COVID-19 has had a devastating impact, not only on the health of friends, neighbors and family members, but also on our economy. As businesses across the state begin to reopen and their employees get back to work, many of them are coming off three or more months of serious financial struggles. Programs including unemployment insurance and the paycheck protection program have helped some — but not all — get through this crisis, and it may be a while before our economy truly returns to “normal,” or even anything close to it.

Our state budget has not been immune from the financial impacts of this crisis, either. Responding to the outbreak has required significant government resources. In addition, state revenues have declined because of decreased economic activity and Gov. Janet Mills’ decision to move back the income tax payment deadline to July 15 in order to conform with the federal deadline that was also moved back.

Because of these trends, on Friday, May 29, the Legislature’s Appropriations and Financial Affairs (AFA) Committee was briefed by Kirsten Figueroa, commissioner of the Maine Department of Administrative and Financial Services (DAFS) about the state’s current and anticipated financial outlook. The AFA Committee, on which I serve, is in charge of writing the state’s budget, and DAFS oversees the state’s fiscal affairs. This briefing was really the beginning of the process of figuring out how the state’s budget will need to change because of the COVID-19 outbreak. The state has also received $1.25 billion from the federal CARES Act. This money is meant to help with the state’s COVID-19 response, so we are also figuring out how to use those funds in the short term in a way that would be most beneficial to Mainers.

The news from Commissioner Figueroa was quite good. We went into the outbreak in a very strong financial situation. When the Legislature adjourned in March, we left the state with $193 million in cash and other reserves in anticipation of a possible revenue shortfall. We also added $17 million to the state’s Rainy Day Fund, which now sits at over $258 million, its highest level ever. Because of these steps, the state of Maine is not expected to experience a revenue shortfall this fiscal year. What’s more, our stable bond rating was recently reaffirmed by Moody’s Investors Service and Standard & Poor’s Global Ratings, which has recently downgraded many other states’ ratings.

That’s not to say that everything is fine. The economic hardship that many are experiencing is already causing lower state revenues, and we do not know how long this will continue. A lot of it depends on our response to the virus and our ability to continue to support businesses and workers through these difficult times so that they can get back on their feet.

Gov. Mills has asked the nonpartisan Consensus Economic Forecasting Commission and Revenue Forecasting Committee to start to figure out the full extent of the economic impact of COVID-19, and how that will affect the state budget going forward. They will issue a report in July, and I look forward to seeing what they can tell us, as it will inform how we move forward from this crisis.

If you want to share your thoughts about Maine’s state budget or our COVID-19 response, or if you need help with an issue you’re having with state government, you can call my office at (207) 287-1515 or send me an email at Linda.Sanborn@legislature.maine.gov.

Sen. Linda Sanborn currently represents most of Scarborough, along with Gorham and most of Buxton, in the Maine Senate. She previously served four two-year terms in the Maine House of Representatives, and is retired after 25 years of practicing family medicine in Gorham.