AUGUSTA – Legislative budget negotiators continued to chip away at Gov. Paul LePage’s sweeping tax overhaul on Tuesday, quietly rejecting the governor’s income tax reductions and his proposed changes to the state’s General Assistance program.
Members of the Appropriations and Financial Affairs Committee took non-binding votes on several key budget issues as they attempted to finalize a deal on a two-year, $6.57 billion state spending plan. While they rejected LePage’s income tax cuts – a major tenet of the Republican governor’s budget and his re-election campaign last fall – lawmakers endorsed a plan to more than double the estate tax exemption in a compromise between the Democratic and Republicans positions.
Committee members planned to resume work on Wednesday, even as tensions remain high between House and Senate Republicans over a tentative compromise brokered over the weekend. The committee has already missed a self-imposed Monday deadline for finishing work on the budget that was intended to give the full Legislature time enough to vote on it and then respond to an anticipated LePage veto.
The committee’s votes are unofficial until work on the budget is complete, although most positions are not expected to change.
In arguably the most consequential vote to the ongoing budget debate, the committee voted 9-4 to reject LePage’s plan to lower Maine’s income tax and corporate tax rates. As expected under the framework of the budget compromise negotiated Sunday, all seven Democratic members of the committee and the two Senate Republicans voted to reject the income tax cuts while the four House Republicans supported them.
There was no public discussion of the tax rates prior to the vote.
In a compromise on the estate tax, the committee voted 11-2 to increase the exemption on the so-called “death tax,” or inheritance tax, from $2 million to $5.5 million after January 1, 2016. LePage’s proposed budget contained an identical increase but would eliminate the estate tax altogether in 2017. The budget plan presented by the Legislature’s Democratic leadership had recommended no changes to the estate tax.
The committee also took several divided votes on the General Assistance welfare program, which provides vouchers to families or individuals in need of emergency assistance for housing, heating, medicine or other basic necessities. The program is jointly funded by the state and municipalities.
Building on earlier votes on General Assistance, the committee voted to reject LePage’s budget language that would have eliminated assistance for legal non-citizens, a group that includes Maine’s growing population of asylum-seeking immigrants. The vote was 9-4, with the committee’s four House Republicans voting to retain LePage’s proposal.
Meanwhile, top legislative Republicans continued to spar Tuesday over a tentative compromise negotiated between the Senate Republican leadership and the Legislature’s Democratic leadership. House Republican leaders have vowed to fight the compromise if it makes it to the House floor because it does not contain the income tax cuts or welfare reforms originally proposed by LePage.
House Minority Leader Rep. Kenneth Fredette, R-Newport, met with House Speaker Mark Eves, D-North Berwick, on Tuesday to discuss the potential stalemate, which could force a government shutdown if the Legislature is unable to pass a budget by June 30. When asked if any progress was made, Fredette simply replied that the discussions were more “conversations” than negotiations.
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