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Legislative committee strikes bipartisan, late-night budget deal

The State House is seen at dawn during the final week of winter, Thursday, March 16, 2023, in Augusta, Maine.
Robert F. Bukaty
The State House is seen at dawn during the final week of winter, Thursday, March 16, 2023, in Augusta, Maine.

Legislative budget writers in Augusta have hashed out a deal on spending for child care providers, nursing homes and other priorities while also cutting taxes for pensioners.

It was unclear earlier this week whether members of the Appropriations and Financial Affairs Committee would be able to reach a bipartisan compromise on an estimated $800 million spending package. But over several hours late-Tuesday and early-Wednesday, Democrats and Republicans approved a long list of initiatives in what was effectively Part II of the state’s roughly $10.8 billion, two-year budget.

The bill contains $30 million to double child care worker salary stipends to $400 a month while also making more families eligible for child care subsidies by increasing the income cap from 85% to 125% of the state’s median income.

Democrats secured $25 million in baseline funding for a new paid family and medical leave program that will allow many workers to take time off to care for a sick loved one or bond with a newborn. More than 70% of Maine worker currently do not have access to paid family and medical leave. And while the new program carried a hefty initial price tag, it will eventually be funded through a wage tax of up to 1% that will be equally funded by workers and employers.

Republicans couldn't secure the broad-based income tax cuts that had been a top priority for the GOP caucus since the beginning of the legislative session. But Republican committee members did negotiate a deal to increase the income tax deduction on pensions from $30,000 to $35,000. That change will save older Mainers tens of millions of dollars a year.

The committee ultimately endorsed the plan on an 11-1 vote.

“There hasn’t been a budget that I’ve voted for that I entirely supported but I think that we were able to negotiate the tax relief that will have a meaningful impact for Maine people and I’m really quite happy with the results for that,” said Rep. Nathan Carlow, R-Buxton.

Rep. Melanie Sachs, a Freeport Democrat who co-chairs the committee, praised the compromise before the committee's vote just before 3:45 a.m.

"I want to note the amazing, wonderful investments in people, in the Maine people, that this is going to engender, both from housing to health care to education to recovery, taking care kids, taking care of those on pensions,” Sachs said.

Other provisions of the budget proposal include:

  • Tens of millions of dollars to support emergency medical services, which are struggling to meet growing demand amid a worsening shortage of workers and volunteers.
  • $1.5 million to establish rural recovery residences for families aimed at helping keep families together while a parent grapples with substance use disorder.
  • A one-time, 3% cost-of-living adjustment for retired state employees.
  • A new $300 tax deduction for dependents starting in fiscal year 2025.
  • A $15,000 grant to the University of Maine System to study the effects of permanently shifting Maine to either Eastern Standard Time or Eastern Daylight Time.

The second budget bill will not be complete before the new fiscal year begins on Saturday. But there is no risk of a government shutdown because Democrats passed a roughly $10 billion budget bill earlier this year with a promise to work with Republicans on the secondary budget bill.

The bill could be taken up by the full House and Senate next week. It would take two-thirds majorities in both chambers — thereby requiring Democratic and Republican support — for the funding initiatives to take effect immediately. Otherwise, the bill will take effect later this fall.