Maine lawmakers spend day in closed-door meetings on $6.1 billion budget

Posted May 31, 2011, at 8:12 p.m.

AUGUSTA, Maine — With just two weeks left in the 2011 legislative session, Republican and Democratic negotiators are still attempting to reach common ground on a handful of politically charged issues that likely will dominate debate on the state budget.

Lawmakers on the Legislature’s budget-writing committee estimate they have settled 80 percent to 85 percent of the items contained within the $6.1 billion budget that will fund state government for the two-year cycle that begins July 1.

But Republicans and Democrats on the committee are struggling with the remaining items, as evidenced by the fact that the committee as a whole barely met on Tuesday but instead saw members spend much of the day in closed-door, partisan meetings.

“The remaining 20 percent are extremely challenging issues that will take a lot of work,” said Sen. Richard Rosen, R-Bucksport, co-chairman of the Appropriations and Financial Affairs Committee.

At the top of the list of the “challenging” and some would say partisan issues are: changes to the pension system for state employees and retirees, cuts to Medicaid and social service programs, and Republican-drafted plans for roughly $200 million in tax cuts.

Settling those issues could be key to winning enough support from Democrats to garner a two-thirds vote needed on the House and Senate floors.

“We haven’t really seen the movement or compromise that is needed to bring things together,” said Rep. David Webster, D-Freeport, an Appropriations Committee member.

The political sensitivity of the unresolved budget issues will be on full display in the State House on Wednesday when retired state employees and other union members hold a rally to decry Gov. Paul LePage’s proposed changes to the pension system.

LePage has proposed increasing state employees’ contributions to the pension system by 2 percent, raising the minimum retirement age from 60 to 62, and freezing and then capping cost-of-living adjustment for current retirees.

The administration describes the changes as critical steps to beginning to plug a financial hole in the pension system for state employees that exceeds $4 billion.

But leaders of the Maine State Employees Association and other unions accuse the governor of forcing public workers and retirees to pay more in order to pay for tax cuts for some of Maine’s wealthiest residents.

Indeed, the $200 million in tax cuts could become the biggest sticking point in the $6.1 billion budget.

Republican members of the Legislature’s Taxation Committee have proposed reducing Maine’s top income tax rate from 8.5 percent to 7.95 percent. Factoring in additional changes in the tax rate structure, the new system would exempt an additional 70,000 low-income Mainers from owing any income taxes.

But Democrats are likely to fight another proposal — originally proposed by the LePage administration and endorsed by Republican members of the Taxation Committee — to double the estate tax exemption from $1 million to $2 million.

And then there are the LePage administration’s controversial Medicaid proposals.

The administration wants to eliminate MaineCare funding for roughly 12,000 parents who earn more than 133 percent of the federal poverty level. Additionally, LePage has proposed ending MaineCare benefits for 16,000 low-income adults without children.

Those changes to MaineCare — the state’s Medicaid program — and other cuts were announced in early May as part of an effort to plug a new $164 million budget hole. But  Democrats have indicated they are uncomfortable with the Medicaid cuts.

Both Republican and Democratic committee members said they do not expect to reach agreement on every controversial budget issue. But achieving a unanimous — if symbolic — committee endorsement for the overall budget is still the goal.

Rep. Kenneth Fredette, R-Newport, described the majority of issues remaining on the table as dealing with important “political values” rather than “partisan values” that need to be aired. But committee members need to be able to justify the budget decisions to their respective caucuses.

“It is important that we have a unanimous budget because we all need to make arguments to our caucuses so that we can get a two-thirds majority,” Fredette said.

Webster, the Freeport Democrat, agreed.

“We have two caucuses with two very different positions and we need to bring them together so that we can get the two-thirds majority,” Webster said.

Rosen said he and other committee leaders hope to complete their work on the budget by the end of this week.

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