AUGUSTA — The two-year session of the Maine Legislature set to convene in December could be a tumultuous one, as Gov. Paul LePage will once again likely seek an income tax cut as part of his last two-year budget proposal.
LePage has made no secret of his wish to eliminate the income tax, and in recent weeks has expressed his opposition to a ballot question that would tax the state’s higher-income households in order to increase school funding.
Speaking Friday to members of the Portland Rotary Club, LePage said the tax increase on the wealthy, coupled with a possible increase in the state’s minimum wage – another ballot question before voters Tuesday – along with new federal overtime rules set to go into effect in January would amount to an “economic tsunami” for Maine.
“I can assure you that the governor and his staff will do everything humanly possible to prevent a recession next year,” LePage said in an interview after his speech. He said his staff was modeling a variety of budget and tax scenarios, but that any income tax cut would be offset in part by another attempt to broaden and increase the sales tax.
LePage noted that 40 million people visited Maine last summer, telling the Rotary audience that his goal in broadening and increasing the sales tax is to transfer more of the costs of state government to tourists.
“I bring it up every year,” LePage said. “It never gets out of committee.”
The governor’s record of budgetary accomplishment is poor, as lawmakers have spurned his proposals and enacted their own spending plans over his vetoes for the past two budget cycles. The current budget appears to have the state’s finances on track, with tax revenues on the rise and a surplus of about $93 million on the books.
PUSH-BACK FROM BOTH PARTIES
Sen. Linda Valentino, D-Saco, an outgoing member of the Legislature’s Appropriations Committee, said even if Republicans gain majorities Tuesday in both bodies of the Legislature, LePage will have difficulty getting his budget proposals through.
She said Republican lawmakers, more than Democrats, oppose expanding or increasing the sales tax. And any lawmaker who hopes to replace LePage when his term ends, she said, will be reluctant to support a budget that results in any kind of a tax increase.
Valentino also said LePage administration officials have dodged financial questions from the committee during budget preparations, and she noted that Republicans who worked collaboratively with Democrats to keep state government open during budget talks have been shunned or savaged by LePage for their efforts to build bipartisan coalitions.
As a result, she said, lawmakers have lost faith that LePage has any reasonable expectations about how state government works.
“You can’t work by blackmailing the Legislature to get what you want,” Valentino said. “We elect a governor to work with the Legislature; we don’t hire a CEO or a dictator.”
But Rep. Robert Nutting, R-Oakland, another outgoing member of the Appropriations Committee, credits LePage with being a driving force behind lowering the state’s overall debt load and pushing lawmakers to create a budget that is “structurally sound” and less subject to the ebbs and flows of the economy and swings in income tax revenue.
Nutting said LePage has been instrumental in reducing Maine’s budget gap – the difference between what the state spends and what it takes in – reducing it from over $1 billion in 2012 to less than $155 million in 2016.
And he said LePage’s administration has also created financial stability in one of state government’s most costly agencies, the Department of Health and Human Services.
“Democrats are loath to reduce Health and Human Services (spending), and everybody, in their own communities, has a school and they don’t like to see education funding reduced,” Nutting said.
He said Republicans will support a budget that eliminates vacant positions in state government, but some open positions should stay on the books to provide flexibility in the budget and in managing the state’s overall workforce. “The Legislature will have to decide how far to go with that without going overboard,” Nutting said.
A memo from a LePage staffer that was leaked in July suggested the governor wants to reduce the state’s workforce by about 2,300 positions, bringing it from 11,810 workers to about 9,500. LePage said many of those jobs are unfilled vacancies that have been left in the budget by the Legislature to create unspent pockets of money that are then tapped for “pet projects.”
It is expected that LePage will use his budget to push for greater consolidation of public school administration. He has frequently criticized the number of superintendents in Maine, especially in light of its dwindling student population.
LePage’s budget proposal is also likely to include additional reforms of state-managed welfare programs, and he may again seek to expand the ranks of state law enforcement focused on catching and prosecuting those who traffic illegal drugs such as heroin, cocaine and methamphetamines.
CONTROL OF CHAMBERS CRUCIAL
Valentino said she doesn’t believe the Legislature will end up in a stalemate over the budget that could lead to a government shutdown. She said that’s largely because lawmakers will not want to face the political ramifications of that, especially those who hold aspirations to run for re-election or even for higher office in 2018.
“Nobody will want the blame for a shutdown,” Valentino said. “That would be a total blame game.”
Currently, Republicans hold a 20-15 edge over Democrats in state Senate seats, while Democrats control the House, 78-69. There are also three independents and one unenrolled lawmaker in the House.
Nutting said the composition of the incoming Legislature will be instrumental to LePage’s success, or lack thereof. He said if Republicans gain majorities, life would certainly be easier for LePage, but if Democrats do, LePage’s last two years in office may feel like the longest of his two terms.
“I think we will know next Wednesday morning how successful his last two years will be based on the makeup of the Legislature,” Nutting said. “He will have a hard time forwarding his proposals if the Democrats control, and he will have an easier time if the Republicans do. But that doesn’t mean if the Republicans are in control he will get a blank check either.”
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