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18-06-2025
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Maine Legislature at stalemate over budget addition
Budget committee co-chair Sen. Peggy Rotundo (left) and Assistant Majority Leader Jill Duson (right) listen to debate on the budget on March 20, 2025. (Photo by Emma Davis/ Maine Morning Star) This story will be updated. The chambers of the Maine Legislature are in disagreement over a roughly $320 million budget addition to the $11.3 billion biennial budget passed in March. With some Democrats joining Republicans in opposition, the Maine House of Representatives failed to advance the plan Wednesday morning, while the Senate cast a party-line vote in favor. The initial conflicting votes come after the Democratic majority on the Legislature's Appropriations and Financial Affairs Committee set the budget proposal early Saturday morning without Republican support. While added appropriations in the plan total about $320 million, the bill has a lower fiscal note — $117 million — due to a range of cost cutting measures — taxes, some cuts, and transferring unexpected surpluses. The net cost is also lower than the roughly $127 million that remained after the initial budget passed in March. The plan rejects some of Gov. Janet Mills' proposed cuts, such as to childcare programs and low-income food assistance, as well as proposed taxes on ambulances and pharmacies. However, the plan includes Mills' proposed tax additions on streaming services, cannabis, pensions and cigarettes — the latter at an even higher amount than the governor requested. 'Republicans had started from a position of no new taxes and we remain in that posture,' Republican budget lead Rep. Jack Ducharme of Madison said on the House floor. On the Senate floor, Minority Leader Trey Stewart (R-Aroostook) also criticized the majority party for not taking 'a serious look back about our state's financial disrepair,' nodding to the state budget audit he called for before session began. Committee sets budget plan with party-line vote But Republicans were not the only members of the House to have objections, as the budget bill failed 71-77 on the first vote before the chamber then voted against its passage without a roll call. Following the Senate's vote 19-15 in favor, the bill now heads back to see if the House will change its stance. Through tears, Rep. Nina Milliken (D-Blue Hill), who voted against the budget, urged her colleagues to reject regressive taxes, which have a greater impact on people with lower incomes, and instead push for a model that taxes the wealthy more — even if the governor, who has opposed any income-based tax reform, ultimately vetoes it. 'Democrats across this country right now are calling for Republican members of Congress to stand up to the executive branch, because they are a separate co-equal branch of government and they should be asserting their power as such,' Milliken said, referring to push back against President Donald Trump. 'We are a separate co-equal branch of government,' she added. 'We owe it to our constituents to do better, to tax people who are super wealthy, so that the poorest people in our communities see some relief.' After both chambers narrowly rejected a 'millionaire's tax' in initial votes, the Senate reversed its stance Monday night, sending the measure back to the House to reconsider. The proposal would place a tax surcharge of 2% on the portion of a resident's taxable income beyond $1 million for single filers to be used to fund public K-12 education. As the Legislature continues to debate the budget bill Wednesday, lawmakers are expected to propose a number of floor amendments. One proposal, filed by Rep. Sally Cluchey (D-Bowdoinham), would tack on this 'millionaire's tax.' The budget plan being considered also effectively stops the state's free community college program for future graduating classes, against the governor's request to make it permanent. Several bills currently pending were also worked into the budget plan, including proposals to alter the child tax credit and real estate transfer tax. Read about more of the details of the plan here. Sen. Cameron Reny (D-Lincoln), an appropriations committee member, said in a floor speech that the budget is as much about avoiding harm as it is about providing for Mainers, a sentiment both of the committee chairs also shared. 'This is not a flashy budget,' co-chair Sen. Peggy Rotundo (D-Androscoggin) said. 'It's a workhorse — steady, thoughtful and grounded in real need.' Rotundo asked her colleagues to vote for the budget 'not because it gives everyone everything they want' but because 'it reflects who we are, a state that cares deeply, spends responsibly and plans wisely for the future.' Rep. Drew Gattine (D-Westbrook) made a similar plea in the House earlier Wednesday. 'This budget meets the moment,' Gattine said. 'It addresses the biggest issues that Maine people are facing, and protects critical investments that we've made in the past in health care, food security, education, housing and child care.' SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX Meanwhile, Rep. Amy Bradstreet Arata (R-New Gloucester), another member of the appropriations committee, argued the budget plan was built on a 'house of cards,' pointing out that it was balanced, in part, by an unexpected $24 million estate tax after two recent deaths and that it doesn't provide the full expected cost-of-living increase for direct care workers. Also, projections for the following biennium present an approximately $246 million increase based on the ongoing spending in the budget plan. Republicans have filed several floor amendments to the budget, including to increase MaineCare funding for veterans homes, hire more state troopers, remove the proposed increase to the cigarette tax and ensure timely payments to service providers. Arata and Rep. Ken Fredette (R-Newport), who is also on the committee, argued that the state's budgetary needs for the next fiscal year have already been met. 