Maine plans to use $35 million of its coronavirus relief funds to help towns and tribes qualify for federal COVID-19 disaster relief.

Gov. Janet Mills announced Monday that towns and tribes will be able to use this money, which is part of Maine’s $1.25 billion in funding from the U.S. CARES Act, as the local 10 percent match required to qualify for federal disaster aid from the U.S. Federal Emergency Management Agency.

“Municipalities across Maine are on the frontline of battling COVID-19,” Mills said in a statement. “With this action, I hope state government can somewhat ease the financial burden that budget-crunched municipalities face as we continue to confront this pandemic together.”

Under federal law, eligible uses of coronavirus relief funding are limited – it can be used only to reimburse direct COVID-19 related costs incurred between March 1 and Dec. 30, 2020, that are not covered in the budget. It can’t be used to backfill a government’s revenue losses. But Mills said the U.S. Treasury Department has approved this use of states’ coronavirus funds.

The Maine Municipal Association welcomed Mills’ decision.

“We view this commitment as a step in the right direction,” said Eric Conrad, the agency’s communications director. “MMA has worked earnestly during this pandemic and before to establish a partnership on behalf of our members with state government and the current administration, and it’s gratifying to see the acknowledgment.”

The announcement met with lukewarm response from some municipal leaders who have accused Mills of waiting too long to get Maine’s share of the federal CARES Act bailout into the hands of those who can best support local residents and businesses. It is too little and too late, but it is better than nothing, said Auburn Mayor Jason Levesque on Tuesday.

The $35 million works out to be about $28 per capita – one of the lowest rates in the country, Levesque said.

“It is a good start by the governor, but it isn’t really a monumental step forwards that will allow municipalities to help their local businesses and residents,” said Levesque, a Republican. “There is still a lack of trust by this administration. Let local government do what it is best suited to do. Let us help our local businesses and residents recover.”

Auburn has spent more than $200,000 responding to the pandemic, he said, including launching an emergency meals program for low-income residents to help keep people home and reduce transmission of the virus. The city also created a $50,000 relief fund that provided small no-interest loans to city businesses to help them weather the economic slowdown.

Using the CARES Act funding to help towns and cities qualify for federal disaster relief will put harmful restrictions on how local governments can spend the money, Levesque said. For example, towns cannot distribute federal disaster relief to help businesses that had to close down during the pandemic, he said.

He compared Maine’s local distribution of federal COVID-19 aid to New Hampshire’s, which sent out a bigger share of its federal COVID-19 money to towns and cities last month, and did so with fewer strings attached, giving municipalities the freedom to use it as needed, including direct grants to businesses, so long as they followed federal guidelines.

“That’s real aid,” Levesque said. “What we’re getting in Maine is a thimble full of water in a hot desert.”

Mills said she hopes the federal government will provide more financial support and flexibility in how it can be used in the future.

Last month, the Mayors’ Coalition, which represents 11 Maine cities accounting for about 275,000 of the state’s residents, sent a letter to Mills asking her to meet with them to discuss her plan for distributing the federal funds Maine has received. Many cities, including Portland, have had to furlough employees to offset huge pandemic-related losses in revenue.

As municipalities and Maine’s business community are seeking a bigger cut of Maine’s $1.25 billion in federal coronavirus relief, Mills is facing a state budget crisis that will likely be deeper than any Maine has seen in decades. The virus has eroded the state’s economy and the tax revenues it produces, creating funding gaps for many of the essential services paid for by state government.

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