
Senate Minority Leader Trey Stewart, R-Presque Isle, is surrounded by fellow Republicans at a news conference in the State House Tuesday. Stewart said Republican lawmakers will oppose any state budget with tax increases. Randy Billings/Portland Press Herald
AUGUSTA —Republicans on Tuesday said they would not support any budget proposal that includes tax increases, setting up a showdown on state spending and practically daring Democrats to push through the majority budget without their support.
Standing behind a podium with a sign that declared, “1 new budget + 5 new taxes = 0 Republican votes,” Republican leaders in the House and Senate said their members unanimously oppose raising taxes for what they described as “reckless spending” by Democrats, who have controlled state government since 2019.
Senate Minority Leader Trey Stewart, R-Presque Isle, pinned blame on Democrats for a projected budget shortfall of $450 million over the next two years.
“The reality is the federal money has dried up; the economy started to take a turn; and the hens have come home to roost for all of these different initiatives they have pushed and pushed out and pushed out without responsible funding mechanisms,” Stewart said. “That results in a several hundred million dollar shortfall.”
Sen. Peggy Rotundo, a Lewiston Democrat who chairs the budget committee, pushed back against Republican characterizations of Democratic spending priorities.
“While we appreciate my Republican colleagues’ efforts to promote good governance, I would not characterize property tax relief, affordable health care, and funding for our education system as ‘reckless spending,'” Rotundo said in a written statement. “We’re looking at an $11.6 billion budget proposal, and it is far too early to draw lines in the sand.”
Gov. Janet Mills unveiled her two-year budget proposal last week, which will be reviewed and refined by lawmakers in the coming months.
The budget is $1.1 billion larger than the current two-year budget and maintains Mills’ commitment to provide 55% of public education funding and maintain the state MaineCare or Medicaid, program. It also maintains 5% revenue-sharing with municipalities, free school meals for students and free community college for two years.
To maintain those programs, Mills proposed tax increases on tobacco, cannabis, some pension income, streaming services (also proposed last year) and new taxes on private, nonmunicipal ambulance services and pharmacies to support MaineCare.
Mills’ proposal also contains program changes within the Department of Health and Human Services, including a proposal to save $132 million over the next two years by making MaineCare rate adjustments subject to available funding.
Mills spokesperson Scott Ogden said the governor has been urging fiscal restraint in recent years given that the spike in state revenues was temporary and fueled by the unprecedented federal response to the pandemic. He said Mills tried to save an additional $107 million in the previous budget to pay for future cost increases, but that was rejected by lawmakers, including some Republicans.
Mills also “successfully stopped a last-minute shadow budget sponsored by a Republican that would have added another $118 million in spending,” Ogden said. And she refused to accept a slate of additional spending bills sent to her on the last day of session, which is usually limited to dealing with vetoes.
“The governor has been telling the Legislature for nearly a year that difficult choices must be made and now those difficult choices are at our doorstep,” Ogden said, noting the governor did not increase income taxes and sought program changes and savings to initiatives that had not been fulling implemented yet.
House Minority Leader Billy Bob Faulkingham, R-Winter Harbor, said the increases would adversely affect rural Mainers and low-income residents, who are already struggling with inflation and high energy costs.
“Maine people are being asked to tighten their belts,” Faulkingham said. “These are basically poor taxes — taxes on poor people. And they’re being asked to pay for this out-of-control reckless spending.”
Faulkingham also said the administration is planning to “stiff the hospitals” because of a proposal to prevent increases in hospital reimbursement rates for MaineCare to keep up with inflation.
Republicans, who also criticized new positions in the budget, said Tuesday that their legislative priorities include reducing energy costs, property taxes, enacting welfare reform and cutting enrollment in MaineCare, but they did not offer any specifics.
Stewart said Republicans are considering a proposal to restructure property taxes, which are currently set by municipal officials to pay for services such as trash collection, police, fire and public education. He also said that Republicans will be looking to roll back welfare benefits.
“Republicans met offsite jointly yesterday and we have a number of initiatives in both of those policy areas we will be putting forward,” he said. “You’re going to see proposals to address MaineCare and the unaccountable nature of that program … making sure that what we have in Maine is a safety net and not a hammock.”
State budgets need two-thirds support in each chamber to take effect immediately, and state budgets have historically been approved late in the legislative session with bipartisan support so that they take effect at the start of the next fiscal year. On the other hand, a budget passed with a simple majority vote would take effect 90 days after adjournment.
In recent years, Democrats cited entrenched Republican opposition — and the prospect of a possible government shutdown — as justification to pass majority budgets early in the session to keep the government open. After passing the budget, they have adjourned and then come back for a special session to handle additional budget changes and continue their work on hundreds of bill proposals.
Republicans sued the state in 2023 over the budget maneuver, claiming it was unconstitutional. The Maine Law Court eventually sided with the state and dismissed the case last year.
Rep. Drew Gattine, the House chair of the budget committee, said in a written statement that it was too soon to say what course Democrats would take.
“I am not going to speculate on the outcome of our negotiations before they’ve even begun. Democrats are going into the budget process in good faith,” said Gattine, D-Westbrook. “We will closely examine the governor’s proposal as a committee, including the merits of the targeted revenues she has outlined, and produce a balanced budget that reflects the values and pressing needs of Maine people.”
Stewart acknowledged that the Republicans position on the tax increases could prompt Democrats to do the same thing this session.
“The ball is in their court, whether they’re going to pass a majority budget or not,” Stewart said. “There’s no need to raise taxes on the Maine people — across the board. And secondly, there are no Republican votes to do that. … We will not compromise on that point.”
Ogden challenged Republicans to engage with Democrats over the budget and to offer their own proposals.
“It is disappointing, but not surprising, that Republicans appear to not want to play a productive role in crafting the state budget,” Ogden said. “Year after year, Republicans criticize proposals put forward by the governor, but they offer no actual policy proposals of their own.
“Republicans should put forward real policy proposals, and they should outline — in concrete detail — what spending cuts they want to see or what state government positions they want to cut for all Maine people to see.”
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