'This is a tax and spend supplemental budget,' Fredette said. In March, the Democratic majority pushed through a two-year budget plan without Republican support and formally adjourned in order to start the clock for those funds to become available in 90 days, which will be on Friday. Senate Republicans refused to back an alternative short-term plan that would have immediately filled the current deficit for MaineCare, the state's Medicaid program, because it did not include structural reform to the program. That budget continued funding for state services at the same level while also providing one-time funding for MaineCare and other urgent needs. But it didn't include any of the policy changes Mills proposed to address the deficit and flattening revenues. Some Republican legislators tried to collect signatures to allow Maine voters to overturn the budget passed in March but failed to reach the needed threshold, the leader of the people's veto effort, Rep. Gary Drinkwater of Milford, announced on Tuesday. SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
09-06-2025
- Business
- Yahoo
With less than two weeks left, lawmakers still debating budget plan
The offices of the Joint Standing Committee on Appropriations and Financial Affairs in the State House in Augusta. (Photo by Jim Neuger/ Maine Morning Star) 'We will make it work. We're going to be done by the 18th, so just buckle up for the ride.' That's what Sen. Peggy Rotundo (D-Lewiston), co-chair of the Maine Legislature's Appropriations and Financial Affairs Committee, told Rep. Ken Fredette (R-Newport) when he asked late Thursday afternoon if there was a deadline the committee is working toward to finalize a budget proposal. Legislative leaders have said the intention is to complete all work by June 18, what had been the statutory adjournment date for the first regular session. Though, the Legislature is now in a special session, without a formal deadline. In March, the Democratic majority pushed through a roughly $11.3 billion, two-year budget plan without Republican support and formally adjourned in order to start the clock for those funds to become available in 90 days. Senate Republicans refused to back an alternative short-term plan that would have immediately filled the current deficit for MaineCare, the state's Medicaid program, because it did not include structural reform to the program. The budget that did pass continued funding for state services at the same level while also providing one-time funding for MaineCare and other urgent needs. The two-year budget was 'not the last word.' Here's what comes next. But with those appropriations not available until June 20, health care providers have warned of depleted funds hampering services. The budget did not include any of the policy changes Gov. Janet Mills proposed, such as tax increases and program cuts, to address the deficit and flattening revenues. These proposals and others from lawmakers are now being weighed by the appropriations committee as it crafts the next iteration of the budget. During the committee's last meeting on Thursday, it made a handful of decisions. The majority of its members rejected a tax on Maine pharmacies the governor had proposed, while voting in favor of additional funding and rate reform for nursing homes. The pharmacy tax would have imposed a 70-cent tax on every outpatient prescription filled by Maine pharmacies, the revenue from which the Mills administration said it would use to leverage additional federal dollars and eventually increase MaineCare reimbursements. 'I haven't voted for any items,' said Republican budget lead Jack Ducharme of Madison on Thursday. 'Yet, this will be my first, because I believe that we already collect too much taxes.' With a 10-2 vote, other Republicans backed removing the tax too, though the hold outs noted that their opposition was because of a lack of clarity about the overall budget plan. 'I applaud the work of the majority in terms of removing this,' Fredette said. 'However, I will be consistent in reviewing the overall global budget in determining whether or not I will support it.' That sentiment was also shared ahead of the committee voting 9-3 in favor of $20 million in additional funding for nursing homes over the biennium. This includes a $6.5 million investment for rate reform to support the direct care workforce and incentivize permanent staff, which would in turn unlock $12.2 million in funding from the federal government. 'Nursing home rate reform is very important to us, however at this particular time we have not had a discussion about where additional general funds come from that we're going to need,' Ducharme said. 'In order for me to support this, even though I would historically support something like this, I want to know where the money's coming from.' Other Republicans had a different take. While Rep. Amy Bradstreet Arata of New Gloucester would also like to know where the funds are coming from, 'I feel right about supporting this,' she said. 'I might not support the entire package, but I feel better knowing that this is in there, ultimately.' In a statement shared after the votes, Rotundo said supporting access to health care is a priority this session. 'It's important to note that a budget isn't built all at once,' Rotundo added. 'It comes together line by line, through careful consideration of the proposals and thoughtful votes like the ones we took today in committee.' Those line-by-line votes will be continuing this week, including on the governor's other proposed taxes on cigarettes, cannabis, streaming services, pensions and ambulances. The committee will also consider Mills' proposals to cut certain child and health care programs. Governor, Democrats split on regressive or progressive tax changes to close budget gap The proposed cuts include reversing the state's recent investments in child care by reducing worker stipends by $30 million to bring them back to 2022 levels, a roughly $8 million cut to low-income food assistance for asylum seekers who have received work permits but are looking for employment, and cutting funding for two crisis receiving centers established by the Legislature in the wake of the Lewiston mass shooting. Mills also proposed adding stricter limits to General Assistance, some of which were considered in the