Budget compromise emerges in Maine Senate after GOP member wins veterans funding
AUGUSTA, Maine – A potential compromise emerged on Wednesday over a short-term budget plan to commit spending cuts and remove taxes on federal business aid when Democrats won two Republicans after adding money for veterans services.
The Maine legislature appeared to be deadlocked at the start of the day after the proposal failed to win the two-thirds of the votes needed for passage to the House of Representatives on Wednesday in their first round of voting in 2021 at the Augusta Civic Center. There was urgency for an agreement with the taxes due in five days for some companies and the April 15 tax deadline is looming.
In the evening, Democrats agreed to add $ 113,000 in staffing and funding positions to the Maine Bureau of Veterans’ Services, a change championed by Sen. Brad Farrin, R-Norridgewock. Only he and Sen. Rick Bennett, R-Oxford, broke ranks in support of the budget, giving him more than two-thirds of the vote in the Democratic-led Senate.
Farrin, a Maine Air National Guard veteran during the Iraq war, said he was determined to make the issue his “line in the sand” after a homeless services coordinator was to be removed . The budget still needs a two-thirds vote in the House to finally pass.
“It will be quite difficult for policy makers to ignore [the issue] now, ”he said.
A relatively small cash reserve paved the way for the deal. Minority Republicans declined last week to back a short-term budget proposal because they remained separated from 32 million dollars Democrats on a deal, pushing for further tax cuts that comply with federal law while pushing for a measure subjecting Gov. Janet Mills’ power to spend federal coronavirus aid to legislative votes.
The parties must effectively reach a deal by Thursday, the second of two scheduled voting days. Failure to do so would risk jeopardizing the entire program, including a bipartisan agreement to completely remove state taxes on federal paycheck protection program loans after commercial interest. pushed back a Mills plan submit the proceeds of the virus assistance program to state taxes. The parties also agreed to waive state taxes on enhanced unemployment benefits up to $ 10,200.
Republicans have mostly focused on getting federal tax relief on foreign-source income that Maine Revenue Services says affects perhaps 10 businesses here at a cost of $ 8.4 million.
Democrats seemed taken aback by this impasse. Senator Bill Diamond, D-Windham, said the tax break was obscure and not worth delaying the package. Bennett, the other Republican defector, was not convinced they would benefit any substantial number of Mainers.
“Now is the time to pass the supplement and provide assistance to all businesses and families across the state,” said Representative Teresa Pierce, D-Falmouth, co-chair of the Legislative Budget committee, in a statement. speech delivered Wednesday morning.
The majority of Republicans insisted that full tax compliance had always been their goal and was crucial in helping businesses recover from the coronavirus pandemic. They were not appeased after Farrin announced his deal, although Republican leaders backed the money.
“It’s important that we take care of all the businesses in the state of Maine,” said Senate Minority Leader Jeff Timberlake, R-Turner, “and $ 8.4 million may not seem like a big deal. tax hike for a lot of you, but it’s a big tax hike for me.
The tax compliance argument has been at the forefront of supplementary budget discussions since Mills introduced it in January, with the paycheck protection program problem angering Republicans and businesses. Its original proposal strayed from full compliance, citing its cost of $ 100 million. She then offered a tax rebate on the first million dollars in loans.
The supplementary estimates would reduce spending this year by $ 258 million in an effort to reduce an expected shortfall of $ 650 million over three years. The situation is fluid after Congress passes a $ 1.9 trillion relief plan that will send $ 1.6 billion in state and local aid to Maine.
The Democratic governor said on Wednesday that she would submit a change package to his budget proposal of $ 8.4 billion over two years after the vote. Lawmakers must resolve this issue by the end of spring, and their problems with the short-term budget could portend tough negotiations ahead.