Maine Gov. Janet Mills (D) told House Republicans that if they can’t support raising taxes as outlined in her budget, then they should expect her to sign whatever proposal legislative Democrats put on her desk, including a potential increase in Maine’s income tax.
According to House Republican leaders, the Mills Administration informed GOP lawmakers that she would pursue a Democrats-only budget that included tax increases during the Friday, Jan. 10 briefing — even before she had formally released her plan, LD 208.
Last Friday, Jeremy Kennedy, the governor’s chief of staff, and Kirsten Figueroa, the Commissioner of the Department of Administrative and Financial Services (DAFS), delivered a simple message to Republicans: you don’t matter.
Kennedy and Figueroa related the governor’s position just hours before the administration released a controversial plan to increase taxes and spending, even as the state faces a severe revenue shortfall for the next three years.
Gov. Mills’ budget would increase taxes on cigarette smokers, internet streaming services, recreational cannabis, ambulances, and hospitals.
The higher taxes are necessary, they’ve argued, because Maine is now facing a forecasted budget gap of $450 million for FY 26-27 and a deficit of $118 million for current-year spending on welfare.
However, despite the structural gap in revenue versus spending, the budget would increase spending allocated to nearly every state agency. It would also grow the number of state jobs even as the state currently has more than 1,500 job vacancies it has not been able to fill.
“They had to know that many taxes were DOA [Dead On Arrival] with us,” said House Minority Leader Billy Bob Faulkingham (R-Winter Harbor).
Faulkingham said he’s expecting the same “playbook” the Democratic majority has run in previous sessions, which means accusing the GOP of wanting to “shutdown” the state government and then passing a far left spending and tax package amid a sense of impending crisis.
“We were told clearly, and with a chuckle, in the meeting that the reality is Democrats don’t need us to agree to a budget and any protestations we make won’t matter in the end,” said Assistant House Minority Leader Katrina Smith (R-Palermo).
Following the briefing, Faulkingham and Smith joined Senate Republicans for a press statement expressing their opposition to any two-year spending deal that increased taxes.
According to Republican leaders, such a deal would not get a single GOP vote.
[RELATED: Republicans Cheer on Mills as She Signs Largest Tax Increase in Decades…]
The Mills Administration hasn’t explained, either privately to House Republicans or publicly in comments to the press, why Maine must maintain spending at the elevated levels achieved during the pandemic thanks to federal spending—let alone increase spending even more—now that federal pandemic grants have dried up.
With a boost from the federal money printer, Mills was able to grow state spending from $7.6 billion in FY 2019-2020 to $10.3 billion in FY 2022-2023 and a proposed $11.63 billion in spending for FY 2026-2027. But with President-elect Donald Trump’s inauguration on Monday, every indication suggests that the spigot of easy federal dollars is about to be turned off.
The brazenly partisan (but also accurate) comments from Mills’ top staffers suggest that Democrats in the 132nd Legislature are not even going to pretend to be interested in a bipartisan budget this year, as they have in previous years. Nor will they maintain the pretense that some Democrats, like Mills when she was campaigning for re-election in 2022, are opposed to raising taxes.
The Mills Administration’s comments to Republican leaders also suggest that Democrats are confident every House Democrat and Senate Democrat will do as their told when it comes to voting for a partisan budget. That’s a high degree of confidence considering newly elected Democratic caucus members have barely finished orientation.
But House Speaker Ryan Fecteau (D-Biddeford) doesn’t necessarily have to corral rank-and-file lawmakers into supporting Mills’ tax hike package. The alternative would be for House Democrats to craft something more palatable to the progressive southern Maine liberals who tend to run the caucus.
Already, there are indications in the State House that Mills’ budget has irked more progressive Democrats by relying primarily on an increased cigarette tax to generate new revenue. Since poorer Mainers are more likely to smoke, the tax will disproportionately be paid by lower-income individuals and families.
Progressives in the legislature may be more likely to rally around something like LD 229. That bill, introduced by Rep. Ann Higgins Matlack (D-St. George), amounts to a big tax increase on Mainers who report more than $144,500 in annual income.
Far-left Democrats introduce a version of the so-called “Millionaire Tax” in every legislative session, and the kinds of outside groups that get large grants from progressive billionaires have long advocated for such a tax scheme.
But this tax-the-rich plan is worth paying attention to considering it’s co-sponsored by Rep. Melanie Sachs (D-Freeport), the former House Chair of the Appropriations Committee who was key to the budget shenanigans last session.
