AUGUSTA — Republican leaders said Monday that they support much of the $6.8 billion budget offered by Gov. Paul LePage last week, but Democrats said they are largely opposed to the spending plan.

Top legislative leaders and members of the Legislature’s budget-writing Appropriations Committee met Monday behind closed doors with top LePage administration officials to review his final two-year state budget proposal.

LePage Finance Commissioner Richard Rosen and his top tax official, Mike Allen, the associated commissioner for tax policy, met first with Republican House and Senate leaders as well as Republican members of the Appropriations Committee before briefing Democrats in two other private meetings.

The governor’s budget would reduce the state’s top income tax rate this year and institute a 5.75 percent flat tax on income by 2020. His plan would make up the difference through spending cuts, including the elimination of 500 state jobs, and broadening the sales tax to cover more goods and services. LePage’s plan would also overhaul the state’s school-funding system and institute significant welfare reforms.

Republicans said they favor the proposal to cut income tax rates, but whether they would support broadening the state sales tax is unclear. Republicans are also likely to support many of the spending cuts proposed by the governor, a party leader said Monday.

Democrats were unhappy with much of the LePage plan, including efforts to undermine the new tax surcharge for education funding, reducing revenue sharing between the state and municipal governments, overhauling the state’s school aid system and eliminating the state’s share of General Assistance funding.

Senate President Mike Thibodeau, R-Winterport, said there was little doubt the Legislature would make changes to the budget.

But he said his caucus agrees with reducing the state’s top income tax rate from 10.15 percent to 7.15 percent to counter a 3 percent tax surcharge on incomes of $200,000 or more to increase public school funding, which was approved by voters in November.

“We cannot leave in place a 3 percent penalty on Maine’s small businesses,” Thibodeau said. He acknowledged that the Legislature is obligated to follow the will of the voters, which Republicans interpret to mean more funding for public education, but not necessarily from the state’s highest income earners.

Senate Majority Leader Garrett Mason, R-Lisbon, said Republicans agree with LePage’s ongoing effort to lower the state’s income tax rates but wasn’t sure whether they would support offsetting the revenue loss by expanding the sales tax, a version of which has been rejected before.

Mason said LePage’s plan to eliminate about 500 state jobs – about half those positions are currently unfilled – is also something Republicans are likely to support.

“Republicans are all about smaller government and less taxes and I think it accomplishes that,” Mason said. Mason called the 3 percent surcharge for education, “a travesty. So I was glad to see that go away,” he said.

Democratic leaders stopped short of calling parts of LePage’s proposal non-starters but they did indicate they would use their majority in the House to rebuff much of LePage’s fiscal package and likely many of his policy reforms.

“There are things lacking in it that I am very disappointed in,” said House Speaker Sara Gideon, D-Freeport. Gideon said LePage’s budget doesn’t invest in Maine people but instead is a renewed attempt to advance some LePage policy initiatives that lawmakers in both parties have rejected before.

Democrats, who hold 17 of Maine’s 35 state Senate seats, will likely have help from moderate Republicans in opposing key parts of LePage’s budget.

Senate Minority Leader Troy Jackson, D-Allagash, said his caucus is not interested expanding the sales tax if the goal is simply to provide another income tax cut for Maine’s wealthiest earners.

But Jackson and other party leaders said Democrats are unlikely to support the job-cuts proposal. Jackson said his constituents face long wait times for help filing unemployment claims and accessing other state services or benefits they’re entitled to.

“So, no, I don’t know that it’s a good idea to simply eliminated all of these unfilled positions,” Jackson said.

Sen. Ben Chipman, D-Portland, said eliminating the state’s portion of General Assistance funding would be another hit to property taxpayers in his city, which takes care of large population of homeless people from outside of the city. Chipman said Maine’s other large cities, Lewiston and Bangor, would be in a similar predicament.

Gideon and Sen. Cathy Breen, D-Falmouth, also noted that LePage’s latest budget proposal does nothing to help alleviate the state’s growing opioid abuse crisis and suggested Democrats would bring forward legislation to do so.

“We see no new investment in fighting the opioid crisis,” Gideon said. “In fact, we see $1 million that we appropriated last year, gone.”

Breen, the ranking Senate Democrat on the Appropriations Committee, said LePage’s attempt to further reduce state spending on Medicaid, the state and federally funding health insurance program for the poor, by removing thousands of younger “able-bodied” adults from the rolls would exacerbate the state’s drug problem.

“Especially 19 to 20-year-olds, that’s a prime age for people struggling with addiction and we are not going to stem that tide with this budget,” Breen said.

Democrats are also unlikely to accept a wholesale rewriting of the state’s public education formula, said Sen. Nate Libby, D-Lewiston, assistant minority leader.

“That’s a major shift in policy” that his constituents would be unlikely to support, Libby said. LePage’s budget would eliminate state funding for school administration costs and instead push local communities to either consolidate public school administration or pay for it out of local budgets. It could amount to a $140 million increase in local property taxes statewide, Libby said.

Libby, Jackson and other Democrats said they fear LePage’s budget would push even more of the cost of government onto taxpayers.

When pressed about starting the budget talks behind closed doors, Gideon said Democrats want a more transparent budget process but LePage would have to make executive branch officials available for budget hearings, which will start in the next few weeks and likely continue into June.

She said Monday’s meeting with administration officials was cordial but not necessarily productive.

“To be honest with you we didn’t get any more information than was printed on a piece of paper,” Gideon said.

Those concerned about a transparent process as the Legislature and LePage work out how to spend an estimated $6.8 billion of taxpayer funds will have a chance to hear plenty, Thibodeau said.

“There’s going to be hundreds and hundreds of hours of testimony, of research, of understanding,” he said.

 

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