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Maine lawmakers have passed a budget. Are tax cut talks over or just beginning?

Sen. Trey Stewart, R-Presque Isle, watches the vote tally as a member of the House of Representatives at the State House in Augusta on Aug. 26, 2019. Stewart leads the Republican caucus in the Senate and he wasn’t optimistic earlier this week when asked whether Republicans will have another chance to argue for tax cuts in the second budget.
Troy R. Bennett
Sen. Trey Stewart, R-Presque Isle, watches the vote tally as a member of the House of Representatives at the State House in Augusta on Aug. 26, 2019. Stewart leads the Republican caucus in the Senate and he wasn’t optimistic earlier this week when asked whether Republicans will have another chance to argue for tax cuts in the second budget.

One week after budget negotiations suddenly broke down, Democrats in the Legislature passed a $9.8 billion spending plan late Thursday that will keep government offices open after July 1 but that left Republicans fuming.

Crafting a state budget is arguably the Legislature’s most important task every two years. And in most budget years, the process is a bipartisan one that often wraps up in mid- to late-June. But Democrats opted to quickly pass an interim, “continuing services” budget in March rather than risk a partisan logjam that could trigger only the third government shutdown in more than three decades.

Republicans unanimously opposed the baseline budget, however, after Democratic negotiators declined to agree to cut at least $200 million from state income taxes during negotiations over “part 2” of the state budget later this spring.

Tax questions remain

One lingering question in the wake of the partisan and, at times, tense process of approving a baseline budget is whether this was the opening salvo in a longer debate over tax cuts — or the end of those negotiations.

Sen. Trey Stewart of Presque Isle, who leads the Republican caucus in the Senate, wasn’t optimistic earlier this week when asked whether Republicans will have another chance to argue for tax cuts in the second budget.

“The reality is what they are doing with this move is signaling to us very clearly they have no interest in providing any structural tax relief to Maine people,” Stewart told reporters. “I think that’s become abundantly clear in the past few days. In fact, the counterpoints about doing something else with those funds has become abundantly clear, at least in the conversations I’ve been a part of with others. So I don’t think you’re going to see that.”

Democratic negotiators, meanwhile, say they are open to any and all conversations moving forward once the “continuing services” budget is on the books. But they are also not making any commitments, whether to the Republican proposal for $200 million in income tax cuts or Democratic proposals to increase taxes on wealthier Mainers.

“I think that’s difficult to say at this point because we really haven’t had a conversation,” said Sen. Peggy Rotundo of Lewiston, the Senate chair of the Appropriations and Financial Affairs Committee. “Bills are still being heard. But as we’ve indicated to our Republican colleagues in Appropriations, we are happy to talk about their priorities. But now is not the time.”

It’s unclear how quickly the “time” for those conversations will arrive, and whether they reach a level that would be satisfactory to Republicans.

The Legislature’s Taxation Committee has already held a few public hearings on bills related to tax cuts or tax increases. More are scheduled over the coming weeks. And while the budget-writing Appropriations Committee is by no means beholden to follow the recommendations of the Taxation Committee, the latter will act on tax-related bills after hearing from the public and interest groups.

But Democrats hold the majority of seats in both committees. And while Republican leaders have, in the past week or two, appeared to rally around a specific proposal to lower the tax rate on the first $24,500 in earnings from 5.8% to 4.5%, Democrats have criticized Republicans for talking about tax cuts for months but not putting forward any concrete proposals.

Additionally, Democrats contend Republicans have yet to outline what programs they would either cut or de-fund in order to offer tax breaks to most Maine residents. They say the baseline budget taken up on Thursday includes tax relief measures, such the enhanced homestead property tax exemption for Mainers ages 65 and older that Stewart proposed and lawmakers approved last year.

“What we have talked about repeatedly is we are very open to talking about tax relief of many forms,” said Rep. Melanie Sachs, D-Freeport, the House chair of the Appropriations Committee. “There are enormous number of bills in the Tax Committee ... but what’s really important to us is that we keep the promises that we made regarding tax relief right now because people are expecting that.”

War of the words

Opponents and supporters of a ballot question asking Mainers to buy out and replace the state’s two largest electricity providers with a nonprofit run by an elected board made arguments before the Maine Supreme Judicial Court Thursday over how exactly to describe the prospective utility to voters in November.

Secretary of State Shenna Bellows, a Democrat, originally proposed calling the new utility a “quasi-governmental” entity, a term a lower court rejected on the basis that the description is too arcane for voters to understand. Bellows is appealing that ruling and the political arms of the affected utilities, Central Maine Power and Versant, have filed briefs supporting Bellows’ original description.

Our Power, the group leading the ballot initiative, wants to describe the prospective entity as “consumer-owned.”

The dispute over the wording might seem like inside baseball, but it could also matter because the words might influence voters. For example, “quasi-governmental” might turn off voters who are suspicious of the government, or government-owned entities. It also edges up to CMP and Versant messaging describing the utility as a “government takeover.”

Conversely, “consumer-owned” arguably conveys a more populist message that Our Power wants in front of voters when they go to the ballot box.

The legal dispute is a microcosm of the larger messaging battle expected to intensify as the election draws closer. It was unclear Thursday when the Supreme Judicial Court will rule on the ballot question language dispute.

Collins, Mayorkas: Let them work

Republican U.S. Sen. Susan Collins received a public commitment from Department of Homeland Security chief Alejandro Mayorkas to review a law currently prohibiting asylum seekers from working.

Currently asylum seekers have to wait at least 150 days from the submission of their asylum application before they can be employed in the U.S.

Collins, vice chair of the Senate Appropriations Committee, is backing a bill that would shorten the wait period to 30 days. Independent U.S. Sen. Angus King is among the bill’s co-sponsors. While it’s uncertain whether the bill has enough Republican support to advance in Congress, Collins used her time questioning Mayorkas during a meeting this week to make the case that shortening the wait period is a “win-win” for employers and asylum seekers.

She told him about a restaurant owner in Freeport whose business is next door to a hotel where the asylum seekers are currently being housed.

“He was desperate for more workers,” Collins told Mayorkas. “He was having to curtail the number of hours that he could be open because of a lack of employees.

“In other words, we had a situation here where employers were desperate to hire these individuals who had made their way to the state of Maine, and these asylum seekers were very eager to get to work. They brought skills with them, energy with them, they wanted to be independent of local aid. They wanted to be able to support their families.”

Mayorkas said the U.S. asylum system “is fundamentally broken,” adding that Canada has surpassed the U.S.

In Canada, asylum seekers have to wait approximately 30 business days before the government allows them to work.

Maine's Political Pulse was written this week by State House correspondent Kevin Miller and chief political correspondent Steve Mistler, and produced by digital news 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.