Gov. Janet Mills will outline her budget priorities for the next two years during a speech Tuesday evening.
Maine governors typically address a joint session of the Legislature each January or February. In odd-numbered years, like this one, those speeches preview the state budget negotiations. Maine Public Radio and Television will carry the governor's speech live starting at 7 p.m. on Tuesday.
Mills has said her two-year, $11.6 billion spending plan strikes a balance by investing in "core commitments," such as public education and health, while reducing spending elsewhere. The Democratic governor released her budget proposal earlier this month but it will be state lawmakers — and particularly members of the Legislature's Appropriations and Financial Affairs Committee — who will craft a final spending plan for the budget cycle that begins on July 1.
Like many states, Maine faces a budget shortfall as tax revenues level off and COVID-era federal assistance dries up.
Mills wants to maintain the current level of municipal revenue sharing and continuing covering 55% of K-12 education costs. She has also proposed continuing to provide free community college to recent high school graduates. While all three of those initiatives enjoy bipartisan support in the Legislature, the price tag for each has risen each year. So lawmakers will have to find additional revenue or cut spending elsewhere to continue those initiatives.
The governor has not proposed any broad-based tax increases, such as changes to the income or sales tax. But to generate revenues, Mills has proposed increasing taxes on tobacco — from $2 to $3 a pack for cigarettes and proportionate amounts for other tobacco products — and increasing the tax on recreational cannabis sales from 10% to 14%. She also also proposed applying the sales tax to video streaming services, which was first floated by former Republican Gov. Paul LePage but has been rejected three times by lawmakers.
Mills also proposed increasing other fees and reducing a tax exemption on pension income for Mainers earning more than $100,000.
Republican lawmakers are criticizing her plan, which they said would increase state spending by roughly $1 billion.
