Rep. Sawin Millett of Waterford, the lead Republican on the Legislature’s budget committee, introduced an amendment last week that would have pushed the state to use electronic payments but was tabled by Democrats on the panel. He pointed Monday to the potential for the state to use other lists, such as state employees or those receiving state pensions by direct deposit to ensure faster payment.
“We can cut through some of the administrative costs, the paperwork and the delays,” Millett said.