AUGUSTA — Legislative leaders took the unusual step Tuesday of forming a special six-member conference committee in hopes of hammering out an agreement on the state’s next two-year budget, which so far has been locked in a political standoff, largely over a voter-passed law that increases taxes on those with Maine’s highest incomes.

House Speaker Sara Gideon, D-Freeport, and Senate President Mike Thibodeau, R-Winterport, each appointed themselves to the negotiating panel along with Sens. Cathy Breen, D-Falmouth, and Roger Katz, R-Augusta; and Reps. Tom Winsor, R-Norway, and Aaron Frey, D-Bangor.

State House Republicans and Republican Gov. Paul LePage have largely insisted on repealing the 3 percent surcharge on all household incomes over $200,000, saying it will lay to waste Maine’s economy and chase high earners from the state. But Democrats have said they want to honor the vote of the people and provide state funding to public schools at a level of 55 percent, a figure voters have now twice insisted on.

And while the opposing sides have traded some offers, there has remained a great distance, with Democrats insisting that $320 million in new revenue – the amount estimated to be collected from the surcharge over the next two years – be flowed toward public schools. Republicans have offered lesser amounts, including $30 million in new school funding from House Republicans and $100 million from Senate Republicans.

The conference committee includes the top State House leaders, an equal number of Democrats and Republicans, as well as four members of the budget-writing Appropriations Committee.

The committee is under a tight deadline. It needs to reach an agreement that can garner two-thirds support in the Legislature by late Thursday or early Friday. That would give legislative staff the time to actually assemble the budget document, which will likely be in excess of 600 pages and take at least 24 hours to produce. Both the House and Senate will then have to hold debates and votes on the new budget bill. Lawmakers need to enact a budget by June 30 or risk closing state government.

To do that, they need to send a final bill to LePage by June 19 in order to give him the required 10 days he has under the Maine Constitution to consider a bill, sign it, veto it or allow it to become law without his signature. The bill needs two-thirds support both to be enacted and to be able to survive a LePage veto.

LePage has said if the budget is larger than $7 billion and doesn’t eliminate the surcharge on high incomes, he will veto it. Republicans have also said they are unwilling to send more funding to public schools without first enacting reforms and changes to the state’s funding formula for public schools.

Complicating the process further are strict legislative rules that do not allow a conference committee bill to be amended without an additional committee of conference being formed. The six-member panel also cannot pass a bill on a simple majority vote. Sending a bill to the full Legislature will require the support of at least two members of the panel from the House and two from the Senate.

As the new budget committee of conference met for the first time late Tuesday to lay the ground rules for how it will operate and detail its schedule for the days ahead, both Gideon and Thibodeau warned that the stakes are high and compromise by all sides is going to be necessary.

“We are on the record of where we stand and will continue (to) fight for a budget that represents the opportunities Mainers demanded,” Gideon said in a prepared statement. “In order to continue to do our work, to serve the people of Maine, and to close a budget, we must move this process forward. We must continue our legacy of leadership and we must close this budget before June 30.”

Thibodeau said there were clear disagreements between the various factions, but his side would work in good faith.

The new committee set 9 a.m. Wednesday as its first working meeting.

Scott Thistle can be contacted at 791-6330 or at:

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