Back in session, Maine Legislature expected to act on PPP tax conformity

Scott Thistle, Portland Press Herald, Maine
·2 min read

Mar. 10—AUGUSTA — The Maine Legislature convened Wednesday for only its second set of COVID-19-restricted floor sessions since lawmakers were sworn in two months ago.

The docket of legislation included bills that would change the state's flag and extend the processing time for absentee ballots, among other topics. The biggest order of business was expected to be a supplemental budget bill that was approved by the budget committee in a party-line vote last week. The bill would give Maine businesses and unemployed Mainers a break from paying taxes on relief funds they received during the COVID-19 pandemic.

The bill passed on a simple majority vote in the House early in the day, but it needs two-thirds support in both the House and the Senate in order to go into effect in time for the tax benefit to be realized before the tax filing deadline of April 15. Republicans have withheld their support for the bill, which among other things would provide relief to 28,000 businesses in Maine small and large.

While members of the Legislature's budget-writing Appropriations Committee voted unanimously to include an additional $100 million in the supplemental budget to offset the lost tax revenue, Republicans on the panel voted against the final measure holding out for additional $32 million in tax breaks.

Republicans are also pressuring Democrats to require a two-thirds vote of the Legislature in order to spend any new federal aid coming from Congress. Maine is expected to see another $6 billion in aid based on the $1.9 trillion American Rescue Plan, which was also approved on Wednesday. While much of that funding will flow directly to Maine citizens in the form of $1,400 cash payments or extended $300 unemployment benefits, state and local government entities are expected to see between $1.2 billion and $1.7 billion in new federal aid.

The budget bill also would exempt up to $10,200 in unemployment benefits from state income taxes. Maine typically counts unemployment benefits as income and taxes them.

Meeting at the Augusta Civic Center — a bigger venue that allows social distancing for lawmakers to prevent spreading the COVID-19 virus — members were met Wednesday morning by a group protesting pandemic restrictions put in place by Gov. Janet Mills, a Democrat.

Lawmakers also debated a measure, offered by Republicans, that would end that state of emergency that has been in place for nearly one year and rescind some of Mills' orders related to the pandemic. The effort was defeated on a party-line vote in the House and was expected to move later Wednesday to the Senate, where Democrats also hold a significant vote advantage.

In other action, lawmakers took time to read sentiments and offer condolences to the family of outdoors advocate and columnist George Smith, a longtime presence in the State House, who died in February.

This story will be updated.