House Republican leader Kathleen Dillingham, R-Oxford, speaks out against a Democratic state budget plan at a news conference Wednesday on the plaza between the Cross State Office Building and the State House. Joe Phelan/Kennebec Journal Buy this Photo

AUGUSTA — Minority Republicans are objecting ferociously to a new $8.3 billion two-year state budget that Democratic majorities and Gov. Janet Mills appear poised to pass with or without Republican support.

“It’s a sham,” House Minority Leader Kathleen Dillingham, R-Oxford, told reporters during a news conference Wednesday. “We don’t know how much more spending is going to be added onto this.”

Democratic leaders said their “back to basics” proposal is based on the budget the Legislature approved with bipartisan support in 2019. They said they want a new budget by the end of the fiscal year to avoid any risk of a state government shutdown as Maine heads into its busy tourist season.

Without a balanced budget adopted by June 30, non-essential state government functions would shut down, including state parks, which are among Maine’s key tourist attractions.

Democrats said they are willing to talk with Republicans but indicated they would move forward without their support, if necessary, to get a new budget in place well before June 30.

“What we have seen far too long here is cliffhangers every June and at the end of our session and we don’t need cliffhangers anymore,” said Sen. Cathy Breen, D-Falmouth, co-chair of the budget-writing Appropriations and Financial Affairs Committee.

She said businesses and taxpayers all over Maine just endured another cliffhanger when Republicans demanded tax code changes and refused to back  a supplemental budget earlier this month that provides more than $100 million in tax cuts to Maine businesses that received federal Payroll Protection Program loans last year.

To pass a budget without Republican support, the Legislature will have to approve it before the end of the day on March 31. That would provide the 90 days required by the state Constitution for the bill to become law before June 30, without an emergency preamble, which requires two-thirds approval in the House and Senate. With an emergency preamble, a bill can become law as soon as the governor signs it.

Having the budget set before June would also inform local school committees of how much state aid they can expect in the coming year as they craft their own budgets – which are usually put to local voters in June, said Rep. Teresa Pierce, D-Falmouth, House chair of the appropriations committee.

“They have done a herculean effort to keep our kids in some sort of functioning environment, whether it was a hybrid or part-time or working remotely,” Pierce said. “It has been just unbelievable and I think giving them some security around this has been one of our biggest, biggest priorities and what we absolutely need to do.”

But House Minority Leader Dillingham and others said they’ve been handed a one-page budget breakdown that provides little detail on the spending plan or how Democrats plan to allocate $1 billion in new federal pandemic aid.

She said Republicans have regularly joined with Democrats, if at times reluctantly, to pass budgets that have garnered broad bipartisan support in recent years. Dillingham said she feels passionately about the deliberative process in the Legislature and that Democrats are now risking that unity.

Senate Minority Leader Jeff Timberlake, R-Turner, said the budget proposal is incomplete and he wasn’t sure whether it even included several pandemic-response initiatives Mills wanted.

Timberlake said the budget also appears to omit a key provision Republicans were asking for, a $10,200 tax credit for all income tax filers that would mirror relief given on unemployment benefits in a recent supplemental budget passed by the Legislature earlier this month. That measure also included $100 million of income tax relief to Maine businesses that received federal Payroll Protection Program loans.

Timberlake said the proposed budget also appears to include a proposed tax increase – a 6 percent sales tax on online streaming services, which would raise about $10 million over the next two fiscal years. The tax was originally proposed by former Republican Gov. Paul LePage’s administration but not enacted.

“With all the projected revenues coming into the state the last thing we need is a tax increase,” he said. And he noted that the Legislature has passed a majority-only biennial budget just twice in the past 70 years.

“Why?” he asked. “Because it’s not the right thing to do. The whole system was designed so everyone has a seat at the table in order to collaborate, deliberate and negotiate. That is not happening.”

A majority-only budget could sour Republicans on providing the votes needed to advance several bonding bills –  state borrowing packages. While bonding packages also go to a statewide vote, they first need two-thirds support in the Legislature. The bills would provide hundreds of millions of dollars for infrastructure improvements, including an expansion of broadband service statewide, highway and bridge repairs and construction, and matching funds for several local projects such as a new Portland convention center, developments along the city’s working waterfront and a new homeless shelter.

But with more than $1 billion of additional federal pandemic relief heading to Maine in the weeks ahead, it may be unnecessary to borrow for those kinds of projects.

Once the U.S. Treasury finalizes how the aid can be used, lawmakers and Mills will be in a better position to understand how it might offset state budget spending, Mills said in a letter to the Legislature’s presiding officers Monday.

House Speaker Ryan Fecteau, D-Biddeford, said Democrats are open to discussing specific items that Republicans have concerns about and are not closing the door on budget talks.

“Let’s have that conversation and let’s get this done together,” Fecteau said. “We remain ready to work with them to deliver a back-to-basics budget that funds state government and provides stability and predictability to Maine people without having consequences for the economy and our recovery from this pandemic later on down the road when the consequences are just to great to bear.”

The appropriations committee is expected to start taking votes on the budget proposal during a work session Thursday and leaders have indicated they intend to have the full Legislature vote on the budget when it convenes Tuesday at the Augusta Civic Center.

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