The state of Maine sets aside its budget surplus in case of emergency, but we are not seeing the budget surplus come back to support struggling Mainers and our institutions.
The Maine Budget Stabilization Fund, or the “Rainy Day” fund, is where any state budget surplus is allocated, similar to a personal rainy day fund. Surplus money that isn’t spent gets set aside in the event of an emergency. Through fiscal responsibility and federal allocation during the COVID-19 pandemic, the state has set quite a bit of money aside for the Rainy Day fund. In late 2023, Governor Janet Mills announced that the rainy day fund had reached its cap at $968 million.
The state ended the fiscal year with a $141 million surplus. Because there is a limit on how much money can actively be deposited into the rainy day fund, the state allocated the extra funds to affordable housing projects. That is amazing and helps Mainers benefit from the fiscal responsibility of their state leadership.
I think that having a large rainy day fund is both critical to the economic security of a state government and a display of the fiscal responsibility of the state over the past few years. Is the state being too fiscally conservative? A common way to rank rainy day funds state by state is for how long the state could run solely on the rainy day fund, but I find that this is a flawed form of thinking as our state currently isn’t running at its highest standard. While the state works hard to contribute to the rainy-day fund, it must recognize that the rainy day is happening right now with the state’s public universities.
I recently attended the president’s State of the University address. What I found is that the University of Maine is underfunded. This university can do much more, but it is held back by hiring freezes and deferred maintenance. Investments into deferred maintenance are coming this summer, but in order to recruit and retain students during an enrollment slump, we need to work fast to ensure the health of this university.
This university system is critical to the economic development of Maine; I cannot envision our state without the University of Maine. It’s time the state allocates rainy day funds to their public university system. I do not mean funding engineering research or new sector-specific funding. It’s time for the state to take this surplus and provide general funds for the betterment of the entire University of Maine system.
