Committee sets budget plan with party-line vote

Committee sets budget plan

In a party-line vote with Republicans opposed, the Appropriations and Financial Affairs Committee set a budget plan just after 1 a.m. on Saturday, after convening for its final work session at 6:25 p.m. on Friday while the House was still in session. 

Some notable final actions included rejecting Gov. Janet Mills’ proposed cuts to low-income food assistance and upping ongoing funding for General Assistance, which helps municipalities pay for basic necessities for those who can’t afford them. 

Regarding health care, the committee added cost-of-living adjustments for direct care workers, though at lower than expected rates, as well as funding for family planning services, but also at a lower amount than providers say they need. 

Several bills currently pending were also worked into the budget plan, including proposals to alter the child tax credit and real estate transfer tax.

The budget bill now heads to the House of Representatives and Senate for approval. 

General Assistance

One of the last additions to the budget that the committee added early Saturday morning was increasing the baseline for General Assistance.

With an 8-4 vote, the committee added $2 million per year ongoing, $4 million in 2025-26 and back payments for 2023-24 to be distributed to municipalities based on their share of overall state reimbursement costs.

Republicans argued against the added spending, noting that most will go to Portland. The state’s most populous city receives the most funding for this program, disproportionate spending that the city’s elected leaders have argued is by design, given that most homeless shelters, and mental health and substance use treatment centers are located in or near Portland. 

“That’s not the way General Assistance is supposed to work,” Rep. Ken Fredette (R-Newport) said, noting that, for the most part, in order to get funds through the program you have to live in the municipality in which you’re receiving it. 

But that’s how it is working currently, said Rep. Drew Gattine (D-Westbrook), who introduced this amendment.

Gattine said he’s heard a saying ever since he’s been involved in municipal government work that the General Assistance program is “a ticket to Portland.”

SNAP

The majority of the committee rejected Mills’ proposed reductions to the Supplemental Nutrition Assistance Program, formerly known as food stamps. 

Maine is one of five states that provide a state-funded benefit to noncitizens not eligible for federally funded SNAP. Mills proposed eliminating what is referred to as the “Hardship D” exemption of the state program, which grants benefits for people who have received their work authorization but are unemployed.

Instead, the committee added $2.5 million for the program in each year of the biennium.  

“When we’re facing certain federal cuts in SNAP benefits to Mainers [and] we know that one in five children in the state goes to bed hungry every night, I can’t think of anything more critical than feeding Maine families,” Rep. Holly Stover (D-Boothbay) said. 

Health care

The committee included 1% cost-of-living adjustments, known as COLAs, for direct care workers for people on MaineCare who are due to receive rate adjustments starting in July, but this is not a fully funded COLA under the current statute. 

The Mills administration started withholding expected COLAs in January. The biennial budget passed in March back paid funding for a 1.95% increase, though more had been expected. 

“As we try to balance all the important things that we need to do, I don’t think we’re ever going to, I’m never going to walk out of here and feel that I’ve done enough,” Gattine said, adding that he hopes when lawmakers return in January for the second regular session that the Legislature can do more. 

Rep. Mark Blier (R-Buxton) pushed back on that, arguing, “If we really want to find the money to fund these people, we can find it,” however he also pledged, “Come January, let’s re-look at this. Let’s give these people the wage increases that they deserve and that we promised.”

However, the committee later rejected Mills’ proposal to restructure that rate setting, with members saying they didn’t fully understand it. Instead, that proposal is now expected to return as a department bill next year. 

Meanwhile, the committee further delayed — to the next Legislature — another health care-related initiative. It removed Mills’ proposal to decrease hospital reimbursement rates but then voted in those reductions starting after the 2027 fiscal year, essentially allowing it to return as an option when the next Legislature sets the biennium budget for 2028-29.

“So we’re making sure we’re taking care of the hospitals,” Fredette said, referring to this item, “but the direct care workers are taking it on the chin,” he added, referring to the COLAs.

The majority of the committee also voted to include a $3 million appropriation for family planning services, which include routine gynecological and well exams, testing and treatment for sexually transmitted infections, birth control, cancer screenings, gender-affirming and behavioral health care, among others. Such funding is not used for abortions. 

This amount is half of what providers requested in a bill this year, which currently sits on the appropriations table.  

Bills

The committee included in the budget funding for a number of bills that had already passed both chambers but were awaiting funding. 

