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Mar. 24—AUGUSTA — State House minority Republicans are objecting ferociously to a new $8.3 billion two-year state budget that Democratic majorities and Gov. Janet Mills appear poised to pass with or without Republican support.
"It's a sham," House Minority Leader Kathleen Dillingham, R -Oxford, told reporters during a press conference Wednesday. "We don't know how much more spending is going to be added onto this."
Democratic leaders said their "back to basics" $8.3 billion proposal was based on the budget the Legislature approved with bipartisan support in 2019. They also said they wanted a new budget in place to avoid any risk of a state government shutdown as Maine heads into its busy tourist season.
Without a balanced budget in place by June 30, non-essential state government functions would be forced to shut down, including the state parks that are among Maine's largest tourist attractions.
Democrats said they were willing to talk with Republicans but indicated they would move forward without their support if necessary to get a new budget fully in place well ahead of the end of the state's fiscal year on June 30.
"What we have seen far too long here is cliffhangers every June and at the end of our session and we don't need cliffhangers anymore," said Sen. Cathy Breen, D-Falmouth, co-chair of the budget-writing Appropriations Committee.
She said businesses and taxpayers all over Maine just endured another cliffhanger when Republicans demanded tax code changes and refuse to back a supplemental budget earlier this month that provide more than $100 million in tax cuts to Maine businesses that received federal Payroll Protection Program loans in 2020.
To pass the budget with just Democratic votes the Legislature will have to approve it before the end of the day on March 31. That would provide the 90 days needed under the state's constitution for the bill to go into law before the end of the fiscal year on June 30, without an emergency preamble, which requires a two-thirds vote in both bodies of the Legislature. With an emergency preamble a bill can become law as soon as the governor signs it.
Having the budget in place before June would also provide clarity for local school committees, who would then know how much state aid they will be getting over the next year as they look to craft their own budgets — usually put before local voters in June for approval, said Rep. Teresa Pierce, D-Falmouth, the House Chair of the Appropriations Committee.
"They have done a herculean effort to keep our kids in some sort of functioning environment, whether it was a hybrid or part-time or working remotely. It has been just unbelievable and I think giving them some security around this has been our biggest, biggest priorities and what we absolutely need to do,"
But Dillingham, the Republican House leader, and others said they've been handed a one-page budget breakdown and have little detailed information on the budget or how Democrats are planning to allocate $1 billion in new federal aid to help the state recover from the COVID-19 pandemic.
She also said Republicans have steadily joined with Democrats, if at times reluctantly, to pass budgets that have garnered broad bipartisan support in recent years. Dillingham said she felt passionately about the deliberative process that takes place in the Legislature and that Democrats were now risking that unity.
Senate Minority Leader Jeff Timberlake, R-Turner, said the budget handed to them was incomplete and he wasn't sure whether it even included several initiatives Mills wanted for responding to the pandemic.
Timberlake said the budget also appeared to omit a key provision Republicans were asking for, a $10,200 tax credit for income tax filers that would mirror relief that was given on unemployment benefits in a recent supplemental budget passed by the Legislature earlier this month. That measure also included $100 million of income tax relief to Maine businesses that received federal Payroll Protection Program loans.
Timberlake said the proposed budget also appeared to include a proposed tax increase — a 6 percent sales tax on online streaming services, which raises about $10 million over the state's next two fiscal years. The tax was originally proposed by the administration of former Republican Gov. Paul LePage but not enacted.
"With all the projected revenues coming into the state the last thing we need is a tax increase," he said. And he noted that the Legislature has passed a majority-only biennial budget just two times in the last 70 years.
"Why?" he asked. "Because it's not the right thing to do. The whole system was designed so everyone has a seat at the table in order to collaborate, deliberate and negotiate. That is not happening."
A majority-only budget may sour Republicans on providing the votes needed to move several bonding bills — state borrowing packages — forward. 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 including 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.
But the need to borrow for those kinds of investments may also be unnecessary with more than $1 billion of additional federal pandemic relief heading to Maine in the weeks ahead.
Once the U.S. Treasury finalizes how that funding can be used, lawmakers and Mills will be in a better position to understand how that aid might offset existing state budget expenses, Mills said in a letter to the Legislature's presiding officers on Monday.
House Speaker Ryan Fecteau, D-Biddeford, said Democrats were open to discussing specific items that Republicans have concerns about and were not entirely closing the door on budget talks.
"Let's have that conversation and let's get this done together," Fecteau said. "We remain ready to work with them to deliver a back-to-basics budget that funds state government and provides stability and predictability to Maine people without having consequences for economy and our recovery from this pandemic later on down the road when the consequences are just to great to bear."
The Appropriations and Financial Affairs Committee is expected to start taking votes on the budget proposal during a work session on Thursday and leaders have indicated they intend to have the full Legislature vote on the budget when it convenes next Tuesday at the Augusta Civic Center.