Lawmakers on the Legislature’s budget-writing Appropriations and Financial Affairs Committee unanimously approved a handful of high-ticket changes to Gov. Janet Mills proposed $8.77 billion two-year budget on Monday.
Mills’ office said the governor hopes to win a two-thirds vote of support for the budget from lawmakers so that it will take effect as soon as she signs it. But that will require support from Republicans, who continue to push for a tax credit or some other benefit for Mainers who worked through the pandemic.
“I don’t want to blow anything up,” said Senate Minority Leader Jeff Timberlake, R-Turner. “But I can tell you the conversations are ongoing and they have been very cordial.”
The spending plan is an update of the $8.3 billion, two-year state budget that was passed in March by majority Democrats in the Legislature. The update would increase spending over the two-year budget cycle to $8.77 billion. The proposal complements Mills’ plan for using $1.13 billion in federal American Rescue Plan Act funding heading to Maine.
In a short series of 12-0 votes Monday, the committee endorsed several pieces of the updated state budget plan, boosting state spending on schools by $187 million and agreeing to share an additional $81 million in state tax revenues with Maine’s 500 or so cities and towns.
The funding proposal for schools is the Legislature’s first effort to ever fully meet a 55 percent funding mandate passed by voters in 2004. The bump to municipalities will see the state share 4.5 percent of its sales tax revenue in 2022 and 5 percent in 2023.
But behind the quick series of public votes Monday is an ongoing and likely less relaxed series of private negotiations between minority Republicans and majority Democrats over how the Legislature should spend an unexpected tax revenue windfall of close to $1 billion.
Senate President Troy Jackson, D-Allagash, touted the committee’s decision to fund schools and municipalities.
“The reality is that Maine’s budget is a statement about what we value,” Jackson said in a prepared statement. “With the funding measures passed by the AFA Committee today, we say loud and clear that the Maine Legislature supports our public schools, students, teachers and hardworking property taxpayers. Maine voters have told us in no uncertain terms that the state needs to be doing its part to take care of our schools and help local government. It’s high time we kept that promise.”
Republicans have said they want at least some of that money to go back to the taxpayers. Although Republicans are in the minority and don’t have the votes to stop a budget package from moving forward, they do have the votes prevent any budget changes wanted by the Democrats and governor from taking place quickly.
Republicans also could be key in ensuring another $1 billion in federal funds earmarked for Maine in the American Rescue Plan Act get out the door quickly and into the hands of the agencies and organizations that use them to bolster the economy. Mills presented her proposed budget changes in mid-May and outlined her plan for using the state’s share of ARPA funds earlier that month.
With a two-thirds vote of the Legislature, any bill it passes can become law immediately upon the signature of the governor. Without a two-thirds vote, new laws have to wait 90 days after the Legislature adjourns to go into effect. In March, Mills and Democrats went it alone, passing the new $8.3 billion state budget on a simple majority vote, without Republican support. Republicans castigated that vote, calling it a “sham” and “incomplete.”
Voting the measure out in March, over Republican objections, meant Democrats had the time, 90 days, to allow the bill to become law before the current two-year budget expired, removing the threat of a state government shutdown.
Maine’s Constitution requires a balanced state budget or state government shuts down.
Mills’ office confirmed Monday that she still wants a two-thirds vote for the pending budget packages. But her office offered little more on the state of negotiations with Republicans.
“The governor expects a two-thirds budget, the benefit of which – beyond bipartisan support – is that it will take effect immediately upon the governor’s signature,” Lindsay Crete, Mills’ press secretary wrote in an email. “The administration remains in contact with members of the Legislature’s Appropriations Committee as they continue their work and is providing them with information to assist in their negotiations.”
Lawmakers negotiating the terms of any deal that could reach the two-thirds threshold have said little about specifics.
Republicans have previously said they would like to see some of the surplus revenue be used to provide an income tax credit of up to $10,000 for Maine workers who stayed on the job throughout the COVID-19 pandemic. That figure is equal to the $10,000 income tax exemption, workers who collected unemployment during the pandemic received on both their state and federal income tax for the 2020 tax year.
Timberlake, the senate minority leader, said he was leery to say too much for fear of souring any progress that’s been made at the negotiating table. But he confirmed Republicans are still looking for a tax credit or other benefit for taxpayers, especially those who were required to work on the front lines throughout the pandemic.
He acknowledged Republicans’ clout hangs on their ability to deliver the two-thirds vote that would allow any spending bill or bills they pass at the end of June to become law quickly. When it comes to federal aid to the state, Timberlake said, “I know (Mills) wants to be able to move that money out as soon as she can.”
The Appropriations Committee is expected to take additional line-item votes on the spending plan this week as lawmakers also negotiate for a package both parties can vote for.
The budget bills are expected to be the highlight of a June 30 session of the Legislature, which has processed more than 1,700 bills – 645 of them already signed into law by Mills – in 2021. It has just 30 or so bills to still vote on, according to legislative staff.
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