Maine Gov. Janet Mills used her annual State of the Budget speech Tuesday night to call on lawmakers from both parties to resist the urge to score political points during what promises to be difficult and contentious budget negotiations, and instead work together to find ways to compromise.

Mills also announced during the annual prime-time address her opposition to a citizen referendum to adopt a red flag law, which would allow family members to directly petition a court to remove access to firearms when someone is in crisis.

And she issued a challenge to the Maine Commission on Public Defense Services to ease rules and requirements to bolster its ranks of attorneys, rather than simply asking for more money.

Protesters encouraged to attend the speech by Rep. Laurel Libby, R-Auburn, shouted out their opposition to Mills’ proposals as she entered the State House chamber to give her speech, which began 20 minutes late.

Mills also touched on the flurry of executive orders issued since President Donald Trump returned to office just over a week ago, including a directive issued Tuesday to freeze federal grants and funding that drew criticism from the governor and entire Maine congressional delegation. She repeated her vow to work with Trump when Maine benefits and to resist when it doesn’t.

“Time will tell what paths the president and the new Congress choose,” Mills said during the address. “No matter what, I ask this Legislature to join me in putting the people of Maine first.”

The annual speech, which is called a State of the State Address in off-budget years, lasted more than one hour and included appeals for the Legislature to support the governor’s budget priorities, including free community college tuition and continued state support for public education.

Mills unveiled her budget proposals this month. Republicans immediately panned her proposals, which increase state revenues, saying at a news conference that they would not support any budget that increases taxes. And the spending plan has drawn criticism from some progressive advocates and a muted response from her own party, with Democratic leaders saying they plan to carefully review her proposal.

Mills acknowledged concerns from both parties but urged lawmakers to keep an open mind and seek compromises that would “put Mainers first.”

“When I introduced my budget two weeks ago, I could hear the collective groans of both Democrats and Republicans echoing in the chambers upstairs,” Mills said. “Even Old Orchard Beach isn’t big enough for all the lines in the sand some of you have already drawn.”

NO MOOD FOR COMPROMISE

Republicans, however, were in no mood to compromise. In a response recorded before Mills delivered her address, Senate and House Republican leaders placed the current budget challenges solely on Democrats, who have controlled state government since 2019, and used fiery rhetoric to reiterate their opposition to tax increases.

Senate Minority Leader Trey Stewart, R-Presque Isle, called out Mills for going back on her 2022 reelection campaign promise not to raise taxes. He said Democrats are “hell-bent” on convincing Mainers they’re firefighters, when they’re actually “arsonists.”

“Let me be crystal clear — this budget is the worst in decades. The governor has lied to us all in her promises not to raise taxes on Maine people,” Stewart said. “And let me be clear about one more thing: This budget has zero Republican votes.”

Stewart called the tax increases “an insult” to Mainers and blamed the budget challenges on the state’s welfare programs. He said welfare, which is supposed to be a safety net, has instead become “a hammock for the lazy to hang out in without limit.”

“While the budget gap was created by Democrats, we’re happy to help them fix it,” said Stewart, who didn’t offer any specific proposals, other than ending subsidies for solar farms and alluding to possible efforts to address property taxes. “We can and must do better.”

Mills proposed a $11.6 billion budget — a $1.1 billion increase over the current two-year budget. It includes tax increases and program cuts to close a structural gap of $450 million, as historically large increases in state revenue driven by pandemic assistance have worked their way through the economy and the costs of new programs and services increase.

Lawmakers will begin holding public hearings and consider changes to the budget proposal beginning Monday.

GENERATING REVENUE

To generate revenue, Mills has proposed reducing or eliminating tax breaks for wealthier retirees and increasing or creating new taxes, including increasing the cigarette tax by a $1 a pack to $3 a pack; increasing the adult use cannabis sales tax by 40% to 14%; making streaming services such as Netflix, Spotify and Zoom subject to state sales tax; and taxing private ambulance services and imposing a 70-cent tax on prescriptions to generate more federal revenue.

House Minority Leader Billy Bob Faulkingham, R-Winter Harbor, said Mills’ budget shows she wants to “tax all things and all people all the time.”

“How much pain can they inflict on you – the Maine people – before you say enough is enough?” Faulkingham said.

