Maine House Democrats offer to trim school aid surtax in budget impasse

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Good morning from Augusta, where House Democrats have blinked in a standoff over education funding, offering an deal to increase the threshold for Maine’s surtax on high earners and lower it from 3 percent to 1.75 percent.

Republicans are on the record as wanting the surtax gone. Progressives still want to keep it and Senate Democrats didn’t join their House counterparts in unveiling the plan. Even though negotiations are moving toward the middle, there are still fractures on education funding.

It’s the issue largely holding up Maine’s next two-year budget. Discussions are happening behind closed doors between party leaders and members of the Legislature’s Appropriations Committee, which voted out a divided budget last week.

This is a debate over whether Maine will fund 55 percent of local school costs, a threshold set by voters in 2004 that has never been reached. Wrapped up in it is whether legislators will keep, scrap or change the 3 percent surtax on annual income above $200,000 passed by voters last year to fund schools. As it is, the tax is expected to generate more than $300 million over two years.

Republicans hate it, saying it’ll make Maine less competitive and that they’re holding out for a budget that eliminates it. But Democrats kept it in a budget plan they proposed in April to rival Gov. Paul LePage’s original plan in January.

It was pushed by the Maine Education Association and the Maine People’s Alliance, which are loud Democratic constituencies who have been calling on the Legislature to uphold voters’ will. But the reality is that the parties must meet in the middle.

House Democrats led by Speaker Sara Gideon of Freeport tried that this week, offering a deal to fund education at 55 percent by the 2019 fiscal year while increasing the surtax’s threshold to $300,000 and lowering it to 1.75 percent, which is estimated to generate $128 million over two years.

To offset the difference, House Democrats’ plan would find another $114 million by raising the sales tax from 5.5 percent to 5.75 percent, the lodging tax from 9 percent to 10 percent and raising taxes on tobacco products to the same rate as cigarettes, which is called equalization.

“I hope our Republican colleagues join us at the table and finally get serious about finalizing this budget,” Gideon said in a statement.

Democrats have mostly moved in unison on the budget to date. However, Senate Democrats haven’t been touting Gideon’s plan on education funding, reflecting difference that’s likely more about negotiating tactics and less about policy.

In a statement, Senate Minority Leader Troy Jackson, D-Allagash, said Gideon has “made yet another offer in an effort to get Republicans to negotiate seriously” and called it “more generous than many people would have liked.”

“But it shows how serious we are about doing our jobs and passing a budget to avoid the kind of crisis that Republicans seem determined to create,” he said. “The ball is in their court.”

Republicans were tight-lipped on House Democrats’ offer, with Jim Cyr, a spokesman for Senate President Mike Thibodeau, R-Winterport, saying only that “negotiations are ongoing.” A spokesman for House Minority Leader Ken Fredette, R-Newport, declined comment.

Any budget needs to win two-thirds support in both chambers, and the clock is ticking to get it passed and to LePage before the Legislature is set to adjourn on June 21, leaving time to override a likely veto. Here’s your soundtrack, suggested last week by a venting legislative staffer. — Michael Shepherd

