Democrats in the Legislature are signaling that they may push through a majority budget without Republican support, a move that could increase Gov. Janet Mills’ control over how the state uses $1 billion in federal COVID-19 relief funding.
Democrats, who hold a majority in both the House and Senate, described their spending plan as a “back to basics” proposal. It includes one new tax, by applying a 6 percent sales tax to online streaming services, which would generate about $10 million in revenue over the two-year budget period.
The Legislature has up until April 1 to approve the $8.3 billion budget on a simple majority vote. After that it would need two-thirds support. Democrats hold 22 seats in the 35-seat Senate and 80 seats in the 151-seat House.
The $8.4 billion budget Mills unveiled in January is left largely intact by the proposal touted by Democratic leaders on Monday.
It’s not clear whether Mills supports a majority-only budget. She has previously encouraged a bipartisan agreement and said so again Monday in a letter to the Legislature’s presiding officers.
Mills’ office did not directly answer a question about whether she would support a majority budget or whether she would immediately call the Legislature back to special session were they to adjourn after enacting a new two-year budget in April.
Pushing through a majority budget could have consequences later, if Republicans respond by withholding their support for borrowing proposals for major investments, such as broadband expansion, highways and bridges, and a host of other projects addressing everything from climate change to workforce development. While bonding packages go to a statewide vote, they first need two-thirds support in the Legislature.
Republican leaders have called a news conference for Wednesday to respond to the Democrats’ proposal. Senate Minority Leader Jeff Timberlake, R-Turner, said Republicans were still analyzing the proposal but had their reservations.
“How is it bare bones and only $50 million less than what Gov. Mills was proposing originally?” Timberlake asked. He also hinted Republicans would be reticent to support new bonds, given a new influx of funding from Congress.
“When you’ve got $1.5 billion to spend, why would you want to be borrowing anything?” Timberlake asked.
The April 1 date matters because it allows 90 days for the budget to become law, provided the Legislature adjourned by April 1 as well. Under the Maine Constitution, bills do not become law until 90 days after adjournment. If a bill has two-thirds support in both bodies it can be enacted as emergency legislation and become law as soon as it is signed by the governor. The state’s current two-year budget expires on June 30 and a new budget needs to be in place by July 1 to avoid a state government shutdown.
Mills, in a letter Monday to House Speaker Ryan Fecteau, D-Biddeford, and Senate President Troy Jackson, D-Allagash, encouraged a bipartisan “baseline” budget.
In her letter, Mills notes an uncertain economy in the months ahead and an incoming “large amount of federal funds” that will require “intelligent disbursement.” She also notes the federal aid may offset prior requests in her budget proposal. Mills says she will make adjustments to state spending and rebalance the budget based on new state revenue forecasts expected in May. She intends to balance spending and revenues, including new federal aid, with another supplemental budget later this year, rather than updating her current two-year budget proposal, with legislation known as a “change package.”
That would involve the Legislature’s support, which Mills would have to call back into a special lawmaking session. In her letter, Mills also details the factors she is considering, including a high volume of real estate sales, ongoing workforce challenges, a supply chain that’s been constricted by the pandemic and an ongoing closure of the border with Canada among other factors.
But depending on how incoming state revenues fare in the weeks ahead, Mills may or may not be compelled to call lawmakers back for additional budget balancing, which would leave her in a position similar to the one that developed at the start of the pandemic in March of 2020. The Legislature had adjourned and Mills was largely left to run state government, including allotting federal relief funds single-handedly.
In her letter Monday, Mills hints, however, that she would involve the Legislature in deciding how to spend the newest round of federal funds flowing from the American Rescue Plan Act of 2021.
“This plan includes larges sums targeted to a wide variety of sectors, which may offset requests for funds in the biennial budget, in addition to the large sum directed to state government, for which Legislative input will be important,” Mills wrote.
Jackson and Fecteau, along with their lead budget negotiators on the Legislature’s budget-writing Appropriations and Financial Affairs Committee, issued prepared statements on their “Back to Basics Budget” proposal.
“After more than a year of tragedy, hardship and prolonged uncertainty, Maine lawmakers aren’t interested in wasting time,” Jackson said.
Fecteau said Maine was well-poised to vault into its summer tourism season with widespread COVID-19 testing available for residents and visitors alike and, “more and more Mainers being vaccinated” daily.
On Tuesday, Fecteau made it clear that Democrats were determined to move ahead on a new budget with or without Republican support.
“I am supportive of getting this Back to Basics budget completed by April 1,” Fecteau said. “If delivering predictability and stability to Mainers, after a year that was anything but, does not garner Republican support, we will have to get it done nonetheless.”
But a majority-only budget may sour Republicans on providing the votes needed to move several bonding bills – state borrowing packages – forward, Kate Knox, a lobbyist for the city of Portland told the City Council’s legislative committee Tuesday. While bonding packages also go to a statewide vote, they first need two-thirds support in the Legislature.
Hundreds of millions of dollars that would provide funds for infrastructure improvements could be at stake, Knox said. These could include an expansion of broadband statewide, highway and bridge repairs and construction, as well as matching funding for several local projects like a new Portland convention center, developments along the city’s working waterfront and a new homeless shelter.
“My assessment is this makes bonds less likely to pass,” Knox said. “Generally when you do a majority budget, the minority party is not inclined to be cooperative going forward. That’s the risk of a majority budget.”
Correction: This story was updated at 9:15 a.m. Thursday March 25, 2021 to correct a detail in the proposed Democratic budget plan.
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