AUGUSTA, Maine — Gov. Paul LePage’s finance commissioner presented lawmakers with an additional supplemental budget for state government that further cuts spending but also includes tax breaks for certain businesses, retirees and members of military.
The budget, presented by Sawin Millett on Tuesday, would slash general assistance reimbursement to service center communities such as Bangor, Portland and Lewiston and would eliminate all public funding for the Maine Public Broadcasting Network.
Finance Commissioner Millett told members of the Appropriations Committee that the $37 million budget bill at one point was much bigger but, “many of the most controversial items were stripped.”
That prompted Rep. Peggy Rotundo of Lewiston, the lead Democrat on the committee, to reply: “I can only imagine what it would have looked like.”
The budget cuts $37 million from the $6.1 billion biennial budget for 2012-13 that passed last year, but it also includes $37 million in new spending. So, essentially, the bill is revenue neutral, but, in fact, $14 million was cut from the budget to address a revenue shortfall announced recently.
Adrienne Bennett, the governor’s spokeswoman, said the proposal represents a reprioritization in certain areas.
Tax exemptions for wood harvesting equipment, for instance, match exemptions that already exist for equipment used in fisheries and agricultural industries.
Additional exemptions from income taxes are proposed for retirement income. Beginning in 2014, the state also would exempt military pay for service out of state from Maine income taxes.
“We want to encourage people who are stationed out of state to come back to Maine when they’re done,” Bennett explained.
But Rotundo said many of the tax breaks don’t go into effect until 2014 and they are not paid for.
“I think it makes people feel good to say ‘look, we passed this tax break,’ but all it does is leave a hole in the budget,” she said.
Sen. Richard Rosen, R-Bucksport, co-chair of Appropriations, said he suspected that there will be some pieces that “don’t sit well” with people, but it addresses areas that have been over budget and identifies new spending priorities. Among those, he said, was funds to increase security at courthouses, something Maine’s Chief Justice, Leigh Saufley, has asked for for years.
Lawmakers were not presented Tuesday with the printed budget, as expected, but instead received an overview from Millett.
The Appropriations Committee likely will get more information on Wednesday, but it wasn’t clear Tuesday when the printed budget bill would be made available.
“These are sweeping changes but [we] are still trying to get a sense of the impact,” Rotundo said. “There isn’t a lot of information here for the public.”
Public hearings in the budget bill are tentatively scheduled for Monday, Tuesday and Wednesday of next week. Sen. Dawn Hill, D-York, said the Appropriations Committee can’t begin work on the bill until after that, so that doesn’t give lawmakers much time to debate the proposal.
“We are long on work and short on time, that’s for sure,” Rosen said.
Some of the elements in the supplemental budget — specifically cuts to general assistance and MPBN — were initially included in the governor’s biennial budget proposal last year. Both were restored to the spending plan.
Asked Tuesday why the governor was proposing cuts that were rejected less than a year ago, Bennett said “the current general assistance system encourages spending. It’s not sustainable.”
Asked about MPBN, Bennett said the governor believes the public radio and television station should be funded by advertisers, not taxpayer dollars.
Hill said she was flabbergasted to see the $1.7 million cut to MPBN included, particularly in light of the fight last year. She also criticized the fact that some elements of the budget proposal are not really related to the budget at all.
“These budget bills have become like a dumpster to throw everything into if they can’t get passed on their own,” she said.
But Rosen said last year’s debate over MPBN sent a signal that the organization should begin looking for other sources of funding for its programming.
The supplemental budget proposal comes only a couple weeks after lawmakers made final a $145 million supplemental spending plan that dealt with a big shortfall at the Department of Health and Human Services. That budget only dealt with the 2012 fiscal year, which ends in June.
Lawmakers still have to deal with a DHHS shortfall for 2013, estimated at $85-$90 million. That process is now delayed after last week’s revelation that 19,000 MaineCare recipients were on the rolls to receive benefits they were not eligible for because of a computer glitch.
The proposed supplemental budget is available online at: http://www.maine.gov/budget/budgetinfo/2012-13SecondSupplemental.htm.