Maine Ends Fiscal Year with $148 Million Surplus While State Employees Still Struggle with Pay Gap and Stagnant Wages

The state of Maine ended the 2026 fiscal year with a surplus of $148 million, according to the Maine Department of Administrative and Financial Services. Of that additional money, $26.2 million was put into the state’s rain day fund, restoring it to the maximum legal amount. Under state law, the rainy day fund can account for no more than 18 percent of the previous year’s general fund revenue, or $1.05 billion. $291 million from the rainy day fund will be used for a number of projects, including one-time $300 relief checks that will sent to about 500,000 Mainers. That deduction will leave more than $764 million in the fund.

Currently, 10,000 state workers with the Maine Service Employees Association have been working without a contract for over a year because the Mills administration refuses to offer wages that keep up with the cost-of-living crisis. The Mills administration has refused to accept a fact-finders’ wage recommendation of 2.5 percent in year one, 3 percent in year two, and a $1,250 signing bonus.

The administration has claimed it cannot afford to pay fair wages, but this is the fifth consecutive year the state has had budget surpluses while state employees continue to struggle with stagnant wages, a pay gap and challenges with recruitment and retention. The state had surpluses of more than $152 million in 2025, $93.5 million in 2024, $141 million in 2023, and $595.1 million in 2022. Meanwhile, the union argues, low wages leave too many state workers struggling, fuel rampant vacancies and unsafe workloads, and drive the state to hire private contractors who can earn up to four times more for the same work.

"It just does not make sense to me that the Mills administration is not investing in its workforce," said MSEA member Jonathan French. "With an already well-known retention and recruitment crisis, the state should be doing everything it can to ensure that it has a workforce that is able to do the work. Instead, we see constant shifts toward the private sector to fill the employment gap, furthering a dependence on private sector companies to do state work, which costs taxpayers more. It is a completely inefficient and unsustainable way to operate state government. Yet, once again we have surplus money being diverted to the General Fund for future use, and to private sector contractors, instead of into the state salary plan for maintaining the state workforce."

MSEA has filed eight Prohibited Practice Complaints against the administration for dragging its feet in negotiations. French said that by refusing to invest in its workforce, the state is sending a message about how much it values its employees, compared to the work that they do.

In March, MDOT worker Amanda Moore told lawmakers that state workers are really struggling with the rising cost of living. “We know that many of our colleagues qualify for SNAP, Medicaid and heating assistance, even though they may be working 2 or 3 jobs, just to keep the bills paid and lights on," she said.