Attorney general says LePage’s temporary budget fix is illegal

Posted June 20, 2013, at 11:48 a.m.
Last modified June 21, 2013, at 5:40 a.m.
Janet Mills
John Clarke Russ | BDN
Janet Mills Buy Photo
Governor Paul LePage renewed his pledge to veto the state budget at an Americans for Prosperity rally at the State House in Augusta Thursday.
Governor Paul LePage renewed his pledge to veto the state budget at an Americans for Prosperity rally at the State House in Augusta Thursday. Buy Photo
Governor Paul LePage renews his pledge to veto the state budget at an Americans for Prosperity  rally at the State House in Augusta Thursday.
Governor Paul LePage renews his pledge to veto the state budget at an Americans for Prosperity rally at the State House in Augusta Thursday. Buy Photo
Governor Paul LePage renews his pledge to veto the state budget at an Americans for Prosperity  rally at the State House in Augusta Thursday.
Governor Paul LePage renews his pledge to veto the state budget at an Americans for Prosperity rally at the State House in Augusta Thursday. Buy Photo
Governor Paul LePage renews his pledge to veto the state budget at an Americans for Prosperity  rally at the State House in Augusta Thursday.
Governor Paul LePage renews his pledge to veto the state budget at an Americans for Prosperity rally at the State House in Augusta Thursday. Buy Photo
Governor Paul LePage renews his pledge to veto the state budget at an Americans for Prosperity  rally at the State House in Augusta Thursday.
Governor Paul LePage renews his pledge to veto the state budget at an Americans for Prosperity rally at the State House in Augusta Thursday. Buy Photo
Governor Paul LePage renewed his pledge to veto the state budget at an Americans for Prosperity rally at the State House in Augusta Thursday.
Governor Paul LePage renewed his pledge to veto the state budget at an Americans for Prosperity rally at the State House in Augusta Thursday. Buy Photo

AUGUSTA, Maine — Maine Attorney General Janet Mills told legislative leaders Thursday that a temporary budget fix proposed earlier in the day by Republican Gov. Paul LePage is illegal under Maine law.

The administration’s legal counsel disagreed.

During a rally against tax increases Thursday at the State House, LePage again pledged to veto the biennial budget bill sent to him by lawmakers and suggested a 60-day continuing resolution fix that would keep government open while giving lawmakers another two months to work on a budget compromise that doesn’t include tax increases.

A continuing resolution is a tool used by some government entities, including Congress, to keep government running when lawmakers can’t agree on an actual budget bill.

“The 60-day continuing resolution would allow Maine state employees to work, would prevent a government shutdown, and would avoid an unnecessary tax increase,” said LePage. “I am calling on Republicans and Democrats to support this initiative.”

But Mills, a Democrat, said in a letter to legislative leaders Thursday afternoon that a continuing resolution is illegal under Maine law.

“Maine law requires a biennial budget,” wrote Mills. “Even if it did not do so, any short-term emergency budget, passed with a two-thirds vote, would throw the state into financial uncertainty and would face significant opposition from bondholders, schools, hospitals and thousands of entities to whom the state has continuing and long-term obligations.”

Michael Cianchette, LePage’s chief legal counsel, said the continuing resolution would be legal. He said a short-term budget that does not call for state government to spend more than it takes in would not violate the Maine Constitution. The short-term budget could be presented as an emergency bill, which would take effect immediately if it passes with two-thirds support of the House and Senate and gains the governor’s signature.

“If the Legislature passes a short-term budget and the governor signs it, it becomes the law,” he said.

Cianchette made that point in a letter he sent Thursday afternoon to legislative leaders.

“As the Attorney General correctly points out, Maine law does allow for short-term (e.g. non-biennial, not full fiscal year) budgets,” he wrote. “The practical result of this would be limited authorized spending (for example, 2 months worth of payroll and other expenses), with projected revenues greatly exceeding any appropriations and allocations. This would provide time for further negotiations while removing the specter of a shutdown — something we all seek to avoid.”

During the rally Thursday morning, the governor reiterated his opposition to any tax increases, telling the crowd of supporters that he will veto the budget and propose a 60-day continuing resolution designed to avoid a state government shutdown on July 1 if a budget is not in place.

