Governor Mills Unveils Supplemental Budget Proposal Advancing Affordability Agenda & Maintaining Core Investments for Maine People

Governor’s proposal includes key measures to address affordability, maintain core State commitments such as school funding, and make critical investments in education, health care, public safety and economic development

Governor Janet Mills today unveiled her Administration's supplemental budget proposal for the Fiscal Year 2026-2027 biennium. 

The proposal includes Governor Mills’s three-part Affordability Agenda, announced during her State of the State Address on January 27, to deliver near-term financial relief for Maine people, increase new housing construction to reduce costs, and create new career opportunities for Maine students by making community college free permanently. 

The proposal also maintains the Governor’s core commitments to Maine people, such as funding the State’s 55 percent share of education costs and maintaining access to health care. It also further conforms with new Federal tax laws, and makes important investments in education, public safety, and economic development. 

These initiatives build on nearly $1.1 billion in direct tax relief for Maine people and businesses that are included in the 2026-2027 State budget, such as the Earned Income Tax Credit, the Dependent Exemption Tax Credit, the Student Loan Tax Credit, and the Property Tax Fairness Credit. A full list of tax relief programs is available here (PDF). 

Today’s supplemental budget comes after Maine’s nonpartisan Revenue Forecasting Committee in December projected additional revenues of approximately $165 million in FY 26 and $83.3 million in FY27, for a total of $248.4 million over the current biennium. 

“Through this proposal, we are delivering financial relief to Maine people, addressing high housing costs, and making free community college – a highly successful program for Maine students – permanent,” said Governor Janet Mills. “At the same time, we are maintaining core commitments, like funding for education and for health care, that help lower costs for folks across our state. My guiding belief as Governor has always been that our strongest asset is the people of Maine – and that’s why this budget, like those in the past, seeks to invest in and support them. I look forward to working with the Legislature in the coming weeks to enact a balanced budget that supports Maine people and protects the fiscal health of our state.”  

“The Governor is fighting to address rising costs and their impact on the health and welfare of the people of Maine,” said Elaine Clark, Commissioner for the Department of Administrative and Financial Services. “The Governor, working closely with the Legislature, has delivered balanced budget after balanced budget, each with a sharp focus on improving the lives and livelihoods of Maine people. This supplemental continues to do the same, delivering important investments maintaining the core commitments that Maine people expect from their government.” 

The supplemental budget proposes to advance the Governor’s Affordability Agenda, including:  

• Financial Relief for Maine People: $218.5 million from the record-high Budget Stabilization Fund for a one-time $300 Affordability Payment to an estimated 725,000 Maine people, consistent with three prior rounds of relief checks, totaling $1.3 billion, distributed by the Administration and Legislature to deal with high costs. 
• Housing Construction: $70 million from the record-high Budget Stabilization Fund for the Governor’s “American Dream” housing initiative to build an estimated 825 additional affordable homes for Maine people and bring down record high housing prices. 
• Making Free Community College Permanent: Since it began in 2022, more than 23,000 students have participated in the free community college program, with nearly 2,000 continuing their education through the University of Maine System and other four-year institutions. In addition to making free community college program permanent, the Governor’s budget proposal includes a one-time $2.5 million investment from the General Fund to support students now enrolled in the program, after the Legislature opted to make community college free only through the high school graduating class of 2025.  

Other highlights of the Governor’s supplemental budget include: 

Supporting Maine Schools, Teachers and Students: 

•  Maintaining 55 Percent Education Funding: $46 million in General Fund to continue meeting the State's obligation to pay 55 percent of local education costs and help hold down property tax increases. The 55 percent threshold was met for the first time in Maine's history in 2022 under Governor Mills. If approved as proposed, the General Fund appropriation for General Purpose Aid (GPA) in FY27 will be $1.557 billion, an ongoing annual increase of more than $459 million over the FY19 cost of $1.098 billion. 
• Increasing Minimum Teacher Pay: The Governor’s budget proposes a phased-in approach to raise minimum teacher salaries, starting with an increase to $45,000 in fall 2027, then to $47,500 in fall 2028, and to $50,000 in fall 2029. This effort would build on the Governor and Legislature’s work to increase the minimum teacher salary to its current level of $40,000 in 2019.
• Implementing a Cell Phone Ban in Schools: $700,000 from the General Fund for the Maine Department of Education to support schools with transitioning to implement the cell phone ban proposal announced by Governor Mills in her State of the State address.
• School Bus Safety: $5.9 million in one-time funding from the record-high Budget Stabilization Fund to install safety enhancements – anti-pinch door sensors and/or crossing arms – on approximately 2,300 Maine school buses following the tragic deaths of two Maine children last year. This updated budget figure accounts for additional buses identified for upgrades since the initial announcement.  