One was a bill sponsored by Senate President Mattie Daughtry (D-Brunswick), LD 1294, which would double the Dependent Exemption Tax Credit, Maine’s version of a child tax credit, for children under six years.

Another was a bill from Speaker of the House Ryan Fecteau (D-Biddeford), LD 1082, to increase the real estate transfer tax on property valued at more than $1 million and requires 30% to be distributed to a new fund in the Maine State Housing Authority, which supports affordable housing.

While there is minimal cost associated with LD 1018, the committee opted to add the initiative to the budget. It prohibits discrimination by pharmaceutical manufacturers, health insurance carriers, pharmacy benefits managers and their agents against pharmacies and health care providers based on their participation in the federal 340B prescription drug discount program.

While most other initiatives were party-line votes, this addition was supported by one Republican, Rep. Jack Ducharme of Madison, who co-sponsored the bill. 

The committee also included funding to the Office of Aging and Disability Services for community-based services such as Meals on Wheels, essentially an initiative to help mitigate the fact that the Older Americans Act is no longer funded by the federal government. 

The committee also backed $3 million for each year of the next biennium to replace current and anticipated reductions in grants administered under the Victims of Crime Act. It also added certain mental health workers under the 1998 Special Plan for Retirement.

Committee yet to convene

As of 5:30 p.m. on Friday, the Appropriations and Financial Affairs Committee has yet to meet on microphone to set the budget plan, after scheduling a work session for 9 a.m.

Adding streaming tax, upping cannabis tax and continuing free community college

Returning on microphone after 9 p.m. Thursday night, the Appropriations and Financial Affairs Committee voted to include several additional taxes proposed by Gov. Janet Mills in the budget, including a tax on streaming services and increasing the sales tax on cannabis. However, the committee included a smaller amount than the governor suggested to continue funding free community college. 

The committee voted 7-4 to include Mills’ proposed new 5.5% tax on streaming services like Netflix and Spotify. 

The committee also voted 8-4 to increase the sales tax on adult use cannabis from 10% to 14%, while reducing the cannabis excise tax rates by one-third. This was not a party-line vote. Rep. Kristen Cloutier (D-Lewiston), who co-chairs the Taxation Committee, said she was not in favor of this initiative.

“I’ve been in contact with some folks who are in the cannabis industry in my district and they have really advocated loudly against this,” Cloutier said. 

With these decisions made, the committee has now decided on what to include, and not include, out of Mills’ major tax proposals. 

In addition to the streaming and cannabis taxes, earlier Thursday the committee rolled back the state’s pension deductions for those with higher incomes and increased the cigarette excise tax at an even higher amount than Mills requested. However, the committee rejected her suggested taxes on ambulances and pharmacies.

Most debate surrounded including funding to continue Maine’s Free College Scholarship, which the committee decided to fund but at a reduced amount. 

Rather than include the $12.5 million per year sought by the governor, the committee voted 9-3 to fund the program at $10 million per year through the next biennium. 

“We’ve had to make hard decisions about what we think we can afford, not afford, and we’re supportive but we believe that they’ll be able to address a need with $10 million a year,” said Rep. Michael Brennan (D-Portland), who co-chairs the Education and Cultural Affairs Committee.

However, to help guide decisions about continuing the program beyond that, the committee will be writing a letter to the community colleges requesting recommendations on eligibility requirements, out-of-state student funding, economy of scale and estimated future funding. 

“We had promised nights that would not be long,” committee co-chair Sen. Peggy Rotundo (D-Androscoggin) said at 10:10 p.m. “We have just a little bit to finish up, but we will do that in the morning.” The committee is scheduled to reconvene at 9 a.m. 

Budget gets bump from a “large and unusual” payment

The Appropriations and Financial Affairs Committee announced Thursday afternoon the state has come into more cash that can be added to the budget. The additional funds are from some state agencies seeing unexpected surpluses this fiscal year. It also comes from two significant estate payments.

The majority of the committee moved all of this funding into the budget plan with 8-4 votes. 

Since the most recent revenue forecast in May, Maine received two “large and unusual” estate payments, Kirsten Figueroa, commissioner of the Maine Department of Administrative and Financial Services, told the appropriations committee Thursday afternoon. This now puts the estate tax line well above what was initially expected.

“Does that mean two people passed and this is where this money came from?” Rep. Ken Fredette (R-Newport) asked.

