Legislature passes budget plan

AUGUSTA – Democrats in the Maine House and Senate narrowly approved the repeal of a $450 million borrowing plan in the state budget and the doubling of the state’s cigarette tax as the legislative session inched toward adjournment late Friday night.

The Maine Senate beat back Republican attempts to amend the Democratic majority plan after more than an hour of debate Friday night and passed the proposal in a 19-14 party-line vote. Sen. John L. Martin, D-Eagle Lake, championed the Democratic plan which he described as “no easy task” to complete.

“But we knew that we had to do it based on potential base closings and some other economic factors,” Martin said.

“His Republican counterpart, Sen. Kevin Raye of Perry, described the journey leading to the defeat of the GOP budget revision in less gallant terms.

“It’s been a twisted and tortured path to this moment,” Perry said before the vote.

Gov. John E. Baldacci is expected to approve the package, which will balance the two-year, $5.7 billion budget, early next week.

Earlier in the day, lawmakers in the Maine House defeated slightly more than a half-dozen GOP amendments and ultimately gave final approval to LD 1691 in a 74-72 vote that also divided largely along party lines. Rep. Jeremy Fischer, D-Presque Isle and a member of the Appropriations Committee, told his seatmates that the Democratic majority’s budget revision plan was the best way to eliminate a $450 million revenue bond devised by majority Democrats and Baldacci to balance the budget in March.

“We have the opportunity to turn our good words about eliminating the borrowing package into good deeds by voting to do it,” Fischer said. “This will be our opportunity – our only opportunity – to do this. … Today with this vote, we can change the paradigm: from right versus left to right versus wrong.”

House Republican leader David Bowles, R-Sanford, acknowledged that the Democratic budget was “a step in the right direction,” but argued that Republicans held a “different vision” of the right direction for the state. On Thursday evening, Democrats, a Green Independent Party member and an unenrolled lawmaker defeated the Republican budget revision that would have deeply cut state programs in a 77-74 vote.

“We do believe in a smaller government,” Bowles said. “Republicans do feel that state government has grown too large and that our spending is somewhat out of control. We don’t believe that government is the answer to all of our problems, and we think that left to their own devices, Maine people will solve many of their own problems.”

The Democratic plan cuts state spending by nearly $125 million while raising another $125 million in new revenue by doubling the state’s cigarette tax to $2 per pack. The Democratic plan also reduces funding for the state’s $160 million Business Equipment Tax Reimbursement program by about $7.5 million.

In contrast, the Republican plan raised no new taxes, but was skewered by Democrats for pushing about $20 million in state worker salary payments into the first month of the next fiscal year that starts July 1. The GOP plan also slashed existing health care programs, including the DirigoHealth program, to save about $50 million.

The budget revision vote was among the last for the Legislature’s special session, which was precipitated by the Democratic majority’s insistence on using the $450 million revenue bond to balance the budget. Republicans reacted to that decision by initiating a people’s veto to repeal the borrowing component at the ballot box in November and the idea caught on with Maine voters, according to proponents.

Democrats and the governor began backing away from the $450 million loan last month and then announced the plan should be repealed in the aftermath of the federal Base Realignment and Closure Commission’s announcement to phase out three military installations in the state. The governor and the majority party subsequently agreed to scrap $200 million in spending plans from the loan and devise a way to chop the remaining $250 million from the state budget.

Republicans and Democrats on the Appropriations Committee were able to agree on about $110 million in budget reductions to meet the $250 million target, but chose different approaches to closing the remaining $140 million gap. Bowles, the House GOP leader, insisted Democratic reliance on increased taxes was not helpful to improving the state’s economic profile.

“But is it better than borrowing [$125 million], yeah, it probably is,” he said. “But is it the right thing to do in a state that already has the highest tax burden in the nation? I think we could have done something different. I think we could have done something better.”