AUGUSTA — The Legislature has passed a bill to fix a $6 million hole in Maine’s two-year $6.3 billion state budget.

The Democratic-led House and Senate gave final approval to a bill to raise the service provider tax late Tuesday night.

Its fate was uncertain after it failed in the House earlier Tuesday. But lawmakers removed the requirement that the bill take effect immediately, allowing it to pass with a simple majority instead of a two-thirds vote.

It’s fate is still not certain. If Gov. Paul LePage vetoes it, there could still be a $6 million hole.

The Legislature has adjourned for the summer, so if the governor vetoes it, further work on the budget would have to wait until the Legislature reconvenes.

Republicans have serious concerns about it.

In drafting the budget, lawmakers left out the service provider tax, for things like health care providers and television cable services.

Maine’s Office of Fiscal and Program Review says it would have resulted in a discrepancy in the budget of about $2.5 million this fiscal year and nearly $4 million next fiscal year.

The bill clarified that a sales tax increase from 5 percent to 5.5 percent would be applied to all categories for which the state currently collects sales tax, including a certain group of taxable health care services. It is estimated the tax increase would raise about $6 million over the state’s two-year budget cycle.

Earlier, the bill fell short. Only 92 members of the House voted for the bill while 50 voted against it. 

The Democratic-led Senate later voted 24-9 in favor of the bill, reaching the two-thirds majority necessary for the bill to go into effect immediately.

Lawmakers enacted the budget, which went into effect July 1, over a  LePage veto of the measure based on his concern with the sales tax increase.

House Majority Leader Seth Berry, D-Bowdoinham, said the failure to pass the bill as an emergency wasn’t a devastating development, but it is troublesome.

“The sky is not going to fall,” Berry said. “But it is not a good thing because they are doubling back on prior commitments in terms of the budget negotiations.”

Meanwhile, there was speculation Tuesday that some Republicans were withholding votes because they were angered that a $100 million package of bonds aimed at transportation infrastructure improvements was being held over by Democrats.

House Minority Leader Ken Fredette, R-Newport, issued a statement on the bond package early Tuesday saying Republicans wanted Democrats to move the bonds along to voters this fall, and not as part of a larger package of bonding proposals.

“Democrats are proving once again that they are willing to jeopardize the passage of a jobs initiative that enjoys broad bipartisan support just so that they can get their way on contentious spending initiatives,” Fredette said.

Fredette said he had “no knowledge” of Republicans withholding votes over the transportation bonds. The transportation bond package as proposed by Gov. Paul LePage was “revolutionary,” according to Fredette, who suggested Democrats were holding the bonding proposal to deny LePage any credit for the measure.

“The political games have to stop,” Fredette said. “The job creation must continue. It’s time for Democrats and Republicans to come together and pass a good bill when they see it.”

But Berry said the question over how LePage would issue more than $286 million of previously authorized bonds made it unclear how transportation bonds should be spent in the future, and Democrats wanted to consider that information and return in the fall to pass a bonding package onto voters statewide for authorization.

Berry said he had heard rumors Republicans would withhold votes on other key bills if the transportation bonds were not acted on during the current lawmaking session, but said he had no direct evidence of that.

“If Republicans want to defy their own prior agreements and defy the Constitution there’s not a lot we can do,” Berry said. The state’s Constitution requires a balanced budget.

He said Fredette’s claim Democrats were playing political games was “absurd.”

“It’s mind-boggling that they could suggest that responsible budgeting and responsible investments through bonding is some kind of political game,” Berry said. “The only political game is being played by Republicans here.”

Late Tuesday the House rejected a move by Republicans to move forward on the transportation bonds as Democrats argued the bonds would be part a package bonding bills they planned to work sometime later this summer.

Democrats said there was no plan to cover the debt service on the bonds in the current budget, but Republicans said that could be handled with a supplemental budget if and when voters approved the bonds.

“I want jobs and I am business-friendly and want to do everything we can to put people back to work but I want it done in an organized structured way where we can plan all the bonds and not just pick the ones we think are nice,” said Rep. Joe Brooks, D-Winterport said. 

Fredette said the matching federal funds for the transportation bonds would bring a total of $250 million of highway, bridge and port improvements to Maine.

“Maine needs jobs now,” Fredette said. “There is no reason why we cannot enact it today, pushing it down the road only jeopardizes its chance for passage.”

Democrats said the move was a political stunt in the closing hours of the Legislative session and even if they voted to move the transportation bonds forward, the department had no intention of selling those bonds until 2014.

“Suddenly, on the last day of Legislative work, Republicans are joining Democrats in our effort to push for important job-creating bonds, but they did nothing as the governor sat on many voter-approved bonds for years,” Assistant House Majority Leader Jeff McCabe, D-Skowhegan said in a prepared statement. “Democrats are ready to work with Republicans on a thoughtful and comprehensive plan for bonding, but we won’t play a part in their political games.”

sthistle@sunjournal.com

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