Inside Augusta

Lawmakers convening Wednesday to debate supplemental budget, state of emergency

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Maine lawmakers will convene in-person in Augusta this week for the first time since December 2, when legislators met at the Augusta Civic Center to be sworn in as members of the 130th Maine Legislature. Before that, the last time Maine lawmakers convened in person was on March 17, 2020 at the start of the coronavirus pandemic.

The most pressing item on the agenda is LD 220, the governor’s supplemental budget proposal. The pandemic resulted in less revenue than the state originally anticipated receiving, forcing it to revise its original spending plans on the fly before the end of the current fiscal year.

The supplemental budget was reported out of the Appropriations and Financial Affairs Committee last week on an 8-5 party line vote. Republicans and Democrats on the committee agreed to fully forgive state taxes on federal pandemic loans to small businesses, but Republicans also seek input on how the state would spend any future pandemic aid it receives from the federal government.

Earlier this session, the Mills administration released its supplemental budget proposal that originally called for Maine businesses to pay state taxes on federal Paycheck Protection Program loans. Outcry from Maine’s business community led the governor to change that plan in favor of a partial tax conformity compromise package, where 99% of Maine businesses would escape paying state taxes on the federal assistance.

The governor’s compromise plan didn’t satisfy Republicans, however, who noted it would leave out over 251 Maine businesses that employ more than 40,000 workers, or nearly one-fifth of PPP affected employees. The caucus used its leverage in budget negotiations to ensure no business pays state taxes on federal relief loans and is now trying to prevent decoupling from the federal tax code in other areas, as well as the governor or majority Democrats from spending future pandemic aid without their input.

Two-thirds of the legislature must vote in favor of the supplemental budget on Wednesday for it to be enacted as emergency legislation, which would require the support of at least a handful of Republicans.

Another item of interest on the docket this week is HP 596, a joint resolution sponsored by Rep. Peter Lyford that would end Governor Janet Mills’ declared state of emergency. The state of emergency was first declared on March 15, 2020, and has been renewed 11 times since.  

Ending the emergency declaration would ultimately result in the termination of the governor’s emergency powers 30 days thereafter, turning the state’s virus response over to the Maine Legislature. This would give Maine people a voice in their government again.

After ending the emergency, lawmakers could create a new emergency classification in state statute related to public health emergencies, allowing Maine to continue receiving federal assistance without having the governor unilaterally control the pandemic response.

Republicans in the legislature are sure to support the resolution, but it’s unknown if or how many Democrats will vote to strip the governor of her emergency powers. Legislative Democrats were vocal about a lack of input in the state’s virus response last spring, but have shied away from confronting the governor on the issue since that time.

Click here to contact lawmakers in support of full tax conformity.

Click here to contact lawmakers in support of ending the state of emergency.

About Jacob Posik

Jacob Posik, of Turner, is the director of communications at Maine Policy Institute and the editor of The Maine Wire. He formerly served as a policy analyst at Maine Policy. Posik can be reached at jposik@mainepolicy.org.

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