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Mills’ $10.3 billion, two-year budget revives perennial tax versus spending debate

Gov. Janet Mills speaks at her inauguration ceremony, Wednesday, Jan. 4, 2023, at the Civic Center in Augusta, Maine.
Rebecca Conley
Maine Public
Gov. Janet Mills speaks at her inauguration ceremony, Wednesday, Jan. 4, 2023, at the Civic Center in Augusta, Maine.

As expected, Gov. Janet Mills didn’t propose sweeping new initiatives or massive expansions of existing programs as part of her two-year budget proposal.

Instead, it was the total dollar figure of the governor’s budget proposal — $10.3 billion — that drew the most initial attention. And Republican legislative leaders pointed to what they view as a glaring omission in Mills’ plan: tax cuts.

"Clearly, if we've got over a billion dollars more in-hand than we had just two years ago when we went through this exercise, the people of the state of Maine are taxed too much," said Senate Minority Leader Trey Stewart of Presque Isle.

So begins what has become a biannual — and sometimes annual — policy fight in Augusta between Democrats and Republicans over taxes and spending.

For her part, Mills painted her budget as a balanced, fiscally responsible plan that invests in critically important programs, including education, roads, health care and housing, without raising taxes.

“We have been governing cautiously and, I believe, in a fiscally prudent manner over the last four years, making sure that even in the hardest of times during the pandemic, we lived within our means,” Mills said. “This budget proposal continues that important practice.”

But will merely keeping taxes level be sufficient to win over Republicans? That’s unclear.

Mills’ plan is $1.6 billion more than the last budget adopted by the Legislature two years ago. And the dominant reason for that increase is because the Legislature, working with the Mills administration, has already used massive revenue surpluses to pay for programs with bipartisan support. Mills now proposes tapping into anticipated surpluses over the next two years to maintain or expand those programs (such as free community college tuition and free school meals for all K-12 students) while continuing to return 5% of tax revenues back to municipalities as “revenue sharing” and continuing to meet the state’s obligation to cover 55% of K-12 costs.

(You can find a much more detailed breakdown of what is in the governor’s budget blueprint here.)

Ultimately, the Legislature will decide whether to spend that money over the next two years. The challenge facing Democrats and Republicans on the budget-writing committee in the coming months will be striking enough of a balance to win the progressives and conservatives needed to secure two-thirds approval in the House and Senate.

Hitting that two-thirds or supermajority threshold is important for reasons both practical and political.

First, the practical: it takes two-thirds majorities in both the House and Senate for any new law, including a budget, to take effect immediately. Otherwise, most laws take effect 90 days after the Legislature adjourns, which likely translates into sometime in September or October this year.

But Maine state government’s new fiscal year begins July 1. And without an enacted state budget, the government can’t operate.

The Democrats who control both chambers of the Legislature could pass a “majority budget” without needing any GOP votes. But they’d need to do that by about April 1 to avoid at least a partial government shutdown on July 1.

Politically speaking, however, majority budgets can downgrade or destroy the willingness of the minority party to work in a bipartisan fashion on anything else.

It certainly didn’t help the atmosphere in Augusta in 2021 when Democrats went ahead and passed a majority budget as the COVID pandemic grinded on. Republicans and Democrats eventually came together to pass a secondary or supplemental budget with two-thirds support months later. But the effects lingered: Republicans, including former Gov. Paul LePage, used the Dems majority budget as a talking point during the 2022 campaigns.

As of this week, all sides appear eager to avoid another such situation.

“Absolutely, our goal is to get a two-thirds budget,” said House Minority Leader Rep. Billy Bob Faulkingham, R-Winter Harbor. “The goal that the governor has stated is she wants a two-thirds budget. And that’s just what everybody wants to see. That’s the way the Legislature is supposed to function. And I think that we can do that as long as we go through the process.”

“This budget envisions two-thirds enactment and I see no reason why it shouldn’t achieve that,” Mills told reporters on Wednesday.

McCarthy gets gavel, Maine delegation frets

The 15 votes it took last week for Kevin McCarthy to become speaker of the House provided some Democrats schadenfreude as the California Republican scrambled to achieve his long-sought coronation. However, they’re now sounding the alarm over the concessions McCarthy gave to a contingent of GOP rebels to win the gavel.

And it’s not just Democrats who appear worried.

Members of Maine’s congressional delegation made several individual statements about the fallout from McCarthy’s intra-caucus dealmaking, some more directly than others.

Democratic U.S. Rep. Chellie Pingree blasted McCarthy’s concessions that manifested in new House rules as capitulation to the “radical wing” of his caucus.

After initially expressing hope that McCarthy and the new Republican majority will “govern our country responsibly,” 2nd District U.S. Rep. Jared Golden, a Democrat, this week released two separate statements criticizing initiatives directly resulting from McCarthy’s deal.

