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Politics

Maine Anticipates $1.6 Billion In Pandemic Relief, If And When It's Passed By Congress

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Maine could receive $1.6 billion from the massive coronavirus relief bill Democrats are steering through Congress, an infusion of funds that would be split between the state and the local governments within its borders.

The funding is eagerly awaited by state and local officials who argue that the money is needed to continue providing services, roll out vaccines and resurrect economies hobbled by the pandemic.

The slug of federal funding could also help Democratic Gov. Janet Mills navigate a political stalemate with legislative Republicans over taxes on pandemic loans to businesses, but that will depend on when the money arrives and whether Congress further limits how it can be spent. It could also prompt the governor to make changes to her two-year budget proposal.

The state and local government funding is included in a $350 billion provision that’s part of the $1.9 trillion spending package proposed by the Biden administration now working its way through Congress. Maine’s estimated share of the money is included in a spreadsheet produced by the House Committee on Oversight and Reform.

The document includes an estimated breakdown of how the money will be directed to Maine counties and municipalities, which would account for 40% of the funds, or $640 million. The remaining $1.04 billion would go to the state, potentially giving Mills funding options to provide additional tax relief for small Maine businesses that received Paycheck Protection Program, or PPP, loans during the pandemic.

Currently, Mills’ plan would match the full federal tax forgiveness benefit for businesses that received loans of up to $1 million. Businesses with loans of $1 million or more would get partial tax relief. Roughly 250 businesses fall into the latter category, including Maine Public Broadcasting Corp., which received a PPP loan for $1.3 million last year. Her plan uses $82 million in carryover funds from the 2021 fiscal year and surplus money originally directed to the state’s budget stabilization.

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Credit Maine.gov
Gov. Janet Mills delivers her State of the Budget address virtually on Tuesday, Feb. 23, 2021.

The governor’s plan to provide tax relief to 99% of the Maine businesses that received PPP loans has not satisfied legislative Republicans, who are pushing for the full, double tax benefit the program receives in the federal tax code. At the same time, Republican activists and groups like the Republican Governors Association are hoping the debate will hobble Mills if she seeks reelection next year.

The potential for electoral implications were in sharp focus when Mills originally proposed partial tax relief on PPP loans, citing its roughly $100 million price tag. Republicans, including potential 2022 challenger former Gov. Paul LePage, blasted Mills for not doing enough to help Maine businesses.

Mills made note of her proposal during her budget address this week, but Republicans continue to push for the full relief benefit, a stalemate that could jeopardize passage of a supplemental spending plan that will need GOP votes in order to go into effect immediately and in time for the 2020 tax filings.

At the same time, Congressional Democrats are racing to pass the Biden administration’s COVID relief bill, a sprawling initiative that includes the direct aid to state and local governments. House Speaker Nancy Pelosi recently said that the bill will clear Congress before March 14 — a deadline that also marks the expiration of extended unemployment benefits for millions of Americans.

The timing is important. Maine lawmakers will convene March 10 and 11 to take up bills that have cleared legislative committees. The sessions could also include votes on the supplemental spending bill that includes tax conformity, although the agenda has not been set yet.

It’s unclear whether Mills will deliver the full PPP tax relief if the federal aid package arrives in time. Her spokesperson Lindsay Crete said in a statement that the governor is looking forward to seeing what the federal COVID relief proposal ultimately provides.

“For now, tax season is nearly upon us and we continue to hear from small businesses and accountants who are looking for certainty,” Crete said. “The Legislature needs to resolve this issue now. The Governor has offered a reasonable compromise — one that provides tax relief to all Maine businesses that received PPP, including full relief to Maine small businesses — and she urges the Legislature to pass it.”

While Republicans and business groups are pressing Mills for the full tax benefit, the governor is also receiving pressure from liberal interest groups to reject PPP tax relief. Those same groups this week called on the Legislature to support increasing state revenues by $400 million to bolster an assortment of programs.

Collins won’t co-sponsor Equality Act

Republican U.S. Sen. Susan Collins reportedly will not co-sponsor the Equality Act, a sweeping bill that would prohibit discrimination based on sexual orientation and gender identification.

Collins, a former lead sponsor of the act in the previous Congress, told the Washington Blade that revisions she requested were not made and that she might sponsor her own bill. Collins has not yet said what changes she’d requested.

Nonetheless, reaction to Collins’ position focused on a line in the Blade story that appeared to suggest she had abandoned plans to sponsor the bill because the Human Rights Campaign did not endorse her last year. HRC is a leading LGBTQ advocacy group that endorsed Collins for reelection in 2014, but ultimately backed her Democratic opponent Sara Gideon last year. The Blade later removed the reference and appended a clarification to its story.

Collins has previously opposed bans on same-sex marriage and supported same-sex couples’ right to marry in 2014, a position that helped win her HRC’s support. However, her votes to confirm some conservative federal judges, including Supreme Court Justice Brett Kavanaugh, have drawn criticism from LGBTQ advocacy groups.

Those same groups were also sharply critical of Collins’ endorsement last year by the Christian Civic League of Maine, a group that has long fought against the legalization of same-sex marriage and is a vehement opponent of the Equality Act. The Christian Civic League this week urged its supporters to call members of Congress to oppose the act, describing it as “one of the most dangerous pieces of legislation ever to come before Congress” and a bill that “will effectively issue a gag order preventing people of faith from sharing their values related to natural marriage, sexuality, gender transition for children, and more.”

The Equality Act would prohibit sexual orientation and gender identity discrimination in employment, housing, public education and an array of other federal programs.

Maine is one of roughly two dozen states that has passed similar protections for LGBTQ people.

Special election cash

No matter what happens, the March 9 special election to fill a vacant Senate seat in Kennebec County won’t affect Democrats’ control of the chamber. But that’s not stopping groups from spending significant money to influence its outcome.

As of Thursday, liberal and conservative groups spent nearly $150,000 on the race between former Democratic state Rep. Craig Hickman and former Republican Rep. William Guerrette. The spending, which is independent of the candidate campaign committees, is not quite as much as the most expensive legislative contests last year, but it’s in the ballpark. The most contested races last year drew independent spending that ranged from $200,000 to more than $300,000.

Democrats currently have a 21-13 edge in the Maine Senate.

Bellows testifies before Congress

Maine Secretary of State Shenna Bellows testified before Congress Thursday to support a sweeping voting reform bill proposed by Democrats.

Bellows is a former state senator and director of the ACLU of Maine. She was elected to her post by the Legislature in December and has taken an active role in seeking to expand voting access.

Her testimony Thursday centered on H.R. 1, a bill that would implement several of the voting laws Maine currently has, including no-excuse same-day voter registration and paper ballots to verify election counts.

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