AUGUSTA, Maine — Maine lawmakers came to a late-night budget deal this week, but Republicans still look split on whether it is enough to help Democrats enact their top priorities.
The breakthrough came early Wednesday, when all but one member of the Legislature’s budget committee voted around 3:45 a.m. to advance a budget addition likely to cost $800 million or more. Republicans joined the Democratic-led document largely because it included a pension tax change that they authored alongside other tax changes favored by both parties.
It falls far short of the GOP’s initial demand of $200 million in income tax cuts. It also has several Democratic priorities that did not win bipartisan support, including $25 million to launch a paid family and medical leave program that all Republicans opposed.
For months, Democrats have flexed their majorities to pass many big bills, including a hotly contested abortion bill that narrowly cleared the House this week. While party leaders say Republicans have improved the spending plan, conservatives may take a more aggressive line.
The proposed addition is “yet another example of radical government spending continuing to increase while Maine families are struggling,” said Rep. Laurel Libby, R-Auburn, who also criticized Gov. Janet Mills for promising last year to not raise taxes but now supporting the paid leave plan that is funded by a payroll tax of up to 1 percent.
“With record state revenue there is no reason to raise taxes, and any Republican that votes for this is helping speed Maine’s future to a socialist dystopia,” Libby wrote in an email. “Our fingerprints should NOT be on this supplemental budget.”
To take effect immediately, Democrat and Republican leaders need to win the support of two-thirds of members in each chamber. Final votes could play out like the January debate on a heating aid package that 39 Republicans, including Libby, opposed in both chambers in large part due to wanting tax cuts instead of $450 relief checks that eventually passed.
The cost of the budget addition was not yet clear on Thursday, but it comes with several tax reforms and amendments to the nearly $900 million plan that Mills unveiled in May, also including a fix to Maine’s popular property tax freeze program for seniors and an increase based on inflation to the $300 child tax credit.
Pension changes came from a bill championed by House Minority Leader Billy Bob Faulkingham, R-Winter Harbor, and they will expedite a tax exemption on that income $30,000 to $35,000 and then add to it by indexing it to the maximum Social Security benefit.
“I was glad [Democrats] finally had a willingness to accept some of our tax relief proposals,” Faulkingham said.
But the top House Republican cautioned that his members are at the point where they can “accept some relief and do some good for the people” or “just walk away and not participate because of all the other stuff we’re not happy with.”
He favors the first option, even though Faulkingham said there are many things his caucus is united in opposing, from the paid leave funding to a lack of funding for Maine Veterans’ Homes and county jails, among other concerns.
The budget committee member who voted against the budget bill, Rep. Jack Ducharme, R-Madison, cited concerns with spending nearly all revenue expected to be generated and the way transfers are handled. Ducharme’s proposal to cut the rate for Maine’s lowest income tax bracket from 5.8 percent to 4.5 also did not win support.
Another argument came from the conservative Maine Policy Institute, which urged Republicans to hold out for more if they are going to allow their votes to bless Democratic priorities, as CEO Matthew Gagnon argued in a Bangor Daily News column this week.
But veteran budget negotiators see benefits in the deal. It has about $50 million in total tax relief that will grow to $150 million by the next two-year budget cycle, said Sen. Rick Bennett, R-Oxford. Lawmakers are still waiting to see if there will be up to $12 million for lawmakers to use to fund lingering bills.
“I think it’s worthy of support,” Bennett said.
In 2021, Democrats, who have controlled the Legislature for five years, passed a two-year budget by a simple majority for the first time since 2006. That process repeated itself in March, when Democrats ignored Republican demands for income tax cuts but said they could get considered later in the year.
That consideration came late in the process. Faulkingham credited Republicans on the budget committee for advocating for the tax relief but placed blame on Democrats for ignoring his party “for the most part until the 11th hour.”
Rank-and-file members will soon have their say, and some Republicans are suspicious. Rep. Scott Cyrway of Albion, said his biggest concern is whether Democrats will pull a partisan maneuver by then.
“I think they’ve taken advantage of us because of their numbers,” Cyrway said.