For the first time in more than a decade, Maine lawmakers are staring down a hole in the state budget.
And to help fill that $450 million gap, Gov. Janet Mills is suggesting that Mainers pay a bit more to light up a smoke or stream their favorite shows and movies. Recreational anglers would also have to shell out a few more dollars a year to support fishing programs.
The tax and fee changes that Mills put forward last week in her budget only add up to about $150 million in a two-year state spending plan that tops $11.6 billion. But new taxes and fees are always controversial, even when they are narrowly “targeted,” as Mills argues in this case.
“I am not proposing and do not support any increase in Maine's income or sales taxes,” Mills, a Democrat, told reporters.
Republican lawmakers are already vowing to oppose a budget with any tax increases while some Democrats are criticizing proposals from Mills to cut spending on some social service programs. Mills, meanwhile, says her plan invests in public education while raising additional revenue to benefit public health.
With debate over the budget just beginning in Maine, we’ll explore what, exactly, the governor is proposing for taxes and fees while providing a bit of context.
Tobacco and cannabis
Tobacco and cannabis users would arguably feel the biggest pinch from the governor’s proposal, paying out an estimated $86 million over the two-year period.
Maine’s cigarette tax is currently $2 a pack, which is just 7 cents above the national average. Mills has proposed going to $3 a pack, which would still be the second-lowest in New England behind New Hampshire’s $1.78 a pack. Taxes would also go up proportionately on cigars, smokeless tobacco, vape cartridges and other tobacco products.
Maine has the highest adult smoking rate in the Northeast, at 15%, and sits squarely in the middle of the states in terms of tobacco use among youth, according to the most recent data from the American Lung Association. Mills cited those adult and youth smoking rates while suggesting that increasing the cigarette tax for the first time in 20 years could give some tobacco users more financial incentive to quit.
“We know that smoking contributes to lung cancer, heart disease and other maladies that are prevalent among the Maine population in general,” Mills said. “It had a beneficial, proven public health impact last time (a tax increase) happened. We would expect the same to happen.”
On the cannabis front, Mills proposed hiking the tax rate on recreational sales from 10% to 14%. Excise taxes on cannabis growers would fall under the governor’s plan. But according to the administration’s estimates, the net result would be another $6.4 million flowing into the state treasury.
Streaming tax
The ever-growing share of Mainers who subscribe to services like Netflix, Hulu or Spotify would also see their bills increase slightly under the governor’s proposal.
Mills also wants to apply the state’s 5.5% sales tax to video and audio streaming service subscriptions. This is Mills’ third try at the policy change and follows an unsuccessful attempt by her predecessor, Republican Gov. Paul LePage, to tax video and music streaming subscriptions. Mainers already pay sales taxes whenever they purchase a video or song for download. But Maine is now in a minority of states that do not apply sales taxes to subscriptions.
Data for Maine was not immediately available. But nearly 90% of U.S. households surveyed as part of Deloitte Insight’s annual media trends analysis subscribed to at least one video streaming service two years ago. And those households average four subscriptions.
This would be part of a larger package of changes around cable TV and telecommunications providers that, on net, would yield about $13 million in additional revenue over two years.
As for impacts on the average consumer, the monthly cost to subscribe to Netflix’s standard, ad-free package would increase 85 cents, from $15.49 to $16.34. So-called “cord cutters” who ditched cable TV and instead subscribe to several streaming services would obviously see that repeated across platforms.
Fishing licenses, concealed carry permits
The governor is also proposing to increase fishing license fees by $7, which would be the first adjustment in 15 years.
Under her plan, Maine residents would pay $32 for an annual license and $50 for an annual hunting-fishing combination license, up from $25 and $43 respectively. License fees for nonresidents would also go up $7, so an annual hunting-fishing license would now cost folks from other states $157.
The administration says the shift is necessary to ensure that fishermen are helping to cover the rising costs of conserving and maintaining the lakes, ponds and rivers that they use. The $7 increase is expected to produce about $3.5 million in revenue, all of which would flow back to the Maine Department of Inland Fisheries and Wildlife, which runs state fish hatcheries, maintains boat ramps and houses the Maine Warden Service.
Mainers who want a state-issued permit to carry a concealed handgun, meanwhile, would see their costs increase from $25 to $40 for a new application and from $15 to $30 for a renewal.
Maine law allows legal gun owners to carry a concealed handgun without a permit. But individuals with permits can carry a handgun in a few additional places – such as state parks and Acadia National Park – or in a handful of circumstances in which concealed handguns are otherwise prohibited.
Broader context
Maine is not unique in facing a tighter budget situation this year.
According to the Pew Charitable Trusts, which tracks state finances, tax revenues declined in 40 states last year after adjusting for inflation. According to Pew and other organizations, some Democratic-controlled states are facing shortfalls because they increased spending in recent years.
That’s a criticism we are hearing from Republicans in Maine, who accuse Mills and Democrats of “reckless” spending propped up by huge infusions of federal money during the pandemic. But some Republican states are looking at deficits because they cut taxes, thereby reducing revenue.
Lawmakers across the country are just starting to debate how to deal with billion-dollar deficits this year.
