This piece was first published on X. Read and share it here.
Gov. Janet Mills just dropped a 111-page supplemental budget that significantly grows spending, kills a key business tax program, rejects federal tax relief (such as no tax on tips or overtime), drains the rainy day fund, and buries policy landmines in the fine print. All while doling out another round of useless $300 checks so she can say “you’re welcome.”
Let’s be clear about what’s happening here.
State spending has grown 65% since Mills took office. In that same time period, Mainers’ wages have only grown by 33%. This was triggered by higher-than-expected tax revenue, but the governor now needs more and more of our money to keep her tax-and-spend train running. This supplemental budget is just how she plans to get it.
Our team at Lead Maine looked into Mill’s proposal and found ten provisions that raise costs on Maine families and businesses, expand government, and undermine our state’s economic future… Read on!
1. Suspending the spending cap… again!
Part P of the budget is one sentence long.
One sentence. That’s all it takes to remove the only guardrail on state spending!
Part P suspends Maine’s statutory General Fund appropriation limit for FY2026-27.
That’s the law that is supposed to cap how much the Legislature can spend in any given year.
This isn’t the first time it’s been done, and that’s part of the problem. If you suspend the spending cap every time you want to spend more, you don’t have a spending cap, you have a suggestion. And Augusta Democrats treat it like one.
2. Draining $333 million from the rainy day fund for one-time spending.
Here’s where it goes:
- $218.5 million for another round of $300 “affordability” checks (this is the fourth round of checks under Mills!)
- $69 million for government housing programs through Maine State Housing Authority
- $25.3 million for public defense services
- $5.9 million for school bus safety retrofits
- $4.6 million for SNAP and MaineCare technology
- $500K for a regionalized building code enforcement pilot
The rainy day fund sits at roughly $1.03 billion right now, its statutory maximum. If we spend the full amount from Mills’ wishlist, it will drop to about $700 million. The kicker? In order to do this, Mills is conveniently ignoring the law that says you can only use the money from the rainy day fund for “extraordinary circumstances,” none of which face our state in 2026.
Every dollar goes to one-time spending, not permanent relief.
Think about that. If the state has $200 million to hand out $300 checks for some, it has $200 million to cut income tax rates for everyone. But a tax cut would benefit Maine families every year, not just once. A $300 check lets the Governor hold a press conference to bolster her campaign for Senator.
One-time checks are political theater. Permanent tax relief is policy.
Mills chose theater.
3. Killing the BETR program, raising taxes on businesses that invest in Maine.
Part O sunsets the Business Equipment Tax Reimbursement (BETR) program, a way for Maine businesses to recoup local property taxes paid on qualifying equipment, things like machinery, computers, and production tools.
This is a tax increase on capital investment, full stop. When you tax business equipment, you’re telling companies: invest somewhere else. And that’s exactly what will happen.
The Maine Forest Products Council estimates the cut hits roughly 60 forest products companies, totaling $3.1 million annually for that sector alone, the equivalent of about 52 full-time jobs. And that’s just ONE Maine industry!
Across all industries, the BETR program costs the state approximately $8 million per year.
$8 million. In a $11.5 billion budget. Gov. Mills is willing to sacrifice Maine jobs for 0.07% of total spending.
These are lifelines Maine businesses have been counting on, but Mills is pulling the rug out from under them… and it’s not the only instance.
4. Delaying the federal tax cuts Congress already passed.
Part K is the tax conformity section, and it’s where the budget gets sneaky.
Last year, Congress passed the One Big Beautiful Bill Act. It included meaningful tax relief: a larger standard deduction, charitable deductions for non-itemizers, R&D expense deductions for businesses, and no tax on tips, overtime, or certain car loan interest, AND deductions for seniors.
Maine needs to update its tax code to match.
Mills’ budget eventually does conform… to some parts. But instead of giving Mainers immediate relief, it phases it in over years:
- Standard deduction: Stays at current Maine levels for 2025. Partial increase in 2026. Full federal match only in 2027.
- Charitable deduction for non-itemizers: 50% in 2027. Full deduction only after 2027.
- R&D expense deductions: Immediate for small businesses (good), but phased in over five years for larger businesses (2026-2030).
- No tax on tips or overtime: NEVER conforms to these common sense provisions to help Maine workers.
The administration estimates full, immediate conformity would cost roughly $400 million. That sounds like a lot until you realize the inflation-adjusted spending increase between two-year budgets is more than $600 million.
In other words, the state could afford to give Mainers *every* dollar of their federal tax cuts right now, just by holding spending growth to the rate of inflation.
But that would require spending discipline. Gov. Mills has none.
5. Decoupling Maine from DC’s immediate expensing, punishing businesses that invest.
Mills is also proposing to decouple Maine from federal rules allowing businesses to immediately expense “qualified production property.” Under the federal code, a manufacturer that buys new production equipment can write off the full cost in the first year. It’s an incentive to invest!
But Mills says: not in Maine. Instead of allowing the immediate write-off, her proposal would force businesses to spread the deduction over multiple years by creating a state-level “addition modification” that claws back the federal benefit in year one.
Translation… If you’re choosing between building a new production line in Maine or New Hampshire, New Hampshire just got cheaper.
At a time when Maine desperately needs private investment, this provision makes the state less competitive for exactly the kind of capital spending that creates jobs.
This combined with sunsetting BETR is a one-two gut punch for Maine businesses.
6. Raising hospital taxes which you’ll pay for in higher healthcare costs.
Part L updates Maine’s hospital tax to assess it based on 2024 revenues instead of 2022. The tax rate stays at 3.25% of total operating revenue, but since hospitals earned much more money in 2024 than in 2022, switching to the newer base year means they’ll pay a bigger total tax.