change package that failed but not ultimately included in the initial two-year budget passed in March. Advocates and lawmakers rallied in Augusta last week to urge the Legislature to reject Mills' proposed cuts and instead continue to fund these programs by taxing the wealthy. Such proposals are in LD 1089, which would raise taxes on incomes over $1 million to fund public education, and LD 1879, which would raise the tax rate on corporations to support the agricultural economy. Another proposal, LD 229, would adjust the state's tax brackets. These bills have yet to receive floor votes. These decisions are also clouded by federal uncertainty, with Maine's Revenue Forecasting Committee already discussing the possibility of having to return this summer after a federal budget is passed to adjust revenue expectations. As the appropriations committee continues to shape the budget plan this week, lawmakers are also expected to cast hundreds of votes on other legislation. Among the bills already passed, more than 100 have been placed on the appropriations table to vie for funding. SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
19-03-2025
- Business
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Lawmakers hope to support affordable housing construction without adding to budget
Members of the Legislature's Appropriations and Financial Affairs Committee on May 7, 2024. From left to right, Sen. Jill Duson (D-Cumberland) and co-chairs Sen. Peggy Rotundo (D-Androscoggin) and Rep. Melanie Sachs (D-Freeport). (Photo by Emma Davis/ Maine Morning Star) With an eye toward the need to rein in state spending, a plan that the budget committee's Senate chair says will help build more affordable housing without adding to the budget is headed to the floor. On Wednesday, the Legislature's Taxation Committee voted 5-4 in favor of LD 146, an adjustment to the stipulations of a tax credit that housing developers and financiers testified in support of last month. The vote was party line, with Democrats in favor, and four members were absent. When introducing the legislation, Sen. Peggy Rotundo (D-Lewiston), who co-chairs the Appropriations and Financial Affairs Committee, said the deficit the state is facing over the next biennium limits what is possible when it comes to funding more affordable housing development, even though Maine still has a significant shortage despite recent investments. Rotundo sees a solution in changing the timeframe for accessing credits through the Historic Property Rehabilitation Tax Credit, which encourages private sector investment in the rehabilitation and re-use of historic buildings. In 2008, the Legislature instituted a cap of $5 million on the credit a developer can take in one year. In 2013, through a bill Rotundo co-sponsored, lawmakers clarified that if a developer is doing a project in a large complex, the $5 million annual cap pertains to each building, rather than the entire complex. 'As construction costs have increased dramatically since 2013 and even more since 2008, the $5 million credit no longer carries the same substantial incentive it used to,' Rotundo said. Rotundo's bill would double the tax credit to $10 million over a period of two years. It makes no changes to the $5 million maximum allowed in subsequent years. Rotundo attempted to institute this change with a last-minute amendment last session, however that bill died in nonconcurrence. Those who testified during the public hearing for the bill in February said the current model incentivizes developers to delay or space out projects across multiple tax years in order to not exceed the $5 million annual cap. Moving to a higher credit over a longer time period will help change that, said John Kaminski, an attorney at Drummond Woodson who has been involved in these projects since the credit was enacted in 2008. A recent example of such complications occurred when Redfern Properties and New Height Group transformed the old Mercy Hospital campus in Portland into the apartment complex now known as the Nightingale, said John Egan, senior program officer at the Genesis Community Loan Fund. 'Had this law been in effect at the time, the project could have been completed more efficiently with reduced delays and lower costs,' Egan said. While not all historic tax credit projects are developed into housing, Laura Mitchell, executive director of the Maine Affordable Housing Coalition, said more than two-thirds do. Mitchell pointed to a January report by the New York-based consultancy HR&A Advisors that cited the historic tax credit as a recommended tool for Maine to increase housing production and strengthen the construction workforce. Tara Kelly, executive director of the statewide nonprofit Maine Preservation, pointed to a study her organization did of the period from 2009 to 2019 that found renovations aided by this tax credit added more than $166 million to local property tax rolls and another $19 million in new income and sales tax revenues. 'During this period, the program generated $3 million more to the state's coffers than it cost,' Kelly said. Others cited a 2021 report from the Office of Program Evaluation and Government Accountability that found that the program's structure and administration was sound and that its benefits exceed historic preservation goals. Andrew LeBlanc, a commercial real estate developer, provided a first-hand example of how the tax credit helped him in 2019 transform vacant buildings in Augusta into three retail spaces and 23 apartments, which he said are now fully occupied — one by him, his wife and child. The project cost $7 million and he got $1.2 million from the tax credit, which he said enabled him to get institutional equity investment. Now, LeBlanc is working to redevelop the old Federal Building in downtown Augusta into a boutique hotel, which he said is the same size as his former project but has an expected cost of $30 million. 'We're up against the cap that you've heard a lot about today,' LeBlanc said. Of note, the contents of this bill are also included as a section of LD 435, so lawmakers may ultimately pursue this change through another vehicle. SUPPORT: YOU MAKE OUR WORK POSSIBLE
