Gov. Mills Proposes Lean Two-Year Budget

Governor Janet Mills has proposed a two-year budget plan of approximately $11.6 billion, which includes a $1 per pack increase in the cigarette tax, raising it to $3, and aims to generate around $80 million in revenue. This budget is characterized by cuts to health programs and a focus on maintaining key initiatives such as free community college and funding for education, despite a projected $450 million budget gap through 2027. Mills has emphasized the importance of targeted revenue increases without resorting to broad-based tax hikes, such as income taxes. The budget also addresses a $118 million shortfall in MaineCare and other financial challenges resulting from rising healthcare costs and increased enrollment. With the state’s revenue growth slowing, lawmakers face a challenging fiscal environment as they prepare to finalize the budget. Mills, who is termed out after 2026, has a narrower Democratic majority in the Legislature to navigate these budgetary constraints.