Lawmakers reach tentative budget deal

Update: Gov. Paul LePage ends shutdown by signing $7.1B budget bill

AUGUSTA — Lawmakers hoped late Monday that they had struck a deal that would allow state offices to open as usual on Wednesday.

“We’re closing in on a budget deal” that Gov. Paul LePage will sign, said Sen. Nate Libby, D-Lewiston. “The shutdown should end tonight.”

He said Republicans successfully argued for eliminating a lodging tax increase in the initial $7.1 billion budget while Democrats managed to add “modest funds for Head Start and locked-in reimbursement rates for mental health providers.”

House and Senate leaders were working in tandem into the night to put together a spending plan that could win at least a two-thirds vote in each house. Gov. Paul LePage is apparently ready to sign it.

“We have reached an agreement,” said House Speaker Sara Gideon, D-Brunswick. She said lawmakers intended “to run that bill back and forth” between the two chambers as needed until final approval.

When the Senate voted on the proposed budget shortly before the clock ran out to avoid a government shutdown Friday, only one of its 35 members refused to give the spending plan his blessing.

For Republican Eric Brakey, R-Auburn, it came down to one thing he just couldn’t stomach.

“For me, raising taxes on one of our most important Maine industries was a bridge too far,” Brakey said.

“I made a promise to my constituents when I ran for office that I would never vote to raise our taxes,” Brakey said. “Government takes enough of our money already. I have yet to break that promise and I never intend to.”

The proposed budget initially included a provision to hike the lodging tax to 10.5 percent, the highest in the region but a levy that is paid largely by tourists.

Most lawmakers have gripes about what’s in the spending plan — and what’s not — but aside from Brakey, members the GOP-controlled Senate opted to back a proposal they hoped would avoid closing the doors on Maine’s government.

It turned out that the House couldn’t reach the same level of amity, with most Republican members siding with Gov. Paul LePage to prevent the two-thirds vote in favor of the budget that would have overcome the governor’s objection.

So the state has been closed down since Saturday.

A House vote on a slightly amended version of the plan fell nine votes short of the required supermajority on Monday. Legislators took the measure up again late in the day.

“I’m standing up for my community,” said Rep. Sheldon Hanington, R-Lincoln, who told colleagues that his car was vandalized over the weekend, apparently by someone angry about his budget stance.

As lawmakers talked Monday, it appeared the lodging tax, which would raise about $19.5 million, was the main sticking point.

“At this point, that’s all that divides all involved,” said Rep. Heidi Sampson, R-Alfred. But, she said, the Democrats “won’t do it. It is beyond infuriating.”

Rep. Deb Sanderson, R-Chelsea, said she would hold her nose and vote for the budget if the lodging tax hike is stripped out.

“I sincerely hope both chambers can reach a compromise soon that eliminates the lodging tax hike,” Brakey said.

The problem was that legislators who support the budget were wary of caving in to yet another request from conservatives after giving up so much of what they wanted to get this far.

Libby said he voted for a budget that “I absolutely hated” despite hearing from many constituents who are upset that he gave in.

He said he supported it anyway “because I knew that it was the last, best chance” to keep the state’s doors open and “avoid all the chaos and pain a shutdown brings.”

“I am furious that despite the willingness of my colleagues to cast a vote for a budget we hate, so many Republicans still voted to imperil the lives and livelihoods of thousands of Mainers,” Libby said.

Brakey said there are many problems with the budget — one that he said his GOP colleagues backed only with “serious reservations” — and he had to oppose it.

Hiking the lodging tax from 9 percent to 10.5 percent, he said, was too much to take.

“In Maine, we call ourselves Vacationland,” he said, a designation earned “because our tourism industry is one of the few thriving economic generators in our state that government, despite its best efforts, has yet to strangle to death with excessively high taxes and burdensome regulations.”

“We do not need additional taxes to grow state government any more than this budget already does,” Brakey said. “We cannot afford to keep piling tax burdens on our tourism industry.”

Libby, the assistant minority leader in the Senate, said he’s spent months trying to negotiate and compromise with colleagues from both parties to reach a spending pact that he described as “worse than any I’d ever hoped to pass.”

For Libby, the budget’s biggest flaw is its elimination of half the new education funding that voters endorsed in November when they approved a surcharge tax on incomes above $200,000.

He said Democrats gave in on the issue, and many others, “because we recognized that Republicans control the Senate and the Blaine House.”

In the end, though, the effort to craft a compromise failed anyway, forcing the closure of state offices on Monday.

Libby said the problem is that a few dozen House Republicans felt “more loyalty to their party and to Gov. Paul LePage than they do to the people of this state.”

“We’re not going to give in to ridiculous last-minute demands, but we are going to do everything we can, around the clock, to end this manufactured crisis,” he said.

With the shutdown at hand, Libby said, Democrats would keep trying. They apparently got an extra $1.2 million over two years for social services in exchange for dropping the lodging tax hike.

Libby said that in addition the Department of Health and Human Services “cannot unilaterally cut reimbursement rates any further” to mental or behavorial health providers during the two-year budget term.

Rep. Ken Fredette, R-Newport, the GOP House leader, said people on his side of the aisle are trying as well to find a way to resolve the budget crisis.

He said, though, that “we have legitimate concerns about the sustainability of the spending requirements built into this budget,” especially in terms of what it shells out for education.

“We are doing our job,” Fredette said in response to many protesters at the State House accusing budget foes of failing their constituents.

scollins@sunjournal.com

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