AUGUSTA — The Legislature’s budget committee abandoned its quest early Saturday morning for unanimous agreement on a new state budget and, in a break with long-standing tradition, sent two competing spending plans to the House and Senate floors.
The lack of consensus sets the stage for intense negotiations and time-consuming debate, heightening the prospect of a government shutdown July 1.
“This won’t be the last chapter,” said Senate President Mike Thibodeau, R-Winterport. “We’re going to keep working to find a better solution that gets everybody on board.”
The 13-member Appropriations and Financial Affairs Committee voted 9-4 just after midnight Friday in support of an agreement that was negotiated last weekend by Thibodeau and Democratic House Speaker Mark Eves, of North Berwick. But after 148 days of work on the more than $6 billion spending plan, lawmakers from both parties expressed disappointment at their inability to coalesce behind a single proposal.
“I don’t believe either report will garner two-thirds support in either chamber,” said Sen. Jim Hamper, R-Oxford, the committee co-chair who joined with seven Democrats and his Republican Senate colleague in support of the majority proposal. “That concerns me greatly, but the eternal optimist inside of me rallies at the report that the four leaders will gather this weekend … and I’m confident that in the coming days we will have something that will draw both parties and both chambers together.”
The majority budget would: increase funding for K-12 education by $50 million, increase community college funding by $10 million, maintain municipal revenue sharing and increase the popular Homestead property tax credit.
In the area of taxation, the proposal would allow Maine’s sales tax to fall to 5 percent – down from the current, temporary increase to 5.5 percent – and increase the estate tax exemption from $2 million to $5.5 million. But the nine committee members rejected Gov. Paul LePage’s proposals to cut income and corporate taxes.
In another key compromise, Senate Republicans and Democrats have agreed to put forward a constitutional amendment that, if approved by two-thirds of the Legislature and then a simple majority of voters, would require two-thirds majorities in both chambers of the Legislature to approve future income tax increases.
House Republicans on the committee criticized that budget package, however, and were backing an alternate budget that would, among other things, reduce the income tax, maintain the current Homestead exemption and adopt LePage’s welfare reforms. Unlike the governor’s original proposal, the Republican package would not increase or broaden Maine’s sales tax but would keep it at 5.5 percent. House Republicans also are proposing to increase the meals and lodging tax.
“I think this is not a good (majority) budget that we are coming out with,” said Rep. Jeff Timberlake, R-Turner, one of the four dissenting votes. “I look forward to coming back and negotiating a better product in a few days.”
House Minority Leader Rep. Kenneth Fredette, R-Newport, said early Saturday his caucus of 68 members is “rock solid” in support of their priorities. But the dispute has raised the prospect that non-essential state operations could shut down at the peak of Maine’s tourism season for the first time since 1991 – a prospect for which both parties are already assigning blame.
“If the House Republicans and the Governor choose to shutdown state government, it will be because they insisted on prioritizing tax breaks to the wealthiest,” Senate Democratic Leader Justin Alfond, D-Portland, said in a statement.
The Republican insurgency centers on two omissions – both woven into LePage’s re-election campaign – from the agreement reached by Thibodeau and Eves. The first is an income tax cut. The second is changes to the state’s $24.3 million General Assistance program – representing about 0.4 percent of the $6.57 billion two-year budget – that would disproportionately affect Portland and asylum-seeking immigrants.
SPLIT COMMITTEE CAN’T REACH AGREEMENT
The committee’s divided vote comes after days of unsuccessful negotiations by Democratic and Republican leaders. But they also follow a robocalling campaign organized by LePage’s daughter, Lauren LePage, and his political adviser, Brent Littlefield, that infuriated some within Republican ranks by targeting Thibodeau and Republican Senate leader Garrett Mason, both longtime allies of the governor.
The impasse sets the stage for further negotiations among leadership, or, in the worst case, divisive floor debates during which 151 members of the Legislature could offer amendments to the two-year spending plan.
The budget committee’s failure to reach unanimous agreement on a budget reflects a divided government.
Democrats control the House. Republicans control the Senate. And although LePage is a Republican, the tax reform package he included in his budget proposal is so sweeping (cutting some taxes but raising others) that many Republican lawmakers can’t or won’t support it. A Democratic tax compromise has similarly stalled.
Republicans also appear to be holding strong on their insistence that any budget needs to change General Assistance, the welfare program that provides emergency vouchers for food, housing and other necessities for the poor. LePage has repeatedly – and inaccurately, critics say – said the state provides General Assistance to “illegal aliens,” a reference to immigrants seeking asylum in the U.S. from persecution.
In the absence of legislative action, LePage has vowed to lead a citizen’s initiative to win support for lowering the income tax at the ballot box.
TIME RUNNING OUT BEFORE BUDGET DEADLINE
Although state government wouldn’t shut down until July 1, the pressure is on because the budget is hundreds of pages of legislation. The budget must be printed, and it includes figures that must be calculated, a time-consuming process. Estimates vary on how long it would take to complete the process, but time is running out.
Funding for state government ends June 30. That means lawmakers need to send the budget to LePage by June 17. The governor has 10 days not including Sundays to either sign the bill, veto it or allow it to become law without his signature. To override a veto, lawmakers need two-thirds majorities in both chambers – a feat that would not be possible in the House if Republican members hold ranks and vote with LePage.
When state government shut down for 17 days in 1991 10,000 state workers were idled and most state agencies were closed. State parks were closed at the height of the tourist season. There were delays in unemployment checks and permits for businesses. State road projects such as repaving and pothole repair were suspended.
Unlike Congress, the Legislature doesn’t have the ability to pass the type of “continuing resolutions” that have become routine in Washington, D.C., in order to keep federal offices open without a new budget. That’s because, unlike at the federal level, Maine must operate on a balanced budget.
Even so, some lawmakers have discussed the possibility of passing a “baseline budget” that essentially adopts the current budget with the expectation that lawmakers will make adjustments later.
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