The state plans to begin issuing $850 checks to eligible taxpayers this week and expects to have the vast majority mailed by the end of the month — if state officials can find enough envelopes.

The supplemental budget proposed by Gov. Janet Mills and approved by lawmakers in April allocated about $730 million for the checks as a way to use one-time surplus funds to help taxpayers cope with inflation.

The Legislature’s Appropriations and Financial Affairs Committee effectively cleared the way Tuesday for the state to begin issuing the checks by granting permission to process some of the funds ahead of schedule. The budget called for distributing roughly half this month and the rest beginning in July, Jenny Boyden, the associate commissioner of the Department of Administrative Financial Affairs, said during an appearance before the budget-writing committee on Tuesday.

But Boyden said Maine Revenue Services expects to issue about 200,000 checks a week, beginning later this week, and asked for a waiver to provide the refunds as quickly as possible.

“We are requesting the additional allotment to ensure the (Department of Revenue Services) is able to process all payments as soon as administratively feasible,” Boyden said. “Assuming there are no glitches, we could send out a significant portion of checks in June.”

One of the glitches may be a shortage of stationery. Global supply chain problems are delaying deliveries of paper products, including the envelopes needed to deliver the checks.

“One thing that may slow down processing is envelopes,” she said.

Boyden said the department has about 250,000 envelopes on hand. It ordered 800,000 more in February, she said, but delivery is expected to be delayed until late June or early July. That means the state could run out of envelopes after the second week of issuing checks.

Boyden said they are looking to use envelopes from the state treasurer’s office if the others do not arrive on time.

Concerns about the rising cost of food and gas are expected to be a central issue in this fall’s campaign cycle, with state Republican leaders looking to blame Gov. Janet Mills and state Democrats even though inflation is a national and global problem.

In response to concerns about rising costs, Mills proposed sending more than half of the state’s $1.2 billion projected budget surplus to eligible taxpayers. Lawmakers approved providing relief to taxpayers in the form of $850 checks after Republicans successfully fought to include about 58,000 households with higher incomes.

While legislative Republicans embraced the idea, former Gov. Paul LePage, who is challenging Mills this fall, called it a “gimmick.” Instead, LePage called for a reduction in – and ultimately the abolition of – state income taxes, which account for about 40 percent of the state budget. Budget forecasters have said future revenue projections are volatile, and LePage has not detailed how he would meet possible revenue shortfalls in future budgets. His past efforts to abolish the income tax were rejected by lawmakers from both parties.

The one-time relief checks approved by the Legislature will be mailed to about 858,000 Mainers. The Mills administration rejected the idea of using direct deposits to issue the checks, in part to avoid errors associated with people changing bank accounts or having their taxes filed by a professional who provided a different bank account. The state has the mailing address of all taxpayers but doesn’t have bank account numbers for a large number of them.

To be eligible, individuals must file a Maine individual tax return as a full-time resident by Oct. 31, 2022, not be claimed as a dependent on another’s tax return and have a federal adjusted gross income of less than $100,000 as individuals (or if married and filing separately), less than $150,000 as head of household or less than $200,000 for couples filing jointly.

Mills originally proposed income limits of $75,000 for an individual and $150,000 for couples filing jointly.

TAX RETURN REQUIRED

Boyden told lawmakers Tuesday that the state and community partners will work to make sure people who don’t usually file tax returns file a return by October in order to receive a payment.

A state official said it’s not known how many eligible people don’t file tax returns and would need to do so to receive a check.

“We expect that elderly and disabled Mainers living on fixed incomes (Social Security, SSDI, military pension, military disability, etc.) account for the majority of non-filers,” said Anya Trundy, chief of legislative and strategic operations at the Department of Administrative and Financial Services. “More broadly speaking, non-filers are low-income Mainers (including elderly and disabled) who didn’t earn enough income in 2021 to incur a tax liability and therefore aren’t required to file a return.”

She said the nonprofit Maine Equal Justice is conducting outreach to low-income residents throughout the summer, while the AARP is holding a series of drop-in clinics for retirees and others on fixed incomes. Several state agencies, including the departments of health and human services, education and labor, and the Bureau of Motor Vehicles, also are getting the word out. And she said the state is working with the constituent services offices of the House and Senate to ensure that accurate information about refunds is included in mailings.

“That’s two touches per address,” Boyden said.

The status of refund checks can be checked online at portal.maine.gov/refundstatus/payment