AUGUSTA — In largely party-line votes Monday, majority Democrats in the Maine Legislature approved a bill to authorize spending more than $1 billion of federal American Rescue Plan funds and Gov. Janet Mills signed it into law.

But the bill fell short of the two-thirds majority needed for emergency, or immediate, enactment, and the state will have to wait 90 days after the Legislature adjourns for it to go into effect.

Democrats split with Republicans over a portion of the bill that calls for project labor agreements covering about $20 million in affordable housing funds in the spending package. The agreements would require developers to use union workers on those building projects, which Republicans argue is anti-competitive and caters to special interests.

Republicans also said they wanted to put more of the federal funds – $100 million instead of $80 million – toward the state’s unemployment trust fund to offset possible unemployment rate increases for businesses that laid off workers during the COVID-19 pandemic. Enhanced state and federal unemployment benefits paid out during the pandemic would trigger rate increases for employers without the offsets, but Democrats said the Legislature could add to the trust fund later in the year if more funding is needed to prevent the rate hikes.

Mills, a Democrat, last week encouraged lawmakers to reach a bipartisan deal that would garner the support of at least two-thirds of the Legislature, allowing the bill to become law immediately and making the funds available quickly. With Monday’s votes, the bill will not become law until 90 days after the Legislature adjourns.

In final voting Monday, the House approved the bill, 70 to 49, while the Senate passed it 21-13.

The spending bill generated several last-minute amendments, some supported by Republicans, but they weren’t enough to lure substantial Republican support for the measure.

For example, the House voted overwhelmingly to use some of the federal funds to pay 55 percent of a retired teacher’s share of the premium costs for health insurance retroactive to June 30. That amendment was sponsored by state Rep. Billy Bob Faulkingham, a Republican from Winter Harbor. The federal funding will cover the premium costs at that rate for the next two years, but the change would cost the state’s general fund $3.7 million to $3.9 million each year after that.

But the requirement that unionized workers be used for some projects seemed to be a red line for Republicans.

Sen. Cathy Breen, D-Falmouth, Senate chair of the Legislature’s budget-writing Appropriations and Financial Affairs Committee, said the project labor agreements were an attempt to follow the U.S. Treasury Department’s guidance for use of the federal money. The agreements ensure union workers are employed on infrastructure projects.

“The purpose of the funds was to rebuild the economy with high labor standards,” Breen said, adding that only a portion of the funds earmarked for affordable housing had project labor agreement requirements and the $20 million in question represents a “tiny fraction” of the overall bill, which totals just over $980 million.

But Senate Minority Leader Jeff Timberlake, R-Turner, said Republicans wanted the money spent in the best interests of taxpayers.

“It shouldn’t have over a third of it taken out and spent on a special interest group,” he said, referring to labor unions in Maine.

Republicans also argued the bill should send an additional $20 million to the state’s unemployment trust to offset possible rate increases for employers. Democrats supported sending $80 million to the fund, while Republicans wanted $100 million.

Overall, the legislation sends large amounts of funding to a range of programs, government agencies, public colleges and businesses. It includes large boosts for student loan repayment grants for health care professionals, while also focusing on infrastructure improvements, especially broadband internet expansion for rural and other underserved communities in Maine.

The Legislature adjourned later Monday and will not return until January 2022 unless Mills calls them back for another special session or unless all four major caucuses agree to call themselves back.

Mills thanked both chambers just before they adjourned in a short speech, saying when the Legislature adjourned 16 months ago as the COVID-19 pandemic hit Maine there was much uncertainty.

“Although there have been many amendments and challenges with the American Rescue Plan bill, that bill will go a long ways towards restoring the lives and livelihoods of Maine people, businesses small and large, working families and children, giving people the right to stay here, the opportunity to make their way here in Maine,” Mills said.

Funding in the bill would also prepare workers for the future, she said.

“To be able to have connectivity and be trained up for the job that they need, the job that they want and have a career that pays well and allows them to stay here in the state of Maine and raise a family here,” Mills said to members of the House just after 8:30 p.m. “You deserve credit for that. Every one of you. All the work that you did. So, I thank you on behalf of the 1.3 million people of the state of Maine, who you represent and I represent. Thank you.”

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