On Jan. 1, working people across the state of Maine started paying their share of a new one percent tax on paychecks created by Democratic lawmakers to fund a new paid leave program.
But unbeknownst to many private sector workers, non-government employees will also be shouldering the new tax burden for state government employees, who are not required pay the 0.5 percent employee contribution for the tax.
In other words, state workers are won’t see the tax withheld from their paychecks, but they’ll still get to benefit from 12-weeks of paid leave when the program becomes active in May 2026 because non-government workers and private sector businesses will be paying their way.
Maine State Chamber of Commerce (MSCC) government relations specialist Jacob Lachance said Wednesday that the amount of money Maine’s private sector would be forking over to cover state employees 0.5 percent payroll tax contributions was large enough to exacerbate the revenue crisis facing Augusta.
Currently, Maine Gov. Janet Mills (D) and state lawmakers are trying to figure out a solution for a forecasted $450 million shortfall in the FY 26-27 biennial budget and a $118 million current-year deficit in MaineCare funding.
Lachance expressed MSCC’s concerns about the general fund implications of subsidizing state workers’ taxes during Wednesday’s meeting of the Appropriations and Financial Affairs (AFA).
“The decision to include public sector employees in the scope of this law has and will have a continued impact on the general fund. The method of the remittance outlined over the last month, with the state fully paying the remittance, will have implications on this fiscal year and upcoming biennial budget,” said Lachance During Wednesday’s meeting of Maine’s Appropriations and Financial Affairs (AFA)
[RELATED: Maine’s New Paid Leave Rules: Here’s What Businesses and Workers Should Expect…]
Under the new paid leave laws championed by Democratic lawmakers last legislative session, workers will be able to take up to 12 weeks of paid leave for personal or medical reasons. At the end of the leave, employers will be forced to rehire any employee who takes paid leave.
[RELATED: Maine Businesses Brace for New 1% Payroll Tax and Paid Leave Mandate…]
In order to amass the funds required to pay for workers to take vacations for medical reasons and even some ill-defined personal reasons, the state has imposed a massive one percent payroll tax increase.
That tax took effect on Jan. 1, 16 months before working Mainers will have to option to use paid leave. The lead time will allow the Maine Department of Labor and a yet-to-be-determined third-party administrator to bank some of the necessary funding in preparation for what could be a deluge of people looking for some paid vacations.
The program imposes an additional one percent payroll tax on Maine employers with over 15 employees, with half to be paid by the employer and half by the employee.
Smaller businesses will only be required to contribute an additional 0.5 percent payroll tax, but the employer may deduct the full amount from employees, leaving employees of small businesses to pay the same amount as those in larger companies.
Lachance’s statements revealed that not only are state employees eligible for the leave without having to pay the increased tax imposed on all other Maine workers, but their contribution is paid for by the taxpayers already burdened by their own tax increase.
Lachance expressed the disapproval of the MSCC, which fears that continuing to allow state employees to receive benefits at the expense of taxpayers will add to the state’s already massive anticipated budget shortfall.
“We are now concerned that the method of remittance for state employees, if it is maintained, will have a material impact on the state’s fiscal outlook,” said Lachance.
As of December, roughly 23,500 people were employed by the state of Maine, meaning that under the current law. Based on 2024 payroll numbers, taxpayers may be on the hook for more than $8.3 million annually for the one percent tax on state worker pay — and that doesn’t include Maine’s university system and community colleges.
[RELATED: Republican Lawmaker Seeks to Repeal Impending Payroll Tax for New Paid Leave Program…]
Gov. Janet Mills (D-Maine) has already proposed a slew of new taxes in an attempt to make up for an impending FY 2026-2027 budget shortfall, including increased cigarette taxes, a tax on streaming services, increased fees for licensing, and new fees for medical providers.
But the paid leave tax is the only one where state workers — most of whom tend to vote Democrat — are effectively free riders.
Republicans submitted a bill in December, weeks before the new payroll tax was set to take effect, to repeal the program that imposes yet another tax burden on Maine workers.
That bill is unlikely to pass in Maine’s Democrat-controlled government.
It is getting more and more discouraging to own a business in Maine, death by a thousand paper cuts. If a democrat says they support and love small business, run away in the opposite direction.
The state is pretty much run by people who seem to either think we are an endless supply of money or they want as many as possible to be broke and dependent on govt.
Or they’re just stupid.
They are destroying business here in Maine.
They’re destroying the lives of citizens with their reckless spending and “new mainers” (gag)
Are those two leeches pictured considered state workers?