While Maine Republicans “huff and puff” about increases in the state’s cigarette tax disproportionately affecting low income residents, Mills said Republicans in Nebraska have also promised an increase to deal with their budget challenges. She issued a challenge to Republicans, who have signaled they want to reduce the number of people on Medicaid.

“I understand your concern about the impact on low-income people and that, really, you would like to make it as cheap as possible for people to smoke,” Mills said. “If that is the case, I would simply ask in return that you not also try to cut the very health care services these same folks are going to need due to smoking. Because that is what you are doing when you look at cutting Medicaid.”

To scale back costs, Mills proposed freezing cost-of-living increases for direct care workers, reducing Medicaid reimbursements to larger hospitals, ending food assistance to noncitizens who have work permits but are unemployed, and reducing state subsidies for child care providers. She has also targeted new programs that have not be fully implemented.

Mills said the adjustments are needed to protect bipartisan and voter-approved investments made since she took office. Those include voter-approved directives to expand the state’s Medicaid program, known as MaineCare, and to provide 55% of public school funding. Other existing initiatives in need of additional funding include free meals for students, providing 5% revenue sharing with municipalities and two years of free community college.

Mills pushed back against Republican characterizations that Maine’s budget situation was caused by “reckless spending.” She said many states are confronting budget challenges, including the Republican-led states, such as Iowa, which enacted tax cuts — something Maine Republicans have also sought.

“My point is that budget constraints are not unique to blue states or to red states this year,” Mills said before pivoting to defend to spending priorities. “This is not reckless spending, as I have heard some say. Rather, if we did not do these things, hospitals would incur more uncompensated care, property taxes would only go up, and tuition to higher eds would certainly rise.”

Mills also touched on the state’s beleaguered indigent legal defense services. While advocates want more funding, Mills said her administration has quadrupled funding for what is now the Maine Commission on Public Defense Services from $11 million to $44 million — a level that’s set to increase to more than $50 million next year.

Despite those investments, more people than ever are going without legal services, said Mills, who blamed “arbitrary caseloads,” restrictions, rules and rostering requirements established by the commission. She also said the commission has resisted help from the judiciary to find attorneys for clients who cannot afford legal representation.

Mills said the commission must make changes before receiving any additional funding.

“The current system has become a disastrous example of the perfect becoming the enemy of the good,” Mills said. “Just a few years ago we had all the lawyers we needed, but not enough accountability. Now we have a system that is so focused on rules that it has driven away the lawyers. The commission wants tens of millions of dollars more in the budget. But first, the commission must change.”

RED FLAG LAW

Mills also came out against the citizen referendum to enact a red flag law in Maine, the signatures for which are being reviewed by the secretary of state’s office. Her opposition is not a surprise, since she worked with gun safety groups and gun owners to craft Maine’s  yellow flag law, which can only be initiated by police and requires a mental health review before removing someone’s access to firearms.

Mills noted that a commission she appointed to investigate the 2023 mass shooting in Lewiston concluded that Maine’s existing law could have been used to prevent the shooter from accessing his firearms, but it wasn’t. Lawmakers strengthened the program last session.

Mills plans to say the referendum would “directly undermine” the existing law, which she said is connecting people in crisis to mental health services. She said it’s government’s job, not that of a private citizen, to protect people from gun violence.

“I stand by our current law,” Mills said. “It was passed with the near unanimous support of the Legislature. It is working. It is saving lives every day.”

That line, plus a shoutout to Duke basketball star Cooper Flagg of Newport, was one of the few lines to draw bipartisan applause.

Although Republicans threw rhetorical darts across the aisle, House Democrats said they stood ready to work with Republicans and Mills to craft a bipartisan budget.

“In her address tonight, Gov. Mills talked about putting the people of Maine first,” House Speaker Ryan Fecteau, D-Biddeford, said in a written statement. “I believe she is steadfast in her commitment to making progress for Maine families while maintaining fiscal responsibility.

“To address the challenges we face — the cost and availability of housing and child care, rising property taxes, and access to health care — Democrats are ready to work with our Republican colleagues and Gov. Mills to produce a budget that makes a real difference for Maine people and keeps our state moving forward.”

Senate President Mattie Daughtry, D-Brunswick, vowed to “fight for programs that are vital to Mainers’ daily lives, including fully funding our schools, property tax relief and reliable child care.”

“In tonight’s address, Gov. Mills made her case for her administration’s two-year budget proposal,” Daughtry said. “Now it’s the Legislature’s turn.”

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