“I do,” Figueroa responded.  

The way this funding, $24 million, will be added to the budget is also unusual, because technically the money isn’t real until the fiscal year ends on June 30. But ultimately it will be used to pay for part of the $122 million in MaineCare funding for fiscal year 2027 that the committee voted into the budget on Wednesday. 

The majority of the committee also voted into the budget millions of dollars that various departments are not planning to use up by the end of the fiscal year. Among those funds are $4.5 million from the Department of Health and Human Services’ Office of Behavioral Health and $5 million from the Office of Disability Services.

“I would rather keep the money in the account and have it be used for what it should be used for, rather than going to the general fund, which by going into the general fund, is essentially funding MaineCare,” Fredette said. 

Committee saves money by rolling back funding for mental health programs, pensions

While not sticking to its stated start time, the appropriations committee returned Thursday morning to take more straw votes to work toward a complete budget plan. The committee plans to return throughout the day for more votes.

Mental health

Following the deadliest mass shooting in Maine history in 2023, the state put significant resources into bolstering mental health support. However, faced with the current deficit, the appropriations committee opted to reduce some of those programs.

On Tuesday, the committee approved funding for crisis receiving centers in Penobscot and Androscoggin counties but on Thursday voted out money for these centers in Kennebec and Aroostook counties.

In the supplemental budget last year, the governor signed into law funding to develop these crisis receiving centers following the Lewiston shooting. When presenting her two-year budget plan back in January, Mills argued it was not financially feasible to build all of the centers she had hoped. 

Republican budget lead Jack Ducharme of Madison raised concern about walking back on these commitments and said the centers were a point of rare bipartisan agreement last year, though the overall budget was passed mostly along party lines with Democrats in favor. 

“As someone who actually voted for the funding for this in the previous budget, this is a difficult cut for me to accept,” said committee co-chair Rep. Drew Gattine (D-Westbrook). 

Regarding Aroostook County in particular, Gattine said he spoke with the Department of Health and Human Services, whose representatives think that this specific model might not be the best for that rural area, so they may suggest an alternative crisis model in the future. 

The committee also removed funding for 24 mental health law enforcement liaisons to support mental health crisis intervention, and mobile response services.

The majority of the appropriations committee also voted to make cuts to various mental health services.

The committee voted 7-5 to provide county jails $4 million for medication assisted treatment to address drug dependency in fiscal year 2026, but did not include funding for the following year, which Gattine explained could be revisited in a supplemental budget next year. The committee also reduced funding for employee recruitment and retention of staff that provide medication management services within the Office of Behavioral Health.

Mills proposed a number of reductions to the overall state budget, focusing on new programs  that had not yet been fully started. While Gattine again reiterated the cuts are not something he takes lightly, he said, “I really came back to the fact that the baseline of MaineCare, everything that we have funded, provides millions and billions of dollars of support for behavioral health needs. I don’t think we support those needs enough. I’m hoping we can continue to do things to support the needs of people with behavioral health needs.”

Pensions 

Another area where the majority of the committee proposed to save money is rolling back the state’s pension deductions for those with higher incomes.

The committee voted 8-5 to incorporate Mills’ proposal to phase-out a current deduction offered for nonmilitary pensions, though changed the thresholds. 

Mills proposed a phase-out beginning with income over $100,000 for individuals, $150,000 for heads of households and $200,000 for married individuals filing jointly. But the committee backed phase outs starting at $125,000 for individuals, $187,500 for heads of household, and $250,000 for joint filers. 

“The money that we’re taking belongs to them,” Rep. Mark Blier (R-Buxton) said in protest. “It doesn’t belong to us.”

Paid Family and Medical Leave 

The committee voted 7-5 to include funding the governor proposed to help cover the costs of the community college system, Maine Maritime Academy and the University of Maine System for the state-supported positions related to the new Paid Family and Medical Leave Program, which took effect on Jan. 1. 

However, the committee reduced the allocations Mills suggested for the university system, which Rep. Michael Brennan (D-Portland), who co-chairs the Education and Cultural Affairs Committee, said it was because the system negotiated with a company that is allowing them to get premiums to cover some of the cost. 

Amid the voting, appropriations committee co-chair Sen. Peggy Rotundo (D-Androscoggin) wanted to specify that this is one-time funding to cover the initial cost of the paid family leave program, after Republicans raised concerns about the state being on the hook. The committee ultimately incorporated that note.