Advancing Economic Innovation: 

• Investing in Innovation: $2 million from the General Fund for University of Maine researchers and graduate students to undertake research and obtain competitive Federal grants and other funding to train workers in emerging areas, including, but not limited to, advanced manufacturing, artificial intelligence, life sciences, robotics, and rural health care delivery. 
• Adapting to Artificial Intelligence: $6.7 million from the General Fund to Artificial Intelligence initiatives, including implementation of recommendations of the Governor’s Task Force on Artificial Intelligence, which aim to bolster AI innovation in Maine while strengthening guardrails around AI's effects on Maine's people, economy, and institutions. 

Supporting the Health and Welfare of Maine People:  

• Maintaining Health Care for Maine People: $62 million from the General Fund in FY26 and $54 million in FY27 – which amounts to 4 percent of the total cost of Medicaid – to account for increases in health care costs due to inflation, the utilization of services, and the needs of patients.
• Helping Seniors With Prescription Drug Costs: $9 million from the General Fund to repay the federal government, as required by Federal law, for a portion of the prescribed drug expenditures for older Mainers who are enrolled in both Medicaid and Medicare and whose Medicaid drug coverage has otherwise been paid for through the Medicare Part D program.
• Supporting Reproductive Health Care Providers: $2.25 million from the General Fund for reproductive health care providers in Maine after significant cuts by the Trump Administration.
• Maintaining Critical Services Amid Federal Changes: $14.7 million from the General Fund to address a significant Federal cost shift to states for MaineCare and SNAP. This funding will ensure continued access to health care and food benefits for eligible individuals.
• Upgrading Technology: $4.9 million in one-time funding from the Budget Stabilization Fund to pay for technology and compliance upgrades at the Maine Department of Health and Human Services to implement unfunded mandates of the so-called “One Big Beautiful Bill Act.” 
• Supporting Needs of Individuals: $3.4 million from the General Fund for services for individuals in crisis and services for individuals with intellectual and developmental disabilities.
• Strengthening Emergency Shelters: $1.5 million annually from the General Fund to MaineHousing to further support 40 shelters in Maine’s statewide homeless shelter network. These funds would prevent shelter closures that could lead to increased homelessness in various communities, including Bangor and Presque Isle.  

Strengthening Public Safety:  

• Implementing the Extreme Risk Protection Order Law: $2.26 million from the General Fund to implement the red flag law approved by voters in November 2025.
• Tracking Sexual Assault Kits: Approximately $267,000 annually from the General Fund for the Department of Public Safety to establish, operate, and maintain a tracking system for all completed forensic sexual assault examination kits, including an inventory of all kits and an annual report on the tracking system. This funding is consistent with legislation, LD 1816, to establish a kit tracking and inventory system that is now pending before the Legislature.
• Legal Defense: $25.4 million in one-time funding from the Budget Stabilization Fund for the Maine Commission on Public Defense Services to fund private attorneys and non-counsel vendors who provide indigent legal services. 

Helping Maine Veterans:

• Supporting Maine’s Veterans’ Homes: $3.1 million from the General Fund for investments in the six Maine Veterans’ Homes located across the state. 
• Improving the Homestead Exemption for Veterans: The budget proposes to create a simpler property tax exemption for veterans by removing complicated service period and age/disability requirements that exist in the current exemption and provide new levels of additional exemptions. 

Addressing Energy Costs and Grid Reliability: 

• Strengthening the Electric Grid: $3 million from the General Fund to extend and expand the Maine Department of Energy Resources’ Grid Resilience Grant Program and leverage future Federal funding, which supports affordability by lowering electricity costs while increasing the reliability and resilience of the grid. 

The Governor’s supplemental budget also includes additional tax conformity items as outlined can be found here (PDF).

As enacted last year, the Fiscal Year 2026-2027 biennial budget is $11.65 billion. If passed as proposed, the $275 million supplemental would result in a total General Fund biennial budget of $11.93 billion. 

Under the leadership of Governor Mills and the Legislature, the Budget Stabilization has increased to a near record high amount and statutory maximum of $1.03 billion, an increase of more than $820 million since taking office in 2019. As proposed, the Budget Stabilization Fund balance will stand at more than $700 million, a robust and healthy amount to help the State of Maine withstand any potential economic downturn. 

The Governor's FY26-27 Supplemental biennial budget proposal does not include any tax increase. The full budget will be available on the Bureau of the Budget website by the end of the day.