AUGUSTA, Maine — Gov. Paul LePage is set to release his fourth and final two-year budget proposal on Friday, giving him one last chance to reshape Maine government before his tenure ends in early 2019.
A new biennial budget will have to be in place by July 1, and it will guide state spending through June 2019, when Maine will have a new governor.
Representatives for LePage and his finance department didn’t respond to questions about the budget, but the Republican governor has dropped hints in radio interviews and public appearances during the past few months, giving us a rough idea of what to expect come Friday.
Whatever he proposes is just a starting point, and Maine’s last two budgets — after being drastically altered by the Legislature’s budget committee — passed over LePage vetoes in a time of divided government in Augusta that will continue in 2017, with Republicans and Democrats holding narrow majorities in the Senate and House, respectively.
LePage’s upcoming spending plan is likely to be a variation on the themes that have marked his six years in the Blaine House, chiefly lower taxes and smaller government. Many unanswered questions remain, and the Republican governor said Thursday that he’s still not certain what shape his proposed budget would take.
“I’m very, very concerned about what the budget’s going to look like,” he told WGAN. “I have no idea at this point, and it’s due, what, the 6th of January?”
The governor has said he’ll continue his crusade to lower Maine’s income tax without increasing the sales tax, hinting at “major cuts.”
LePage told Lewiston-area business leaders in October that he’ll propose a budget that cuts Maine’s income tax — which now has a top rate of 7.95 percent — to 4 percent. In part, that change is designed to offset a 3 percent surcharge on income over $200,000 passed by Maine voters in November.
That rate would be lower than those he proposed in an ambitious budget document in 2015. But that proposal would have increased sales taxes and broadened the sales tax base to compensate for the lower income tax rate. Many legislative Republicans opposed the sales tax changes and worked with Democrats to craft a compromise budget over the governor’s veto.
LePage has ruled out raising sales taxes this time because of past opposition. In a December interview with WVOM, he said without new sales tax revenue, “major cuts” are necessary to meet the statutory obligation to balance the budget.
A leaked memo indicated that LePage wanted deep cuts to the state workforce. While he recently said he wants to shrink government, he also said he wants a flat budget.
One possible avenue for a major cut came in July, when the Portland Press Herald published a leaked memo from LePage’s deputy chief of staff that said he wanted to cut the state’s workforce by 2,300 people — or more than 19 percent.
LePage disputed media reports on that issue, but nothing he said contradicted their accuracy, although the administration later signaled that cuts wouldn’t be wholesale.
Adrienne Bennett, the governor’s spokeswoman, said that LePage would be “assessing and evaluating the value” of 2,400 limited-period state employee positions — those with an effective end date often because they’re federally funded.
But there have been mixed messages, with LePage telling WGAN on Thursday he was working that day to finalize spending cuts and said “we’re going to shrink government best I can.”
The governor also took a swipe at some branches of state government, saying he wants to submit a flat total budget but “it’s like talking to a wall” with “absolutely unreasonable” demands from some agencies. LePage noted two specific requests from the University of Maine System and his own Maine Office of Information Technology.
The university system requested a 12 percent funding increase in October, and the governor said the IT office wants “like a $50 million” increase. A office spokesman didn’t respond to a question about that, but the office’s current annual budget is less than $57 million.
Even if the state workforce isn’t cut in a major way, programs could be. For example, LePage may have an easier time making cuts to state welfare programs with Republican President-elect Donald Trump set to take office on Jan. 20.
For context, the compromise budget that lawmakers passed over LePage’s objections in 2015 set state spending at about $6.7 billion.
LePage also has said that he won’t include money to implement marijuana legalization and fund school superintendents.
The governor also will use his budget proposal to further a host of smaller policy goals, which will likely punt funding for the new recreational marijuana program approved by Maine voters in November and K-12 superintendents to the Legislature.
LePage said in December that he won’t include money for his administration to oversee the marijuana market, which was projected at $2.5 million in 2018 by the Legislature’s fiscal office. Saying he would need at least $3 million to create a retail sales oversight infrastructure for recreational marijuana, LePage said that he’ll “let the Legislature deal with” a funding mechanism for legalization.
In October, LePage said that he won’t include money for school superintendents. He has often complained that Maine has too many and that more money should be spent in classrooms.
However, there isn’t a vast amount to be saved here. Out of the nearly $2.3 billion spent on Maine schools in the 2014-15 school year, under 3 percent — or less than $67 million — was spent on system administration.
Administrators and municipalities also will criticize it as a cost shift to cities and towns. That’s nothing new. LePage proposed suspending state aid to cities and towns in 2013 and again in 2015. The Legislature restored it, but only after a slog that put the issue under the spotlight.
By most accounts, the state’s revenue situation is better now than it was when LePage unveiled his previous three budget proposals. But after voters in November passed the income tax surtax and raised the minimum wage, he has argued that those citizen initiatives will cause grave harm to Maine’s economy and that the next state budget must include measures that counteract what he perceives to be the widespread negative repercussions those votes will have.
In addition to framing Maine’s policy dialogue between now and June, the budget document LePage releases Friday will add a key new chapter to what will become his legacy.