Gov. Janet Mills delivers her State of the Budget address, Tuesday, Feb. 14, 2023, at the State House in Augusta, Maine. Credit: Robert F. Bukaty / AP

AUGUSTA, Maine — Gov. Janet Mills on Wednesday unveiled a nearly $900 million plan that would complete the state’s budget work for the year and looks likely to force another debate over taxes with Republicans.

The plan from Mills contains $432 million in new spending and $455 million in transfers and would grow the budget to just over $10.3 billion over two years. It leaves $12 million unallocated for the Legislature to consider, the Democratic governor’s office said Wednesday in a news release that did not include a copy of the submitted package but highlighted the plan.

Mills’ new budget comes after Democrats flexed their majorities in March to pass a two-year, $9.8 billion budget over the objections of Republicans. At that time, the minority party wanted to include $200 million in income tax cuts focused on the lowest bracket. They doubled that demand to $400 million after state forecasters predicted more revenue surpluses.

The governor sets that aside in her plan, which is mostly based on initiatives swept out of the last budget. The largest single item is $400 million for transportation in an effort to win up to $1 billion in matching federal funding, as well as $80 million for housing initiatives, which is $30 million more than Mills proposed in her last budget document.

In a statement, Mills said the document “lives within our means, using revenues in a responsible way to address serious, pressing issues.” Republicans kept things brief in a statement that teased an upcoming battle over tax cuts.

“We don’t find the Governor’s change package responsive to the times, or responsive to the needs of the Maine people,” it statement said.

Mills proposed $31 million to create a program offering grants to Maine-based emergency medical services throughout the state, nearly $5 million to fund a small portion of her proposal to revise and expand a group of business tax breaks and $4 million to double a refundable child care tax credit for working families.

Among education initiatives, the governor wants $50 million for the School Revolving Renovation Fund, which gives no-interest loans for school renovations and repairs. Other infrastructure requests include adding $22 million to an initially proposed $14 million for drinking and wastewater system improvements, $10 million for flood protection and $12 million to prepare for building offshore wind ports.

Mills is also trying to make good on her promise to tackle a state court case backlog by adding $3.2 million to create four trial court judgeships and hire more deputy marshals and clerks. The change package also proposes to repeal a tax on health care providers starting in 2025, which would be seven years after the federal government said it violated the law.

Top Democrats mentioned issues they are most focused on as they review the governor’s proposal and hinted that they may want to find more money for certain subjects, with a spokesperson for Senate President Troy Jackson of Allagash mentioning “child care, EMS and housing” as “top priorities for our caucus.”

House Speaker Rachel Talbot Ross, D-Portland, added in a statement late Wednesday night “we know there is more work that can be done to improve access to child care and provide thoughtful transitions from pandemic-related federal assistance programs.”

The major question now is whether the parties will agree to a spending deal or whether Democrats will move alone. In March, they quickly set aside a consensus process that governed state spending before their previous majority-only budget in 2021.

Under the normal process that requires bipartisan buy-in, budgets are negotiated in late June but approved with two-thirds majorities so they take effect immediately at the start of the new fiscal year in July. If Republicans do not join Democrats to pass this next spending proposal, it will take effect three months after lawmakers leave for the year.

New estimates in late April from the state’s Revenue Forecasting Committee said Maine would likely see $294 million more in tax revenue through mid-2025 than previously anticipated, which led the Republicans to double their tax-cut demand to $400 million.

The availability of extra cash often generates debate over how much of it the state should either spend now to help residents and various initiatives or sock away for the future, especially for any potential economic downturn. But Mills noted in April the state’s rainy day fund has grown to a record high of more than $900 million, nearly reaching its legally allowed maximum.

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Billy Kobin

Billy Kobin is a politics reporter who joined the Bangor Daily News in 2023. He grew up in Wisconsin and previously worked at The Indianapolis Star and The Courier Journal (Louisville, Ky.) after graduating...