AUGUSTA – During a press briefing on Tuesday, Senate Republicans discussed the decision by legislative Democrats to go it alone in passing a partisan, one-party budget. Budget talks broke down on Friday despite months of attempts by Republicans to reach a consensus, which Democrats apparently didn’t want.
According to Senate Republican Leader Trey Stewart, R-Aroostook, the decision by the Democrats to enact a “continuing services” budget was merely a response to an attempt by Republicans to provide low- and middle-income families with $200 million in tax relief and examine the state’s various welfare systems.
“I’ve been pretty frustrated in what I’ve been hearing in the last few days since the conversation basically broke down and the Democrats flatly rejected what we proposed on our side for budget priorities,” he said. “Yes, we’re in the minority but that doesn’t mean that the people we represent don’t matter. They do, they should have a seat at this table and we worked hard to make that sure they did.”
Stewart explained that the State has experienced an “explosion” of revenue since the start of the pandemic and it has proven surprisingly sustainable. He said it means that structural changes to the tax code are needed to align revenue goals with the cap in state spending established in 2005 once state government reached its mandate of 55 percent of general purpose aid to schools.
“From January through now, it still remains true that our focus is on trying to provide some form of structural tax relief to Maine’s working class and low and middle income [earners],” Stewart said. “Unfortunately that was flatly rejected – the Democrats are not interested in that at all and they made that abundantly clear to us on Friday and effectively ended the negotiations.”
For Assistant Republican Leader Lisa Keim, R-Oxford, Maine’s tax burden is becoming an issue for Maine’s residents and small businesses. She said Democrats are increasing the tax load while Mainers are sinking under its wave.
“Maine is the third-highest taxed state in the nation. We fall just behind Hawaii with New York being first. When I was younger, I remember Massachusetts being referred to as ‘Taxachusetts’ and now they pay significantly less than Maine,” she said. “New Hampshire, our next door neighbor, is ranked 46th and their tax burden is half the amount of Mainers.”
Sen. Rick Bennett, R-Oxford, who serves as the Senate Republican Lead on the Legislature’s Appropriations and Financial Affairs Committee, characterized the budget process as pointless. He said the compressed format embraced by the Democrats in recent years had led to an abdication of fiscal stewardship.
“My overall perspective is that Maine’s budget process is broken. It’s broken from the beginning,” he said, adding that while the governor takes months to prepare the budget, the Legislature only has weeks to examine it. “There was $9.4 billion of the budget that is never really thoroughly reviewed at all.”
He said the initial baseline was so close to the $9.88 billion spending cap that it became an exercise of just looking at new spending priorities without justifying what has already been appropriated. With thousands of open positions across the Executive and Judicial branches and the governor’s request to move temporary federally funded COVID-19 positions into the baseline, Maine taxpayers would be footing a bill that no one is even bothering to look at.
“So it starts off broken and then we have incidents like what happened last week, which just demonstrate even further how broken it really is,” he said. “Because of the failure to accept any sort of input from the Republicans and our Caucus priorities, we’re left with the situation where the Democrats are going to an extra-constitutional move which will require adjourning the Legislature this week.”
In addition to refusing the modest $200 million in tax relief for low- and middle-income residents, which amounts to less than two percent of projected revenue, Democrats also rejected a Republican proposal to convene a working group to examine the welfare, MaineCare, general assistance and unemployment systems. Republicans want the group to see whether the State could bolster its workforce by tightening up the various benefits programs.
“Those are the two elements of the amendment. Very straightforward. Very modest in my view compared to where we are,” Bennett said. “Over that, we’re going to shut down the Legislature.”