Democrats counterpunch LePage, roll out alternative budget

Posted April 06, 2017, at 12:27 p.m.
Last modified April 06, 2017, at 2:44 p.m.

AUGUSTA, Maine — Legislative Democrats quantified their opposition to Gov. Paul LePage’s state budget priorities Thursday with an alternative that would spend $265 million in new revenue on what the called “The Opportunity Agenda.”

Republicans dismissed it out of hand as a plan to increase spending.

Democratic leaders said their budget priorities include cutting property taxes and a range of investments in education and social services, as well as providing student debt relief. House Speaker Sara Gideon, D-Freeport, and other Democrats touted their “Opportunity Agenda” plan during a midday news conference at the State House.

“The problems we need to solve are bigger than this budget, bigger than the next two years and bigger than the current administration,” Gideon said. “It will take all of us working together to position us for the future we deserve.”

According to materials provided by Democrats, their proposal would lead to the largest property tax cut in Maine’s history. To do it, they support increasing the homestead exemption, which shields a portion of a property’s value from tax assessments, from $20,000 to $30,000; expanding the property tax fairness credit by $33 million statewide to more low- and middle-income homeowners and renters; increasing state revenue sharing with municipalities by $64 million; fully implementing the 3 percent surtax on income above $200,000, which was approved by voters in November 2016; adding $5 million to fight Maine’s opioid epidemic; and several other items.

LePage and Republicans are intent on eliminating the surtax, a message that was amplified by party leaders on Thursday, with Senate Majority Leader Garrett Mason of Lisbon Falls saying, “We will accept nothing less than a repeal.”

Senate President Mike Thibodeau, R-Winterport, called Democrats’ event a “therapy” session and Assistant House Minority Leader Ellie Espling, R-New Gloucester, said the focus should be on reform, not funding.

“We need to see some things changed instead of just throwing more money at problems,” she said.

On the revenue side, Democrats are eyeing $181 million over the next biennium that is expected from the improving economy, $13 million in expected tax revenues from the sale of recreational marijuana; and an estimated $70 million in new taxes on items Mainers purchase through Amazon and rentals via Airbnb.

This year’s budget negotiation comes at a time when revenues to state government are rising beyond expenditures. Despite that, Republicans and Democrats have been saying for weeks that state budget negotiations this year will be as difficult as they have been in recent memory.

“I think we have caucuses that are very far apart right now on this budget,” said House Minority Leader Ken Fredette, R-Newport. “People are going to have to become more reasonable in their positions.”

That mirrors the previous cantankerous negotiation in 2015. LePage vetoed the that budget package but the Legislature avoided a government shutdown — which would have taken effect on July 1 — by overriding the veto on June 30. That’s also the way it went in 2013, when the Legislature came back into session on June 26 to override a LePage veto.

Senate Minority Leader Troy Jackson, D-Allagash, said LePage’s budget proposal would benefit wealthy Mainers while pinching property tax payers and schools.

“The Opportunity Agenda puts Maine families first, giving them the tools they need to build the future they deserve,” he said.

A January poll paid for by a Thibodeau-helmed political action committee and given to reporters showed the test a new budget will face with the public: It showed that nearly four-fifths of voters thought the surtax referendum was aimed at raising education funding rather than hiking taxes, but nearly 60 percent of voters also thought the property tax is the most burdensome tax.

But Thibodeau declined to say how much Republicans want to raise education funding, saying only that it’s a goal.

Events like Thursday’s are becoming a regular aspect of budget negotiations in Augusta. Just a shade less than two years ago, Democrats unveiled their “Better Deal for Maine,” which eschewed LePage’s income tax cuts for high earners, kept lower sales and meals tax rates and increased municipal funding.

LePage’s January budget proposal includes variations on many of the proposals he included in his 2015 spending plan. This year’s proposes to bring Maine to a flat 5.75 income tax, while only broadening and not raising the sales tax, and making only a small corporate income tax cut.

Still, Democrats have stood firmly against many of the welfare changes he has proposed, including eliminating MaineCare eligibility for nondisabled parents who earn more than 40 percent of the federal poverty level and shortening the state’s five-year lifetime Temporary Assistance for Needy Families limit to three years.

A new budget must be in place by July 1 to avoid a state government shutdown, with the specter of a shutdown spurring late compromises among legislative leaders in each of the past two budget cycles.

LePage has argued that state government could continue to function if lawmakers pass short-term continuing resolutions, as Congress routinely does, but that tactic has never before been tried in Maine and some question whether it would conform with the Maine Constitution.

Bangor Daily News writer Michael Shepherd contributed to this report.

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