Quick hits

  • LePage is in Finland this week on a forest products trade mission. The Republican governor is in the northern European nation with Maine International Trade Center officials, according to spokeswoman Adrienne Bennett. He met on Monday in Helsinki with officials from a forest industry group, on Tuesday with paper, packaging and industry supply companies and will tour an icebreaker service on Wednesday before coming back to Maine on Thursday. — Michael Shepherd
  • Tuesday’s debate over a much-discussed bill to outlaw lying in the Legislature was a doozy. The bill, LD 850, has been through so many iterations that it’s hard to keep track of all the amendments. It also caused considerable confusion in the House on Tuesday afternoon when the body had to stop for 20 minutes or so to make sure everyone knew what they were voting on. As it sits now, the bill would make it a crime for lobbyists or members of the executive branch to provide “false testimony, falsifying testimony or purposely omitting or concealing a material fact related to that testimony to a legislative committee.” That version passed 76-70 after extended debate but is at odds with the current Senate version and has lost the support of its sponsor, Rep. Heather Sirocki, R-Scarborough. “Many expressed support of the original bill but many have said they are insulted by the amended version,” said Sirocki during House debate. Interestingly, the House defeated the bill with mostly Democratic opposition last month but now the caucuses have flipped and it’s mostly Republicans against it. Who knows where the bill will go from here, though in the short term it goes back to the Senate to see if the two chambers can come to agreement. Here’s their soundtrack. — Christopher Cousins
  • Veto votes are becoming a daily occurrence at the State House. While the House and Senate are clashing on bills by the dozens, the legislative and executive branches are also at odds, though neither conflict is anything new. There were a bunch of veto votes on Tuesday and with bills being delivered to LePage’s desk in piles, the trend will continue. Here’s a quick rundown: As you can see in the reading list below, the House sustained LePage’s veto of a bill to provide an affirmative defense for anyone who summons emergency workers to a drug overdose and overrode his objections to another bill that would add nip-sized liquor bottles to the state’s bottle redemption program. That latter veto is next up for consideration in the Senate. The House also overrode a veto of LD 1055, which has to do with the chartering process for credit unions, 141-5; overrode a veto of LD 1085, which deals with licensing dental hygienists, 145-1; LD 459, which amends with the Maine Clean Election Act, 145-1; and LD 917, which calls for a review of the state employee and teacher retirement plans, 142-3. All of those bills now go to the Senate. The House on Tuesday sustained LePage’s veto of LD 613, which sought to protect job applicants from identity theft, with a 79-66 vote. — Christopher Cousins
  • A bill to bar the creation of a firearms registry in Maine could be headed for enactment. LD 9 passed through the House on Tuesday by a convincing 122-24 vote — which means it obviously attracted support from a number of Democrats. The bill may seem benign on its surface but could spell trouble for any future efforts, such as the failed gun sales background check referendum from 2016, toward restricting firearms sales in any way. Most gun control measures, such as concealed-carry permits (which were outlawed in Maine) or background checks for sales require the keeping of data by government agencies. That constitutes a registry or sorts. The bill now heads to the Republican-controlled Senate, which is sure to support it, as will LePage, based on his past statements. — Christopher Cousins

Today in A-town

Daily sessions in the House and Senate continue. The Senate calendar has a backlog of vetoes. See above. Also in the Senate calendar is an interesting tidbit: Former U.S. Attorney Thomas Delahanty, who was fired by the Trump administration in March along with 45 of his peers from across the country, has been nominated by Gov. Paul LePage to active retired status on the Maine Superior Court.

The House continues to churn through mountains of bills that have been returned with committee recommendations. Floor action will swing between routine “paper moving” and debates, depending on when party leaders want to pick fights. At this juncture in the session, Gideon and Thibodeau strive to maintain order by taking calendar items out of order, especially when it creates some breathing room between contentious debates.

We’ll keep track of it all for you but if you have nothing on your own personal calendar for several hours today, you can access the live feeds of both chambers on the Legislature’s homepage. There are a few committees working this afternoon. You can check out that schedule by clicking here. — Robert Long and Christopher Cousins

Reading list

If you’re a little shaky this morning, it’s not just you

Especially if you live in Waldo County. According to news reports, numerous people in the Monroe and Frankfort area reported what felt like an earthquake at around 6:30 a.m. today. There is no indication so far that there were injuries or significant damage, but we’ll be monitoring it for you.

In the meantime, some music might calm your nerves. Here’s your soundtrack. After that, here’s another. — Christopher Cousins

With tips, pitches, questions or feedback, email us at politics@bangordailynews.com. If you’re reading The Daily Brief on the BDN’s website or were forwarded it, click here to get Maine’s only newsletter on state politics and policy delivered via email every weekday morning.

Michael Shepherd

About Michael Shepherd

Michael Shepherd joined the Bangor Daily News in 2015 after covering state, federal and local issues for the Kennebec Journal for three years. He's a Hallowell native who now lives in Gardiner. He graduated from the University of Maine in 2012 and is a graduate student at the University of Southern Maine's Muskie School of Public Service.