August 18, 2019

Budget-balancing debate occupies state lawmakers

AUGUSTA – With more talks under way concerning property tax relief and state borrowing, the Maine Legislature on Wednesday began to consider a Democratic budget-balancing package that Republicans said did too little to rein in future spending.

More than two dozen amendments to the supplemental spending bill were being readied for debate in the Senate and House of Representatives, with final votes on the package not expected until Thursday at the earliest.

In issuing its revised package, the Appropriations Committee’s Democratic majority stuck largely to the framework of Gov. John Baldacci’s original proposal, relying on a $38.5 million divestment of an internal service fund for retiree health, $11.4 million in property transfers and $9.4 million in anticipated Powerball lottery revenue to offset a $127 million Medicaid shortfall in the coming year.

The revised package, supported by Baldacci but opposed by Republican panelists, was designed to provide an additional $15 million to local schools and cover other spending.

Excluded from the package were what the administration would define as broad-based tax increases. But the tax debate continued Wednesday, as lawmakers, administration officials and other parties resumed discussions over the potential shape of a new legislative plan to ease the financial burden on property owners.

“There’s a lot of pressure,” said Democratic Rep. David Lemoine of Old Orchard Beach, the House chairman of the Taxation Committee, expressing optimism that a deal could emerge by the end of the week.

Baldacci has proposed an additional $25 million in school funding for the fiscal year that begins on July 1 and an additional $25 million for an expanded circuit-breaker program to aid some lower- and middle-income property taxpayers.

Late last month, the so-called Working Group of legislators voiced support for an immediate increase in local school aid of $40 million as a step toward boosting the state share of local school costs to 55 percent in 2010.

In return, officials of the Maine Municipal Association and the Maine Education Association said they could withdraw their support for a June referendum question that would require the state to raise its share to the 55 percent level immediately at a cost pegged at around $250 million.

Baldacci has flatly rejected using new taxes to help balance the budget, but has been perceived in many quarters to be less than adamant about including higher tax revenue of some kind in an overall proposal to reduce the local property tax burden.

“What we’re not considering is raising the sales tax,” said Baldacci spokesman Lee Umphrey. Umphrey also described Baldacci as resistant to a heightened tobacco tax.

Some lawmakers have suggested that the budget bill and tax relief be viewed in tandem, but the governor has sought to separate the issues and have them taken up serially.

“That’s another thing we’re not considering, coupling the two,” Umphrey said.

Also awaiting a statewide vote is still another proposal that would cap property taxes at $10 per $1,000 of assessed value based on values in 1996-97.

Lawmakers asked the state supreme court for an advisory opinion on such a tax cap’s constitutionality after questions about key provisions were raised by Attorney General Steven Rowe.

Democrats may be able, in effect, to enact a budget-balancing bill unilaterally but would need some level of Republican support to put new bond proposals before statewide voters.

With its budget chores completed, the Appropriations Committee listed bonds on its agenda Wednesday but made clear that actual voting was still to come.

Lawmakers are expected to take a break after this week and reconvene for a couple of days late this month.

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