Socialist Democrats in Augusta give a giant “FUCK YOU!🖕” to Maine taxpayers!
And Maine Taxpayers quietly take it!
UNBELIEVABLE!
I don’t understand how state employees can get out of paying their 0.5% share. I reviewed the law and it includes State agencies under the definition of employers who are subject to the law. I didn’t see any exemption for state workers to not pay the 5% share.
If you’re familiar with this law, can you please provide us all with where it says that state employees are exempt from paying their 5% share?
I really don’t understand why state employees aren’t required to pay their 0.5% share. I reviewed the law and I don’t see anything in there that authorizes the state to pay that 0.5% share on their behalf and at taxpayer burden.
Well, DEI picks in Maine rear their ugly heads… hey, everyone who works for the state, lets get us 6 weeks of paid vacation and the peasants taxes will pay for it… sounds great… maybe we don’t even have to show up for work and lets’ not take phone calls… you can’t beat a job like that…POTUS , are you watching?????
Maine govt believes they have the right to enslave us, then enslave us some more
It’s important to identify that State employees didn’t advocate for this scam. It’s another boondoggle by Maine’s criminal organization the AFL-CIO. When you bankrupt the State you can’t get your “constituents” meaningful raises so you create benefits….
THIS IS BULLSHIT!!!!!! PIECE OF SHIT MILLS..
Does anyone really think that Mills won’t dip into the funds that this tax generates to balance her budget? Is there a safeguard preventing this?
Dems love spending other peoples money
Just like when they exempted federal employees from Barry Care, aka Obama Care. In the private world businesses brought in their own insurance company to handle paid leave. Of course these companies fight against you when you apply for it.
Maine=Taxationland, keep voting blue and all the reds will vacate.
Invest in deportation and deliver LEGAL CITIZENS from JANET’S evil taxation slavery and injustice for all hard working
Americans.
The governor depends on her progressive state employee’s and selected progressive bureaucrats to keep her in office and promote her MARXIST policies.
Two tier justice system. Two tier tax system. Taxes for thee but not for the Chinese CCP poison pot farmers or her other gangs of minions sucking around Augusta.
Conservative thinkers get off your screens and find your local town committees and your local county committees and roll up your grassroots sleeves.
Per General Mike Flynn, “Local action effects national outcome.” Get on the Trump train and help work towards turning this New England region to God, family, country and common human sense.
We the outraged people have a lot of organizing, fund raising and campaign work to KICK THE THUGS OUT OF OFFICE!!!
I WILL NEVER USE THIS CRAP! THEFT THEFT THEFT THEFT SO SICK OF BRAINWASHED EVIL DEMONCRATS SICK OF PAYING FOR EVERYONE ELSE
Maybe that is the reason Cracker Barrell Restaurant just closed it’s doors in South Portland
Janit, A Place where a lot of older people ate, not to high priced. And healther than a burger joint.
General Mills is setting up these funds to balance her Budget Shortfalls! If you don’t believe she can do that, Watch Her Crooked Ass!
She is a disgrace that the People of Maine not only voted in once, but twice? I don’t get it? Paul LePage was a better Governor on his absolute worst day than Mills has been at her best! Shameful what She has been allowed to do to ruin a once Great State.
Looks like Clotier has a “no show” job at Bates.
Mainers really are stupid and lazy!!! You were warned and you just kept voting these Communist back into office. Those of us who can afford will leave and live in a tax free state like New Hampshire. Truly Mainers are clueless!!
then not one single state employee should be able to benefit this until they pay up the 5-6 months worth of taxes.
Senate President Mattie Daughtry (D-Cumberland) and House Majority Leader Theresa Cloutier (D-Lewiston) 2 fat lazy orcas one with beady eyes and a tiny lizard lipped pie hole for a mouth and the other with a wonky eye and lizard lips too – both obese nasty looking typical dem women. Minions for Mills
Sadly this is why it’s Despicable Maine.
We wouldn’t have this $450 million deficit if Mills and the Maine CDC had not destroyed “non-essential businesses” by contriving Covid-19 “cases” during the Plandemic by employing the fraudulent PCR test. Mills has been doing her part to destroy Maine State finances, while the Obama/Biden administrations have been destroying the U.S. government finances.
Maine already has one of the highest local tax rates at 12.4% with Maine also having the highest starting tax rate in the nation for the lowest income bracket. In other words. Maine’s government is putting the screws to its lowest wage earners, who can least afford this added burden.
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