Politics
Our political journalists are based in the Maine State House and have deep source networks across the partisan spectrum in communities all over the state. Their coverage aims to cut through major debates and probe how officials make decisions. Read more Politics coverage here.
Maine’s next governor will take office facing a gap of more than $1 billion in their first two-year budget, according to a forecast released by Gov. Janet Mills’ administration Wednesday.
The projection covers the budget running from mid-2027 through mid-2029. The governor’s successor must begin building it after Election Day and will be tasked with sending a balanced proposal to lawmakers by early February.
That sets up a governing challenge for the Nov. 3 winner. All three candidates have pitched costly property tax relief and other promises that the forecast does not count. Republicans have warned that Democratic budgets leaned on tax increases and the state’s rainy day fund rather than controlling costs, a debate the next governor inherits.
The $1.085 billion General Fund gap is about 70% larger than the $636.7 million one the same report projected two years ago, which was Maine’s first major gap in more than a decade. The Highway Fund, which pays for roads and bridges, faces a separate $256.7 million gap.
The gaps measure how far projected revenue falls short of what current law would require the state to spend. Maine has handed a hole of this size to a new governor before. Independent Gov. Angus King, now a U.S. senator, left his successor, Democrat John Baldacci, a roughly $1 billion gap when he left office in 2003.
Democrat Hannah Pingree, a former House speaker and Mills adviser, is favored to succeed the term-limited Mills. She has led Republican Bobby Charles in every public poll since the June primary, with independent state Sen. Rick Bennett of Oxford far behind both of them.
The last gap was closed in stages. Mills opened the 2025 session by asking lawmakers to quickly cover a $118 million MaineCare shortfall. In April, Democrats passed a $529 million budget adjustment without Republican votes that included a 2% tax on income over $1 million and $155.2 million for $300 relief checks, drawn from the rainy day fund.
Rep. Ken Fredette of Newport, a former House Republican leader who sits on the Legislature’s budget committee, predicted in a Press Herald op-ed last week that the gap would approach $1 billion across the state and transportation budgets. The state budget alone came in above it.
“Democrats spent Maine into a projected $1.3 billion budget hole, and taxpayers should not be handed the bill for their failure to control spending,” House Minority Leader Billy Bob Faulkingham, R-Winter Harbor, said in a Thursday statement.
MaineCare costs are projected to rise $345 million. Holding state aid at 55% of K-12 education costs would add $280.7 million. A falling teacher pension bill offsets $176.5 million. Fuel taxes are the Highway Fund’s largest source, and the 30-cent-per-gallon gas tax has not been raised since 2011.
The candidates’ plans would add costs on top of those numbers, although they could raise taxes and adjust programs. Pingree wants to double the homestead exemption. She would also let towns tax out-of-state second-home owners at higher rates, a change that would likely require amending the Maine Constitution.
Charles wants to raise the $25,000 exemption to $100,000 and cut income taxes. On Monday, he proposed taking more than $200 million from the rainy day fund to suspend the gas tax, match federal heating aid and send schools $100 million for heating.
Bennett wants an income-based cap on property taxes and would raise MaineCare ambulance rates to double what Medicare pays in his first budget. He has criticized Charles’ heating plan as a one-time withdrawal that doesn’t fix underlying costs, the same concern the forecast raises about recent budgets.
In the report, Department of Administrative and Financial Services Commissioner Elaine Clark cautioned that the figures are estimates and not realized shortfalls. Lawmakers routinely fund obligations such as school aid below the levels set in law, and the report is meant as a starting point for budget talks.
The next marker comes after the election in December, when the Revenue Forecasting Committee issues the updated forecast the governor-elect will use to build that budget.
“It gives us a starting point, and then we do the job of balancing the budget as we do every two years,” outgoing Sen. Peggy Rotundo, D-Lewiston, the chair of the budget committee, said of the report in a statement.