Jun. 18—AUGUSTA — Lawmakers narrowly approved adding $320 million in spending and additional taxes to the state’s next two-year budget that was voted on this spring, after a brief rebellion among progressive Democrats who wanted to replace higher cigarette taxes with higher taxes on the wealthy.
Six Democrats in the Maine House of Representatives initially joined Republicans on Wednesday and voted against the spending plan, but reversed course after the proposal cleared the Senate hours later in a 19-15 party line vote.
The budget was scheduled for additional votes Wednesday afternoon and evening. But the unexpected conflict between the two chambers — both controlled by Democrats — added a layer of uncertainty as lawmakers hoped to wrap up their session by the end of the day.
Already, Democrats were expected to push the budget through without any bipartisan support. Republicans have vowed for months to withhold support for any budget that includes tax increases, and have highlighted that since Democrats took over state government in 2019, the budget has increased from $8 billion to the current $11.6 billion proposal.
But Democrats ran into opposition from their own party, including Rep. Nina Milliken, D-Blue Hill, who delivered a tearful rebuke of the spending plan Wednesday. She criticized the inclusion of an increase in the tobacco tax and an unwillingness by members of her own party to instead increase taxes on the rich.
“This proposed budget is balanced on the backs of some of Maine’s poorest residents through regressive taxation. Full stop,” she said. “We owe it to our constituents to do better — to tax people who are super wealthy, so that the poorest people in our community see some relief.”
Milliken challenged Democrats to stand up to Gov. Janet Mills, who has opposed any broad-based tax reform or tax increases, including increasing taxes on millionaires. Milliken noted that progressive tax measures have received Democratic support in the lower chamber.
“We should be standing up to our executive and sending her a bill she would veto if that’s what it takes,” she said. “We are hypocrites if we sit on this floor as members of the Legislature of this great state and frankly push a green button to save her from having to veto a budget that we seem to agree on.”
Democrats only have a three-seat majority in the 151-seat House, so they can’t afford to lose many votes. Members who opposed the budget in Wednesday’s initial vote were Milliken, Sally Cluchey of Bowdoinham, Cheryl Golek of Harpswell, Grayson Lookner of Portland, Rafael Macias of Topsham and Sophie Warren of Scarborough.
Rep. Amy Arata, R-New Gloucester, said prior to the vote that lawmakers did not need to approve a supplemental spending bill before adjourning, because Democrats had already passed a continuing services budget earlier this year.
“The good news is that if this budget doesn’t pass, nothing bad will happen,” Arata said. “The budgetary needs have already been met and we will need to pass a supplemental budget after the Dec. 1 revenue forecast anyway.”
The budget is essentially a change package to the $11.3 billion continuing services budget that passed in March and includes a slate of tax increases on things like tobacco products, cannabis, streaming services, paint, and higher fees for hunting and fishing licenses.
The $177 million in additional revenue, plus more than $25 million in transfers, would largely maintain programs already approved by lawmakers as revenues flatten and costs increase.
“This budget meets the moment,” Rep. Drew Gattine, D-Westbrook, said. “It addresses the biggest issues Maine people are facing, and protects critical investments we have made in the past in health care, food security, education, housing and child care.”
The 357-page budget proposal from the Legislature’s budget committee was publicly released Monday afternoon.
As of Wednesday morning, Republicans had submitted six amendments that included efforts to increase MaineCare funding for Maine Veterans Homes, hire four additional state troopers for Washington County and eliminate the tobacco tax increase. The Senate had voted against four of them by Wednesday afternoon.
The only Democratic amendment, offered by Cluchey, seeks to add a 2% surcharge on incomes over $1 million dollars to support public education. That had not been voted on.
In March, Democrats used their majority to pass an $11.3 billion continuing services budget that continues to fund 55% of public education and provides $122 million to help stabilize the MaineCare program. But that budget didn’t include at least $122 million in additional funding needed to fund MaineCare — Maine’s Medicaid program — in the second year of the budget.
The governor’s budget office has said the continuing services budget did not include $285 million in additional spending originally proposed by Mills. Nor did it include any of her proposed tax increases, which would generate an estimated $156 million, or service cuts. But it did include about $120 million in unallocated revenue.
Over the weekend, Democrats on the budget committee finalized the Part 2 budget, which eliminated Mills’ proposals to end Supplemental Nutrition Assistance Program benefits for noncitizens as well as reforms to General Assistance aimed at returning the program to its original mission of being a last-resort safety net program, rather than long-term housing support.
While they declined to increase taxes on nonmunicipal ambulance services and pharmacies, which Mills said would unlock additional federal funding for MaineCare providers, Democrats did include her proposal to subject streaming services, such as Netflix, Hulu and Spotify, to the state’s sales tax, increase cannabis taxes from 10% to 14% and increase the cigarette tax from $2 a pack to $3.50, which was 50 cents higher than Mills proposed.
Democrats also supported Mills’ proposal to roll back pension tax relief for higher-income retirees, phasing out the breaks for a single person making $125,000 and couples making $250,000. And they included a proposal from House Speaker Ryan Fecteau, D-Biddeford, to raise taxes on home sales over $1 million for affordable housing projects.
The budget also extends the free community college program for the students who graduated high school in 2025, but did not make the program permanent, something Mills advocated. And it closes the MaineCare deficit, invests in child care, increases funding for nursing homes and provides a 1% cost-of-living adjustment for direct care workers.
Arguments in the Senate early Wednesday afternoon largely mirrored those in the House. Republicans questioned the wisdom of relying on Democrats’ tobacco tax, which they argue will force people to quit smoking, to pay for ongoing programs.
Sen. Jeff Timberlake, R-Turner, said lawmakers should tighten their belts and reduce spending to balance the budget, rather than increase taxes to pay for more programs.
“When Maine families face tough times, they cut back, they budget carefully, they make sacrifices (and) they expect their government to do the same thing,” Timberlake said. “(The budget) fails that test. It taxes too much. It spends too much. It spends freely. And it risks too much of Maine’s future on a false promise that bigger government is better government.”
Senate Democrats conceded that the budget is not perfect, but said it is worthy of support because it helps stabilize essential services, including health care, education, free school meals for students and support for emergency shelters.
“This budget is about avoiding harm just as much as it’s about providing good things for the people we serve,” said Sen. Cameron Reny, D-Round Pond. “Voting against this budget is just not a political decision, in my mind it’s a moral one. It risks the health of our neighbors, the security of our families (and) the futures of our children.”
This story will be updated.
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