AUGUSTA, Maine — Democrats on the Maine Legislature’s budget panel moved late Tuesday to add a millionaire tax to Gov. Janet Mills’ spending plan over Republican opposition.
Lawmakers were still voting on the package after 10 p.m. It will be the last major spending proposal of the governor’s tenure and comes as the 78-year-old navigates a difficult Democratic primary against Graham Platner for the right to take on five-term U.S. Sen. Susan Collins, a Republican who is a top target for Democrats looking to win back the Senate.
This has pushed her to the left in the State House. Mills has long resisted progressive calls to raise taxes on high earners. Her $300 relief checks for most Mainers made it into the plan, although one Democrat defected and State House watchers are unsure whether her party has enough support among rank-and-file members who are skeptical of them.
Mills’ original proposal added $275 million in new spending to raise the current budget to nearly $12 billion over two years. That topline figure does not include roughly $290 million in the governor’s plan from the state’s reserve fund to pay for relief checks and housing initiatives.
The millionaire tax looks to be the biggest addition to the budget proposal. Democrats said the 2% tax on income over $1 million would apply to just over 2,600 income tax filers, generating $150 million over two years. This matched a proposal from Rep. Cheryl Golek, D-Harpswell, that is a priority for progressive groups including the Maine Center for Economic Policy.
Mills’ tax office opposed that bill in a hearing last year. She also warded Democrats off from raising income taxes early in her tenure. But she exited her 2022 reelection over former Gov. Paul LePage by approving a paid family and medical leave plan funded by a payroll tax.
Democrats can pass this budget without any Republican votes. Rep. Ken Fredette, R-Newport, listed off problems across the health care sector and schools, saying the plan is not “helping to move the ball” on many of the state’s key issues.
“I am glad to be able to sit here and sit around this horseshoe and have this discussion and simultaneously make sure that we’re taxing people who can afford the tax,” Rep. Michael Brennan, D-Portland, fired back in the defense of the budget plan.
Mills’ relief checks, which would go to 725,000 Mainers at a cost of $218 million, were immediately met with resistance by Republicans as a political stunt. Many Democrats have been reluctant to embrace them, but the party voted them into the budget on Tuesday.
In a potentially ominous sign for Mills, Sen. Cameron Reny, D-Bristol, voted with Republican appropriators against that part of the plan. The House is closely divided, with 75 Democrats, 72 Republicans and three unenrolled members, so just a few defections would doom the plan and deal a major blow to the governor’s election-year agenda.
Appropriators made other changes on Monday, moving Maine away from several of the tax changes in President Donald Trump’s One Big Beautiful Bill Act. The state will follow Mills’ plan to not conform to popular items including no taxes on tips and overtime as well as phasing out the retail side of the often-scrutinized Business Equipment Tax Exemption.