One explained why Golden joined the entire Democratic caucus in voting against the Republicans’ creation of a committee investigating “weaponization of the federal government.” The initiative is an escalation in the conflict between Republicans and the federal authorities investigating events like the Jan. 6, 2021, riots at the U.S. Capitol, which MAGA Republicans continue to describe as a gathering of American patriots. House Democratic leader Rep. Hakeem Jefferies dubbed the panel the “Select Committee on Insurrection Protection” and Golden condemned a provision that would not require members to recuse themselves even if they were personally a subject in a federal law enforcement investigation.

Golden also decried a $75 billion cut in defense spending that McCarthy accepted, describing it as “indiscriminate,” a threat to U.S. security interests and undercutting efforts to assist Ukraine in its fight against Russia’s invasion.

Potential Republican aid cuts to Ukraine were also a concern for independent U.S. Sen. Angus King, who earlier this week used several local and national media appearances to compare Russia’s invasion to early territorial conquests by Nazi Germany prior to World War II.

Meanwhile, Republican U.S. Sen. Susan Collins and Democratic U.S. Sen. Patty Murray, the respective co-chair and chair of the Senate Appropriations Committee, released a joint statement vowing to work in a bipartisan manner to fund the government “in a responsible way.” Their statement did not mention McCarthy or House Republicans, but appeared aimed at providing assurances amid growing worries that the new GOP majority could force a shutdown of the federal government.

Child welfare record dispute continues

As this newsletter goes out Friday morning, lawmakers in Augusta will likely be discussing their next steps in a dispute with the Mills administration over access to confidential records about child deaths.

Last year, members of the Legislature’s Government Oversight Committee subpoenaed the Maine Department of Health and Human Services to obtain confidential DHHS files for four children who were reportedly killed by their parents or caretakers in 2021. DHHS refused and, last month, a Superior Court judge sided with the agency in finding that state law does not explicitly allow the lawmakers access to such files.

According to the agenda for today’s meeting, the committee is slated to meet in executive session to discuss “legal strategy” in the case. The nonpartisan Office of Program Evaluation and Government Accountability, which reports to the committee and does have explicit authority to access confidential information, already has the files and is expected to issue a report to the lawmakers.

Regardless of how the committee decides to proceed, it’s clear that lawmakers believe more changes are needed at DHHS to improve child welfare programs. Working with both the LePage and Mills administrations, lawmakers have provided tens of millions of dollars to increase staffing, retention and training within the child protection programs in recent years.

But the most recent report by the Maine Child Welfare Services Ombudsman, which reviews cases and complaints within DHHS, found “substantial issues” in 46 of the 85 cases the ombudsman reviewed. That report could add impetus among some lawmakers who want to peel the Office of Child and Family Services off of DHHS to create a separate agency.

Mills’ two-year budget plan proposes nearly $15 million for foster care and adoption services but no new funding for caseworkers. Asked about the lack of additional positions this week, Mills said DHHS is still trying to fill about 60 new caseworker and other staff positions authorized by the Legislature last year.

Earlier in the week while speaking on the Maine Calling program, Mills said she had read Ombudsman Christine Alberi’s report and hoped to meet with her as well as child welfare workers about the situation.

“Whatever measures we can take,” Mills said. “I’m not sure it means creating a new bureaucracy or creating a new position. But I want to get on the ground and find out what’s going on.”

Leftovers from the notebook

  • Secretary of State Shenna Bellows, Attorney General Aaron Frey and Treasurer Henry Beck, all Democrats, were sworn in Thursday by Gov. Mills for new terms. They did so amid calls to make at least some of those positions subject to voter approval. Currently, Maine’s so-called constitutional officers are elected by the Legislature.
  • The Legislature will hold one session day next week. Currently sessions are colloquially known as “moving paper,” essentially approving various legislative sentiments and referring bills to committees for public hearings. Committees are mostly in the orientation phase, but public hearings will begin to ramp up the week of Jan. 23.
  • No firm date has been set for Gov. Mills’ anticipated budget address, which will effectively be her chance to sell her budget proposal to the public. The speech is expected in early February when lawmakers on the budget committee could be holding public hearings on various parts of her proposed spending plan. 
  • Maine CDC director Dr. Nirav Shah, who became widely known during the pandemic, is leaving his post to become the second in command at the U.S. CDC. There were signals last year that Shah’s public outreach during the pandemic was winning fans in the public health ecosystem, including from Dr. Ashish Jha, who is now the White House director of COVID response. Last year Jha called Shah one the “nation’s best public health experts” on Twitter when the Maine CDC director tweeted a lengthy thread lampooning self-appointed epidemiology experts. Shah will begin his new job in March, according to a press release from the governor’s office.

Maine's Political Pulse was written this week by State House correspondent Kevin Miller and chief political correspondent Steve Mistler, and produced by digital reporter Esta Pratt-Kielley. Read past editions or listen to the Political Pulse podcast at mainepublic.org/pulse.

Journalist Steve Mistler is Maine Public’s chief politics and government correspondent. He is based at the State House.