Maine lawmakers close in on budget deal that may include an income tax break

Jun. 21—AUGUSTA, Maine — Top Democrats and Republicans in the Maine Legislature were closing on a budget deal on Monday, settling on key education and municipal aid items and continuing to discuss a new income tax break buoyed by revenue surpluses.

The budget committee unanimously agreed to raise the state's share of basic public school funding to a historic 55 percent and increase revenue sharing to 5 percent of tax revenue by 2023. A 10-minute string of votes ended with panel co-chair Sen. Cathy Breen, D-Falmouth, urging listeners to "stay tuned" as the group works "feverishly" to negotiate the budget before the Legislature returns to the State House next week.

There are still hundreds of items that need to be voted on and negotiations are far from over as sticking points remain. But one key Republican negotiator says bipartisan talks are moving along well and was cautiously optimistic the parties would be able to reach agreement, unlike when Democrats advanced their own two-year budget in March.

"I don't think there's anything sitting on the table that is a hill too steep to climb," said Senate Minority Leader Jeff Timberlake, R-Turner.

It is a far cry from the tone of March, when majority Democrats incensed Republicans by passing their own $8.3 billion budget. Gov. Janet Mills has since proposed an $8.8 billion document that would override that older budget behind revenue projections that were recently raised by $940 million over the two-year period beginning July 1.

Timberlake said he expected the rest of the budget would be voted on by Wednesday to give staff time to finalize the document ahead of floor sessions next week. The budget panel also needs to finalize a Mills proposal to outline the use of $1.1 billion in federal stimulus funds.

But Timberlake was also wary of discussing what items are still causing friction, saying he did not want to jeopardize talks. Republicans have been skeptical of the size of the new proposal as well as the need for $140 million in bonding with revenues up. They have also opposed a ban on sales of flavored tobacco and hundreds of new and temporary government positions.

Republicans handed down a list of priorities in April prior to the budget's reveal as a way to set the table on negotiations. It included dozens of bills in the process of going through the Legislature, although reams of Republican-led bills have been killed while many Democratic measures are on their way to becoming law.

It also included a proposal to extend a tax break on the first $10,200 in income that the Legislature approved in early March for those who claimed unemployment due to the coronavirus pandemic to all Mainers. Timberlake said he did not know if Republicans would get "that exact amount" but said negotiations on that subject were ongoing.

Democrats celebrated the agreement on the education funding and municipal aid in a press release Monday. Mills spokesperson Lindsay Crete said the Democratic governor still expects a two-thirds vote on the new budget to have it go into effect immediately and is talking with committee members to "assist in their negotiations."

Breen brushed off a request for comment after the meeting, saying "all will be revealed" before going into a closed-door meeting with other Democrats.

"Who said we aren't unanimous?" she said when asked about differences between the parties.