LePage said he hopes to meet with Democratic legislative leaders to discuss the 60-day resolution, which would keep state workers on the job while lawmakers attempt to craft a budget that he can accept.

“We can’t improve the budget alone from my office,” LePage said. “We need the legislative leaders to sit down around a table and talk.”

But that conversation will go nowhere if lawmakers propose taxes, LePage vowed.

“I will continue to fight against tax increase, even the little ones,” he said, eliciting cheers from rally attendees.

Senate Majority Leader Seth Goodall, D-Richmond, said his caucus doesn’t see the need to talk about a continuing resolution because they are confident they can garner enough votes from Republicans to override LePage’s veto.

“We’re confident we have the votes,” said Goodall.

Senate Minority Leader Michael Thibodeau, R-Winterport, said the governor’s proposal could be a “game changer.”

“I would encourage the other leaders to take this into consideration,” he said. “It’s a serious proposal.”

The two-year budget that the Legislature sent to LePage includes temporary increases in the sales tax from 5 percent to 5.5 percent and in the meals-and-lodging taxes from 7 percent to 8 percent. Those hikes, which would expire on June 30, 2015, represent a compromise forged by Democrats, who refused to accept LePage’s plan to eliminate all municipal revenue sharing for the next two years, and Republicans, who refused to consider Democrats’ call to roll back income tax cuts enacted at the beginning of this year.

The budget that LePage pledges to veto passed the House and Senate with two-thirds majorities. If those tallies hold up in veto override votes, the budget would take effect as written. Five Republicans in the Senate and 23 in the House joined most Democrats and independents in voting for the budget.

At Thursday’s rally, LePage urged Mainers to contact their legislators to express opposition to the budget and insist that they vote to uphold his veto.

The rally, sponsored by the Maine branch of a conservative national group called Americans for Prosperity, was announced earlier this week when LePage already had lawmakers’ biennial budget bill on his desk. LePage’s $6.3 billion proposal has been debated exhaustively in the Legislature since January, resulting in a unanimous recommendation by Republicans and Democrats on the influential Appropriations Committee earlier this month.

Along with numerous alterations to some of the thousands of line items in the budget bill, lawmakers opted to soften a two-year suspension of municipal revenue sharing and cuts to property tax relief programs, which LePage proposed in order to save some $275 million over the two years that begin July 1. They also added $30 million to increase funding to public schools and allocated $9 million to partially restore merit and longevity pay for state employees who haven’t had a raise in more than four years.

While LePage has said he disliked some of the provisions in his own budget, including the cut to revenue sharing, which has been maligned by municipal officials across Maine, his main objection to the budget compromise is that it would cut corporate tax deductions and temporarily raise the state’s sales, meals and lodging taxes. Those initiatives could raise as much as $178 million over the biennium, according to the Legislature’s Appropriations Committee.

LePage has argued since before he was a gubernatorial candidate that state government spends too much and vowed to make structural changes that will save Maine hundreds of millions of dollars over the long term. He also has passionately opposed any discussions of tax increases, though his critics say that cutting municipal revenue sharing, curtailing property tax relief programs and attempting to pass some of the cost of teacher retirements to the local level would lead to substantial property tax increases across the state.

The governor has been threatening to veto the budget for weeks but said he would use most of the 10 days afforded him by the law to deliberate over it. The budget was put on his desk on Friday, June 14, giving him until early next week to make a decision.

The Legislature, which plans to return to the State House on June 26 after recessing early Thursday morning, would have seven days to attempt to override the veto. The votes in favor of the budget on June 13 were 102-43 in the House and 25-10 in the Senate.

Americans for Prosperity, which organized Thursday morning’s rally, is a nationwide organization that believes in reducing the size and intrusiveness of government at all levels.

Suzanne Hiltz, 28, of Chelsea, a mother of four young boys, argued that the Legislature has a responsibility to “run a household” in the same way that she does. “You have to live within your means. I buy what I can afford,” she said. As a mother, Hiltz said she worries that the state is spending more than it can afford will hurt future generations.

Bangor Daily News writer Kirsten Sylvain contributed to this report.

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