When leaders introduce a plan by reiterating compromise means not everyone will like everything that was negotiated, you know the deal is far from perfect. So it is with a state budget, negotiated behind closed doors, that legislative leaders unveiled — and then rushed to the House floor — on Tuesday. The question lawmakers must answer before they decide how to vote is whether the compromise budget has enough positives to offset its negatives.
Legislative leaders from both parties have done their fellow lawmakers no favors by hammering out a deal so late in the session — and mostly in secret — that their colleagues have almost no choice but to vote yes or face a state shutdown. This is complicated by the fact that Gov. Paul LePage is likely to veto the budget — as he did two years ago — and take the full 10 days the Constitution allows him to make that decision. Two-thirds votes in the House and Senate then would be necessary to override the veto. If a veto is imminent, the governor should issue it promptly and let the Legislature finish its work as quickly as possible.
What would the state get if this budget were to be enacted?
Lower income taxes, but not as low as LePage or Republican lawmakers initially wanted. The state sales tax would remain at the current 5.5 percent level — instead of drop back down to 5 percent, as it was supposed to do at the end of this month — but it would not be extended to services and recreational activities, as the governor proposed. The meals tax would remain at 8 percent, and the lodging tax would rise to 9 percent on Jan. 1, 2016. Corporate taxes wouldn’t be reduced, but the estate tax exemption would grow from $2 million to nearly $5.5 million, matching the federal exemption. To help low-income residents, the Earned Income Tax Credit would be made refundable, a needed change that previously has been rejected. A sales tax fairness credit would offset the sales tax burden for some low-income residents.
Large income tax cuts formed the crux of the governor’s proposed budget, so the plan shifted the burden onto property taxpayers in numerous ways. The compromise budget lessens this impact. For example, it would maintain revenue sharing at current levels; LePage proposed to eliminate it. It also doubles the homestead exemption for all families, whereas the governor proposed to limit it to seniors. It also increases school funding by $80 million beyond LePage’s proposal.
On the “welfare” side, the end result is mixed. General Assistance reimbursements from the state to municipalities would change to 70 percent for all communities, compared to the current system, in which the communities that issue the most General Assistance receive 90 percent reimbursement once they’ve reached a particular spending threshold. The result of this change would be less money money for cities such as Bangor and Portland but not the steep cut proposed by LePage. The budget also would take steps to end the so-called welfare cliff, incorporating elements from separate proposals offered by LePage and Democratic Rep. Drew Gattine. As for new asylum seekers in Maine, they would be required to work when they are permitted to do so in order to receive benefits, such as food assistance, Temporary Assistance for Needy Families and supplemental security income, which could not last more than 240 days. This group unfairly has been stigmatized, as Republicans repeatedly accuse Democrats of supporting “illegal alien welfare.”
The compromise budget would increase funding to reduce waitlists for services for adults with disabilities but not to the level LePage wanted. It also would maintain funding for the Drugs for the Elderly Program and the Fund for a Healthy Maine, which LePage proposed to divert.
For those who have objections to the budget, the question is, what changes are possible? Given the timing, it would seem not many and certainly not big ones.
“The budget doesn’t get better at this point,” House Majority Leader Jeff McCabe said Tuesday afternoon. “We have divided government, so we have to count [votes].”
Practicality is important but so, too, is ensuring spending and tax cuts for the next two years match state priorities. And this budget plan does a better job of that than other proposals that have been circulated during this long series of negotiations — essentially the best the current political environment would allow.
