Maine begins mailing $450 relief checks
Jan. 30—The Mills administration has begun mailing $450 checks to nearly 900,000 taxpayers.
The checks are the centerpiece of the $473 million emergency winter energy relief plan that Gov. Janet Mills and legislative leaders from both parties negotiated after the November election. The package, which will be paid for with surplus tax revenue, was passed by the Legislature this month.
Maine Revenue Services mailed the first 5,000 checks on Monday and will begin mailing about 200,000 checks a week starting next Monday, Mills said in a written statement. The first rounds of checks should arrive in mailboxes this week and "the vast majority" of nearly 880,000 checks will be delivered by the end of March, Mills said.
The order of the payments is selected at random, rather than being sent in alphabetical order or based on when an individual or couple filed their 2021 tax returns, said Sharon Huntley, spokeswoman for the Department of Administrative and Financial Services, which oversees Maine Revenue Services.
As with previous rounds of relief checks, the state decided against using direct deposits because it does not have bank routing numbers for many taxpayers. Officials have said that, while 97% of taxpayers file their tax returns electronically or have them filed electronically by a third party, fewer than 50% receive their refunds by direct deposit and some of them change bank accounts from one year to the next.
In her statement Monday, Mills said that the relief package, which includes tens of millions of dollars in additional funding for low-income heating and emergency housing programs, will immediately help Mainers pay for relatively high energy costs.
"High energy prices have made staying warm more difficult for Maine families this winter," Mills said. "I thank the Legislature for approving this emergency measure and look forward to working with lawmakers to implement policies that will bring down energy costs and improve energy efficiency in the long-term."
The high costs of home heating fuel and electricity were a top concern for voters and both parties leading up to the election. While the bill was negotiated with leaders from both parties, Senate Republicans initially blocked it in December and called for a public hearing. After that hearing was held in January, three Republicans joined Senate Democrats to enact the bill, which required a two-thirds vote of the Legislature to take effect immediately so checks could be sent this winter.
DAFS Commissioner Kirsten Figueroa said in a statement that the agency met its goal of sending the checks before the end of January.
"With Maine people facing high energy costs, Gov. Mills directed us to distribute the energy relief payments as quickly as possible, and I am pleased to say we have achieved our goal of beginning to send them before the end of January," Figueroa said. "We will continue to work hard to see that all the checks are sent out as quickly as possible."
While the relief plan and $450 checks had bipartisan support, the announcement about checks being mailed prompted Republican leaders to repeat calls for permanent income tax cuts and energy reforms that will provide more long-term relief.
"I'm happy to send back the money that folks paid in," Senate Minority Leader Trey Stewart, of Presque Isle, said Monday. "Maine is at a disadvantage nationally with such a high income tax rate — if we were not taking this money from paychecks every two weeks we could avoid a discussion about whether or not to send it back. I'm confident that hardworking Mainers can make better decisions with their paychecks than 186 legislators and 4,000 bureaucrats."
With the state enjoying record revenue surpluses and its savings account flush with cash, at least one Senate Democrat has joined Republicans in calling for income tax reductions.
Maine's marginal top tax rate was 7.15% in 2020, according to The Tax Foundation, a Washington, D.C., think tank that monitors state tax and spending policies. Nine states have higher marginal tax rates, and Maine is roughly in the middle among New England states, falling between Massachusetts' 5% rate and Vermont's 8.75% rate.
At a news briefing last week, Senate Republicans also took aim at an energy policy known as net metering, which provides a financial incentive for those who install solar power but has been criticized for leading to higher electricity rates for everyone.
2021 TAX FILERS QUALIFY
The checks are being mailed to the same taxpayers who were eligible for the $850 checks last year, so people who qualify do not have to do anything to receive a check.
To receive a check, a person must have filed a 2021 Maine individual income tax return as a full-time resident by Oct. 31, 2022, and not been claimed as a dependent on someone else's return. And an individual or family's federal adjusted income must be less than $100,000 for an individual, $150,000 if filing as a head of household and $200,000 for couples filing jointly.
Other components of the emergency bill include $40 million to supplement the federal Low Income Home Energy Assistance Program, $21 million for emergency housing and $10 million for emergency heating assistance administered through community action programs across the state.
Mills began negotiating with legislative leaders shortly after winning reelection and before lawmakers were sworn into office. She originally wanted to target payments to lower income levels — individuals earning $75,000 and couples earning $150,000 — but increased the income thresholds as a concession to House Republicans.
"I'm incredibly proud of the negotiation Republicans made to get energy relief checks out to 92% of Maine taxpayers," House Minority Leader Billy Bob Faulkingham, R-Winter Harbor, said Monday. "We look forward to working with the governor and our Democrat counterparts to negotiate a bipartisan biennial budget."
While House Republicans overwhelmingly backed the measure during the first vote on Dec. 7, Senate Republican unanimously opposed it, after raising objections about the process and components of the bill that removed state funding for other Medicaid programs.
That funding, state officials argued, was only included because of an anticipated drop in federal funding. After federal funding remained intact, the state funding became a surplus, which was used to fund the emergency relief plan, officials said.
After the hearing, Republicans supported the bill without making any changes.
ADDRESSING HIGH ENERGY COSTS
The Maine Community Action Partnership said in a statement that the emergency winter relief package was one of several efforts taken over the last year to address high energy costs.
The statewide network of local action groups noted that the state's congressional delegation has successfully advocated for more LIHEAP funding and Cumberland County government allocated $1.35 million in American Rescue Plan Act funding to municipalities to help people with incomes that are too high to qualify for transitional heating assistance.
In December, two members of Maine's congressional delegation — Republican Sen. Susan Collins and Rep. Jared Golden, D-1st District — announced that Maine would receive another $6.5 million in additional LIHEAP funds on top of the state's $42.5 million allocation as a result of the federal omnibus budget bill.
Private businesses also are pitching in, the Maine Community Action Partnership said. Global Partners LP, which gave more than $2 million this winter to support heating assistance in the Northeast, including $140,000 to MCAP and United Way of Southern Maine, raised $290,000 in heating assistance, the community action group said.
A list of winter heating resources is available online through the Governor's Energy Office.
"Don't wait until your tank is empty before looking for heating assistance," said Megan Hannan, executive director of Maine Community Action.