Politics
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AUGUSTA, Maine — Democrats who control the Legislature’s budget committee signed off this weekend on an addition to the $11.3 billion state budget through 2027 that includes new taxes and reversals of cuts that Gov. Janet Mills proposed.
Highlights included the decision to raise Maine’s cigarette tax from $2 to $3.50 per pack — Mills had only proposed a $1 increase in her initial plan — and to block the Democratic governor’s attempts to cut child care worker stipends by $30 million and Head Start funding by $7 million. The higher cigarette tax is expected to raise $111 million through 2027.
The exact price tag is not yet clear, but it will exceed $240 million. Thursday’s mostly partisan votes saw the appropriations committee approve a mix of new spending and fee hikes, such as for fishing licenses, alongside cuts to balance the budget in the face of having only $130 million in projected available revenue and $120 million needed for a MaineCare funding gap.
The panel also approved Mills’ proposed 5.5 percent tax on streaming services such as Netflix and increasing the recreational marijuana sales tax from 10 to 14 percent while lowering marijuana excise tax rates. Democratic members had already defeated the governor’s proposed child care cuts along with her attempts to add new ambulance and pharmacy taxes.
It has been another testy budget process marked by frequent disagreements between Democratic and Republican lawmakers. Things got off to a rocky start earlier in the year when Republicans opposed a short-term budget to fill a $118 million MaineCare deficit over wanting to add in controversial work requirements to try to rein in costs.
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Democrats pivoted by passing an $11.3 billion budget in March that only filled the MaineCare gap for one year. That led to weeks of questions over what the majority party would seek with a final budget addition. Additional spending that both Mills and Democratic lawmakers agreed on not including, for example, was $1.6 million for a Kennebec County crisis receiving center and $450,000 for a similar Aroostook County center treating people in mental health emergencies.
“We don’t know what is to come from the federal government, which is why this is not a flashy budget,” Sen. Peggy Rotundo, D-Lewiston, the co-chair of the budget panel, said in a statement after lawmakers advanced the spending plan after 1 a.m. Saturday. “It is steady during a time of external chaos.”
The mostly party-line votes covered everything from modernizing a National Guard readiness center in Bangor and doubling the child tax credit to $600 to funding five new legislative staff positions and paying for new Maine State Police vehicles. Republicans, even if signaling support for the intent of an item, opposed most moves out of their broader frustration with feeling cut out of the budget process for years.
The budget panel also revisited an issue that arose during previous budget debates, Democrats approved Thursday increasing income eligibility for the pension tax deduction, such as from $200,000 to $250,000 for joint filers. Rep. Mark Blier, R-Buxton, criticized the move as penalizing workers.
“The money that we’re taking belongs to them,” Blier said. “It doesn’t belong to us.”
The House and Senate will have to approve the final budget addition, with lawmakers seeking to leave Augusta for the year by Wednesday. Lawmakers have been holding late-night, marathon voting sessions on hundreds of remaining bills that may also face hurdles in receiving funding.
BDN writer Michael Shepherd contributed to this report.
