Update: Maine advances $500M+ state budget in the middle of the night

AUGUSTA — The Maine House of Representatives narrowly advanced on Wednesday evening the state’s supplemental budget — one that includes a new tax on millionaires and $300 checks to hundreds of thousands of residents.

The House voted 76-73 to pass the spending plan, which includes more than $500 million in spending for one-time and ongoing initiatives, and is the largest policy decision of the legislative session, which is scheduled to end next Wednesday. The House was continuing to debate a flurry of amendments Wednesday night after the initial vote, and the Senate still has to take up the proposal.

The proposal is likely to generate vigorous floor debate — and dozens of possible amendment attempts — ahead of a midterm election cycle in which voters will choose a new governor and decide the balance of power in the Legislature.

The debate will also color federal elections, since Gov. Janet Mills is running in the U.S. Senate primary.

Democrats are in the driver’s seat if they all show up and stick together as a caucus. They hold a governing trifecta, controlling the Blaine House and both legislative chambers — though they have a razor thin, three-seat margin in the House, not including three left-leaning independents.

Republicans and businesses groups, including the Maine State Chamber of Commerce, oppose the budget. The proposed millionaire’s tax and the use of the “rainy day fund” are the largest points of contention.

“This is hundreds of millions of dollars of new spending that was endorsed by legislative Democrats without a single Republican vote, and I don’t expect that it will get a single Republican vote,” said Senate Minority Leader Trey Stewart, R-Presque Isle.

Lawmakers had until 8 a.m. Wednesday to submit amendments. A Democratic spokesperson said about three dozen amendments were offered, though it’s unclear how many of those proposals will be drafted and debated on the floor.

The budget includes a $227 million net increase in General Fund spending in the fiscal year beginning July 1.

But it also taps the state’s budget stabilization, or rainy day, fund to the largest extent of Mills’ tenure to fund the checks and other one-time initiatives, including paying public defenders and funding housing programs, education and school safety initiatives, and highway projects.

Lawmakers propose drawing down $292 million of the roughly $1 billion in the state’s rainy day fund. More than half, $155.2 million, would be spent on Mills’ checks.

If approved, the $300 “affordability checks” would be sent to more than 500,000 Mainers — a reduction of about 250,000 people from the governor’s original proposal.

The budget would boost annual revenue by adopting a 2% surtax on incomes over $1 million for single filers and $1.5 million for heads of households and joint filers. That’s projected to increase revenue by $91.1 million in the current fiscal year and $70 million next year.

Mills announced last week that she would support the millionaire’s tax — a reversal of her previous position.

But she also reportedly told state lawmakers that she would not support any budget that did not include her affordability checks, which critics call an election-year ploy as she seeks the Democratic nomination for U.S. Senate.

Mills is currently trailing in primary polls against political newcomer Graham Platner, who supports the millionaire’s tax.

The budget proposal would make Mills’ free community college program permanent, increase the minimum salary for teachers and provide $11.4 million in additional funding to expand current property tax relief programs.

It also includes $11 million in one-time funding for an eviction relief program.

The legislature’s budget-writing committee advanced its proposal along party lines last week.

Stewart and House Minority Leader Billy Bob Faulkingham, R-Winter Harbor, also decried the process by which the budget proposal was released. They said they received the proposal Tuesday night with barely any time to prepare amendments by Wednesday morning.

“So we’re left with very little opportunity to offer competing thoughts or ideas,” Stewart said.

Republicans have called for conformity with federal efforts for tax deductions on overtime and tips, and also want to see “transparency and accountability in our Medicaid system.”

Both are likely to appear in any proposed amendments Republicans bring to the budget proposal, Stewart said.

Staff Writer Rachel Ohm contributed to this story.