AUGUSTA, Maine - The four top leaders of the Maine Legislature have reached a budget deal that they are now trying to sell to their House and Senate colleagues. Whether they are successful will be decided in a series of votes that will occur into this evening.
Taxes and welfare were the issues that kept the four leaders working though the last two weekends to reach a deal that they have now presented to their party caucuses and believe they have the votes to finally pass.
First to taxes: Most Mainers will see an overall decrease in their taxes. That is accomplished by some paying more in taxes and the export of more of the state’s tax burden to tourists through increased sales taxes. Instead of going down to 5 percent this July, as in current budget law, the tax rate will stay at 5.5 percent. There will also be an increase in what prepared foods are taxed, and the rate on the lodging tax will go up from 8 percent to 9 percent.
Senate President Mike Thibodeau, a Republican from Winterport, says an overall tax cut for Mainers was one of his goals in the closed-door negotiations. Another goal, he says, was avoid a broadening of the sales tax that was proposed by Gov. Paul LePage in his budget.
"I wasn’t a big fan of making the guy that plows my driveway be a sales tax collector," Thibodeau says, "and at the end of the day we were able to avoid that. To me that was important. I wanted to make sure we didn’t create a burden on a whole bunch of small businesses throughout our state to become sales tax collectors."
House Speaker Mark Eves, a Democrat from North Berwick, says the plan will result in a significant income tax cut for middle-income Mainers and will also provide aid to the poorest Mainers that pay income taxes by providing for an Earned Income Tax Credit that is refundable starting in 2016.
Eves says the negotiations were difficult but needed after the Appropriations Committee hit an impasse, with four House Republicans voting against the budget package. He says time was running out to get a plan adopted before the current budget law runs out, and that would have meant a shutdown of some state services.
"It was unresolved and the leaders stepped in to try and come to an agreement that we all could agree to, and today we are here doing that," Eves says. "We have reached an agreement that will have enough support to pass the House and the Senate."
The other contentious issue was welfare reform. The leaders agreed to changes that will limit welfare benefits to non-citizens, or asylum seekers, to 240 days. That’s the time it usually takes for person to get a decision on their status from federal immigration officials. The General Assistance formula is also changed so that the state only reimburses 70 percent of the cost of the program after a trigger is reached. That's down from the present 90 percent reimbursement rate.
House Republican Leader Ken Fredette, from Newport, says he didn’t get all he wanted in the deal, but neither did the Democrats. "I am concerned about the level of spending in this budget. It’s an increase of $300 million over the prior biennium," he says. "I think that is a big concern of my caucus. But my caucus was also concerned there was not an income tax reduction package in here. We did some minimal welfare reform in there."
Senate Democratic Leader Justin Alfond, of Portland, says most of the budget was agreed to unanimously by the Appropriations Committee, and the four leaders stepped in only when it was clear that some issues could not be resolved in the usual way.
"These are not normal times in the state of Maine with our chief executive and with what is happening with our budget in the state," Eves says, "and the leadership team took over and we are going to bring it to the finish line. And it’s going to be a better budget for Maine people."
In fact, out of the hundreds of pages of the budget, which sets policy and spends more than $6.5 billion, the leaders' amendment is just 38 pages. If two-thirds of both the House and Senate agree, the budget will go to Gov. Paul LePage, who has not been involved in the budget negotiations.
Leaders say a veto is likely, and they believe if the budget survives all of the votes to reach enactment, it will also survive the potential veto.
