Maine To Hand Out Almost $730 Million In Relief Check To Battle Inflation

Maine has started to send a selection of eligible residents a one-time, $850 relief check in order to help fight off inflation, but many critics have stepped forward in an effort to claim that it is only a “short-term trick” that will only end up hurting the Pine Tree State’s economy down the road.

It was reported by CBS 13 this past Wednesday morning that the state is expected to shell out almost $730 million out of its surplus budget in order to dish out around 858,000 checks to its residents all over the state. These checks will be mailed out starting this month and continue on a rollout style basis, with the last round of checks slated to go out in mid October 2022.

As noted in a released statement from the office of Maine’s Democratic Governor Janet Mills, “Maine people are grappling with the increased costs as a result of pandemic-driven inflation, ranging from higher energy costs to increased prices of everyday goods.”

“While the Governor cannot control the impact of COVID-19 on global markets, she can make sure that we deliver to Maine people the resources they need to deal with these higher costs,” continues the statement from her office.

While it seems that Mills puts the blame squarely on what she labels as “pandemic-driven inflation,” most experts seem to agree and have noted that  federal government relief checks were a major cause of the skyrocketing prices across the nation that many Americans are currently dealing with.

“The current bout of inflation stems from massive spending: in 2020 and 2021, the government spent the equivalent of 27% of GDP on ‘Covid relief’ and ‘stimulus,’ the second-largest fiscal response as a percentage of GDP of any industrialized nation,” stated the Senior Analyst for Fiscal Policy with the John Locke Foundation, Paige Terryberry, back in early January.

Prices for food at home increased 10.8%, the largest 12-month percentage increase since the period ending November 1980, according to the Bureau of Labor Statistics’ Consumer Price Index report.

“Prices for meats, poultry, fish, and eggs increased 14.3%, the largest 12-month percentage increase since a 19.5%increase in May 1979,” continued BLS. “Prices for other major grocery store food groups also rose over the past year, with increases ranging from 7.8 percent for fruits and vegetables to 11.0 percent for other food at home.”

Maine Policy Intitute, a well known conservative think tank, stated that is has given quite a few alternative solutions that could help fight the mounting inflation that would not result in increased government spending.

“Between last June, when the updated revenue projections came in, and this spring, when lawmakers were working out the supplemental budget, we advocated strongly for using the projected surplus for structural tax reform, including helping to draft a bill which would have reworked what’s known as the ‘revenue cascade’ to pare down income, sales, and fuel tax rates as greater revenues come in,’ stated the director of policy with Maine Policy, Nick Murray. “We also proposed consolidating income tax brackets and cutting rates for all taxpayers, using about as much projected revenue as the ‘relief’ checks will ultimately cost.”

Back in late December of 2021, the group chose to speak out against the sending of checks to Mainers, claimng that the state “needs radical tax reform to drive long-term, structural economic growth.”

In the same vein, the Maine Policy Institute has heavily warned against the use of any one-time payments by stating that it only gives short term relief and might help with a single bill but will not end up doing anything long term.

“Many Mainers might see the direct payments as covering some of their yearly heating bills or some of the recent spikes in their power bills, but inflation is still accelerating in all parts of the economy, although some more than others,” stated the group back in March of 2022. “The annual change in the Consumer Price Index (CPI) is up 8%, but energy prices are up over 25%. Gasoline prices remain at historic highs, though below the 2008 spike in real terms.”

“Precisely because the inflation we are experiencing is ongoing, and still accelerating, more cash in everyone’s pockets will not slow the growth of prices,” stated the group in prediction.

Maine Policy has also claimed that “lawmakers should be wary of policy that uses short-term tricks versus spurring long-term growth. There is no substitute for a healthy economy, and no measure of giveaways can stimulate the real growth that requires saving, investment, and time to create significant value.”

“Citizens who want a growing economy instead of a stagnant one must constantly keep up the pressure on politicians who would rather look to easy gimmicks than transformational reform,” stated Maine Policy back in June of 2021 seemingly speaking on relief checks.

Despite all these warning, Governor Mills’ office seems to think, “These payments are meant to help in navigating rising costs due to global inflation and supply-chain impacts, and other global economic disruptions driven by the pandemic. The payments are a one-time infusion into Maine families and will position Maine’s economy for continued post-pandemic prosperity.”

In order to be eligible for these checks, residents will have needed to have completed a 2021 tax return and be within a specific requirements.

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