This is a tax increase that never gets called a tax increase. It just shows up in your insurance premiums and out-of-pocket costs. Hospitals pass these costs through to patients and insurers so YOU pay the bill.
And here’s the kicker: the hospital tax exists to draw down federal Medicaid matching funds. So the more hospitals are taxed, the more federal money flows into MaineCare. This fuels the same MaineCare spending growth that already consumes one out of every four state dollars.
It’s a feedback loop for the state: tax hospitals more, draw more federal money, expand the program, then tax hospitals more. Families end up paying more for care at every step.
7. Inflicting a brand-new $10,000-per-lot fee on mobile home park sales.
Part RRR creates a new “transfer assessment” that charges buyers of manufactured housing communities $10,000 per lot when the property changes hands. For a 100-lot park, that’s a $1 million transaction fee… simply unaffordable!
The exemptions tell you everything about the intent: Maine State Housing Authority is exempt. Municipal housing authorities are exempt. Tenant cooperatives are exempt.
So the government is exempt, while private businesses are expected to pay through the nose.
The target is private investors, specifically larger companies that buy and operate mobile home parks. Whatever you think of those investors, the economic reality is simple: a $10,000 per-lot surcharge makes it MUCH more expensive to buy and maintain manufactured housing communities. That cost gets passed to tenants, or it discourages investment entirely.
Here’s the irony: Part T of this same budget spends $69 million from the rainy day fund on government housing programs, funded by you, the taxpayer. So the Governor is draining the state’s savings account for government-run housing, while simultaneously making it more expensive for the private sector to invest in the most affordable housing type in the state.
This is NOT housing policy. It’s a shell game that makes life less affordable for Maine families.
8. Mandating $50,000 minimum teacher salaries… and forwarding the bill to your property taxes.
Part SSS establishes escalating minimum salaries for certified teachers: $45,000 starting in 2027-2028, $47,500 in 2028-2029, and $50,000 starting in 2029-2030.
There’s just one problem… the state doesn’t fund it.
This is a mandate imposed on local school districts. Districts that can’t meet the new minimums from existing budgets will have two choices: raise property taxes or cut other spending. Rural districts, where teacher salaries are lowest and tax bases are thinnest, will be hit hardest.
And let’s put this in context. We already spend more than triple per student than we did in 2000, even though 17% fewer kids attend public schools.
Only one in four Maine fourth-graders can read at grade level.
We have an accountability crisis while funding education at the highest level EVER. Mandating higher salaries without addressing outcomes just adds cost to a system that is already failing by its own metrics.
If Augusta wants a $50,000 minimum teacher salary, Augusta should pay for it. Sending the bill to local property taxpayers is cowardice disguised as compassion.
9. Spending $3.1 million to implement the new red flag gun confiscation law.
Part A of the budget includes about $3.1 million over the biennium to implement the recently passed Extreme Risk Protection Order Act.
This is a law that allows courts to order firearms seized from individuals who have not been charged with, let alone convicted of, a crime… no due process!
Mills wants funding for 5 new State Police positions (a Corporal, a Lieutenant, and 3 Specialists), 5 new police vehicles, plus additional administrative support for the Department of Public Safety.
Whatever your position on the policy, the fiscal reality is clear: this establishes a permanent new enforcement apparatus with ongoing personnel and equipment costs that will only grow.
You may not have voted for it, but if Mills has her way, you’ll be paying for it!
10. Making “free” community college permanent.
Part QQQ repeals the existing temporary tuition waiver statute and codifies the Maine Free Community College Program as permanent. All Maine Community Colleges must waive tuition for eligible students: kids who’ve lived in Maine for at least 12 months and graduated high school within two years.
The fine print says availability is “limited to the amount appropriated.” That sounds like a safeguard, but it’s not. Once a program becomes permanent statute, the political pressure to fund it fully never goes away. That’s the whole point of codification: to make it nearly impossible to roll back.
But reminder, there is no such thing as “free” stuff!
This converts a temporary spending commitment into a permanent obligation on Maine taxpayers. And it is happening in a supplemental budget, not a standalone bill with its own public hearing and debate where the taxpayers can weigh in!
That’s how government grows… quietly, buried in fine print, one “small” provision at a time.
The Pattern Is Clear
Every one of these provisions serves the same purpose: feeding the spending machine.
The spending cap is suspended so there’s no limit. The rainy day fund is drained for one-time giveaways. Federal tax relief is delayed so the state can keep the money longer. Business tax programs are eliminated to generate revenue. Unfunded mandates are pushed to local property taxpayers. New fees are imposed on the private sector. And new spending programs are made permanent.
This is what a government addicted to spending looks like. Governor Mills has grown the state budget by 65% in eight years. Wages have only grown by 33%. Homes are 78% more expensive.
And still, it’s not enough! Mills and Augusta Democrats need more from you, more from your business, more from your town’s property tax base, and more from the rainy day fund we might actually need someday.
Meanwhile, Maine is the 5th most-taxed state in America. If you make under $100,000, you pay more in taxes here than in any other New England state. New Hampshire, with a similar population, spends about 30% less per person with little difference in services, and a booming economy.
Maine families deserve better:
- A government that lives within its means.
- Permanent tax relief instead of election-year gimmicks.
- A business climate that rewards investment instead of punishing it.
And a budget process that doesn’t bury policy landmines in 111 pages of fine print!
This should go without saying… but I’ll say it anyway.
Mills’ budget deserves ZERO Republican votes.