Maryland’s Democratic governor, for instance, proposed $2 billion in cuts this week to help close an estimated $3 billion budget shortfall. Iowa’s top budget official, meanwhile, has suggested the state might dip into its reserve fund to close a gap, something that Mills said she didn’t entertain despite Maine sitting on a $1 billion rainy day fund.
Collins and Hegseth’s accuser
Republican U.S. Sen. Susan Collins this week attempted to push back on a report asserting that she declined to meet with the woman who has accused President-elect Donald Trump’s pick to lead the Department of Defense of rape.
The report in The New Yorker sought to shed light on the effectiveness of the Trump-MAGA pressure campaign on Senate Republicans to confirm military veteran and FOX News personality Pete Hegseth despite his inexperience, reported drinking issues, views of women serving in combat and a sexual assault accusation stemming from an extramarital encounter he had with a woman in 2017. (Hegseth denies the allegation.)
The woman, who has not been identified, has been released from a confidentiality agreement secured when Hegseth agreed to pay her through an undisclosed financial settlement. But she has been reluctant to go public. According to the New Yorker, she has sought to speak privately to senators who might determine the fate of Hegseth’s upcoming confirmation vote.
Collins was one of them, according to the New Yorker. The report says Collins declined the invitation and paraphrased her spokesperson saying that the senator believes “such allegations should be brought to the relevant committee — in this case, the Armed Services Committee — of which she is not a member.”
Collins challenged the report on social media, arguing that neither the woman nor her attorney contacted her office, but a “third party.” She reiterated her belief that such matters should be brought to the committee of jurisdiction so it can investigate. The New Yorker, known for its rigorous fact checking standards, responded with a post of its own, “We stand by our reporting.”
In response to questions from Maine Public, Collins’ office declined to name the third party because it was “a private conversation.” When asked why Collins thinks such accusations are better brought to the Armed Services Committee, a spokesperson said it’s because the panels are resourced to conduct background checks and “it’s where the most thorough consideration of a nominee occurs.”
Collins has also called for FBI background checks on Trump’s cabinet picks. However, news reports this week asserted that the FBI also did not interview Hegseth’s accuser.
F-bombs and wrist slaps
“We don’t have to listen to you. You sold out to NOAA and Canada!” a lobsterman shouted at Department of Marine Resources chief Patrick Keliher during a meeting last week.
“(Expletive) you, I sold out to NOAA and Canada!” Keliher shot back, referring to the National Oceanic and Atmospheric Administration.
That exchange, and the accompanying video of it, grabbed a lot of attention, perhaps because it’s objectively hilarious to watch Maine lobstermen take offense to profanity.
“That’s nice! Foul language in a meeting! That’s our commissioner,” the same lobsterman yelled as others in attendance can be heard telling Keliher, “just (expletive) quit while you’re ahead” and calling him a “(expletive) fool.”
But lost in the fiery exchange was that the fisheries chief was giving the lobstermen what they wanted. He was scuttling state adoption of a federal rule that increased the size of lobsters that they can legally keep and sell by one-sixteenth of an inch. Keliher was explaining why he thought doing so was a bad idea for the sustainability of the fishery when he was called a sellout. But he was ultimately there to concede to the lobstermen.
Keliher’s announcement wasn’t especially surprising to anyone who has observed that the iconic lobster industry traditionally receives rhetorical genuflection and policy deference from Maine politicians and officials.
In fact, Keliher was first chosen for the job when his predecessor, Norm Olsen, strayed too far from that tradition by suggesting nearly 14 years ago that Maine should change a longstanding rule that barred ground fishermen from keeping lobsters ensnared in their drag nets as bycatch. Olsen resigned when it became clear that Republican Gov. Paul LePage was anxious about the ensuing uproar from lobstermen.
So far, it doesn’t look like Keliher will suffer the same fate as the man he replaced. When asked about her marine resources chief’s profane retort during her budget briefing last week, Gov. Janet Mills smiled and gestured a slap on the wrist.
We’re back
The Political Pulse has been on hiatus for several months while we completed a massive project with the Portland Press Herald and Frontline PBS about the Lewiston mass shooting.
Now that that’s completed, the newsletter and accompanying podcast will resume more regular postings as we track developments at the State House and in Washington, D.C.
If you don’t already subscribe to the podcast you can find and follow it on Spotify and Apple podcasts. You can also find it on our website. We typically post it Friday afternoon and broadcast excerpts during All Things Considered around 5:30 p.m. and re-air it Monday during Morning Edition during the 8:45 a.m. slot.
If you’re interested in what’s kept us away for so long, please visit the Breakdown landing page to read coverage of the Lewiston mass shooting, which just happens to include a political story about how Maine’s novel yellow flag law endured after the shootings. And please check out our Breakdown podcast series, which you can find here.
The Frontline PBS documentary film about the Lewiston shooting aired Dec. 10, but you can view it anytime on Frontline’s YouTube page.
Maine's Political Pulse was written this week by State House correspondent Kevin Miller and State House bureau chief Steve Mistler, and produced by news editor Andrew Catalina. Read past editions or listen to the Political Pulse podcast at mainepublic.org/pulse.
