Gov. Janet Mills’ proposal to add $900 million to the state’s two-year budget will fund a wide range of state programs and services. The single biggest winner, by far, is transportation.
The budget proposal includes $400 million for roads, bridges and other infrastructure over the next two years. It is a record-breaking investment that Mills said will eliminate the need to borrow money this year for expensive upgrades, while also unlocking as much as $1 billion in federal funding.
It’s not unusual for the state to seek voter approval each November to borrow $50 million to $100 million for transportation projects. Nor is it unusual for Mainers to approve them. But Mills’ budget proposal would make that unnecessary this year. If approved by the Legislature, it would be the second straight year voters won’t be asked to borrow money to fix or upgrade the state’s transportation networks.
“We’re making historic investments in Maine’s physical infrastructure,” Mills told reporters gathered in her Cabinet Room Wednesday, stressing that her budget proposal does not raise taxes. “We’re not suggesting the need for any (general obligation) bonding at this point.”
Using budget surpluses to finance capital improvements such as road projects means the state avoids having to pay interest on bonds, reducing the burden on the state budget in future years.
Half of the $400 million being allocated for transportation projects is coming from the General Fund. That $200 million is the largest direct General Fund investment in any two-year budget in state history, according to the Department of Administrative and Financial Services. The other half of the increase would be transferred from a separate transportation account, according to the Maine Department of Transportation.
DOT Commissioner Bruce Van Note said Thursday that he is finalizing a work plan that will list specific projects in line for the proposed funding over the next two years and will present it to the Legislature’s Transportation Committee on Jan. 24. He said he could not identify specific projects Thursday, but said the governor’s budget, plus federal infrastructure funding passed by Congress, are both “game changers” for transportation in Maine.
“This will allow us to not only make due, but make progress,” Van Note said. “We’ve kind of flipped from defense to offense.”
Van Note said the general fund allocation will largely help the department meet existing needs for road and bridge repairs, and help pay for higher construction costs caused by rising consumer prices and wages.
The other $200 million from the TransCAP Trust Fund, he said, would be used to leverage federal funding, which could be used for forward-looking bicycle-pedestrian trail and rail projects, including a new train station in Portland and perhaps a multimodal train and bus station off the Turnpike in West Falmouth that is in the very early stages of discussion.
“It’s a very exciting time to be in transportation,” Van Note said.
Last summer, state officials canceled several costly transportation projects because of rising costs for fuel, material and labor. Those seven projects, totaling $28 million, included a bridge replacement in Old Town, a traffic signal project in South Portland and paving projects in Old Town, Augusta, Bangor, Byron and Shapleigh.
Since 2018, the Maine Department of Transportation also rejected bids for 59 projects because of high costs, including more than a dozen projects in 2019 that came in at least 40% higher than original estimates.
Mills dedicated $100 million for transportation projects in last year’s supplemental budget to catch up on languishing projects. That funding was in addition to the $50 million already included in the budget.
But the need continues to outpace the state’s investment, Mills said.
“We’ve made progress on fixing our transportation system, but anyone can look around and see that there’s a lot of work to be done,” Mills told reporters. “And that’s why I want to go after every available federal dollar that we can.”
The money could help unlock up to a $1 billion in federal infrastructure funding, which requires states to match a certain percentage of the federal funding.
The federal funding is part of the $1 trillion infrastructure bill passed by Congress and signed by President Biden late in 2021. That bill supports investments in roads and bridges, public transportation, passenger and freight rail, electric vehicles, modernizing electrical grids, airports and water systems.
Additional infrastructure spending was included in the federal omnibus spending bill approved last month.
While much of the highway budget is dictated by the DOT’s annual work plan, Sen. Ben Chipman, D-Portland, the chair of the Legislature’s Transportation Committee, said he will be advocating for significant investments in public transportation, including bus service, trail systems and rail, in addition to roads and bridges.
Chipman said he’d like to look into making the Amtrak Downeaster train service more appealing to commuters in Brunswick and Saco-Biddeford and create new commuter rail service from Portland to Lewiston/Auburn and possibly to the Rock Row development in Westbrook.
Chipman said that Maine could receive as much a $4 in federal funding for every state dollar spent on transportation projects eligible for the federal match, creating an even larger pool of resources to pull from.
“The federal match rate is really good,” Chipman said. “We will be able to make some real investments in transportation projects unlike any session I have served in in the Legislature. It’s going to be amazing to see what we’re able to do.”