“So you are going to take the lollipop away from the baby,” Rep. Ken Fredette (R-Newport) said. “I’m anxious to see that. Thank you.”

Additional decisions

The majority of the committee also approved an increase from $5 to $7 for fishing license fees. 

Also, following the request of the Legislative Council, which is made up of the ten elected members of leadership, the committee agreed to incorporate several temporary legislative positions, though did not go so far as to make them permanent. 

Increased cigarette tax, rejected child care cuts, funded MaineCare

The budget took more of a shape Wednesday night, though, appropriations committee co-chair Sen. Peggy Rotundo (D-Androscoggin) said, “we are determined to get this budget done in the daylight,” so the committee is reconvening at 8:30 a.m. on Thursday. 

Substantial decisions were made Wednesday night when the committee reconvened, including increasing Maine’s cigarette tax more than Gov. Janet Mills’ had proposed, rejecting Mills’ proposed cuts to child care worker stipends and Head Start, and adding funding for MaineCare. 

When Mills first proposed her budget in January, a key component she highlighted to address the deficit was her plan to raise revenue through a $1 increase in the cigarette excise tax — from $2 per pack to $3 — and corresponding increases to the excise tax on other tobacco-related products.

The majority of the appropriations committee voted 8-4 to increase it by $1.50.

Since Mills released her proposal, Republicans have been steadfast about their opposition to raising this tax, and to tax increases of any kind. On Wednesday those in the minority party on the committee again made that stance clear.

“I was shocked when the governor came out with the original proposed tax increase on the cigarettes of a buck,” Rep. Ken Fredette (R-Newport) said, “and now to throw it up to a buck and a half. I see in my opinion, with all due respect to everyone around this horseshoe, a lack of ability to make tough decisions on where we’re going to spend money in this state.”

When Mills presented her proposal back in January, she touted it as a way to help generate revenue while simultaneously reducing public health costs in the long-term by disincentivizing people to smoke. Sen. Cameron Reny (D-Lincoln) highlighted that goal in voicing her support for upping the tax, stating that her stepfather recently died of cancer caused by cigarettes.

But Rep. Amy Bradstreet Arata (R-New Gloucester) countered, “I don’t feel like it’s responsible to base our budget on revenue that we hope will go down.”

The majority of the committee, voting 7-5, subsequently approved about $122 million for MaineCare, filling a gap left in the initial two-year budget passed in March that did not include MaineCare funding for the second year of the biennium. 

“I do believe we should pay our bills, but we also had reforms to hopefully reduce that amount that we’re paying,” Arata said, referring to proposals to implement work requirements and other reforms to the program that failed to be included in the supplemental budget for the current fiscal year. “Therefore, I can’t support this motion.”  

The majority almost entirely rejected the governor’s proposed cuts related to child care programs, with one exception. 

Voting 7-5 again, the committee removed from the budget plan Mills’ proposal to reverse the state’s recent investments in child care by reducing worker stipends by $30 million to bring them back to 2022 levels. With the same vote breakdown, the committee also rejected Mills’ proposal to cut funding for Head Start by $7 million. 

That same majority also rejected a proposed $2.5 million cut in fiscal year 2026 to the child care employment award program, which includes child care staff in the Maine Child Care affordability program, however the committee chose to remove funding for the award program in 2027. 

“This was styled as a two-year pilot program, so our intent is to continue the pilot program in 2026, not provide funding for it in fiscal year 2027 at this time,” said Rep. Drew Gattine (D-Westbrook), co-chair of the committee. “We’ll have a chance to evaluate that next year when we reconvene.”  

Although a budget-neutral move, one decision Wednesday night received praise from Republicans. 

Mills proposed elevating the current Governor’s Energy Office to a cabinet-level department in her budget plan but the committee removed that change Wednesday, in light of a separate bill moving through the Legislature that seeks to do that. 

“I appreciate the fact that we are letting this kind of an initiative be debated as it should be in the policy committees and brought to the floor for a vote,” said Republican budget lead Jack Ducharme of Madison. 

Preserving Maine State Grant Program

Wednesday morning the appropriations committee made a number of reductions to the governor’s proposed funding for various departments. Returning briefly just after 3 p.m., the majority of its members chose to again reject a proposal from Mills, following requests from private higher education institutions. 

Currently, all Maine public and private universities, colleges and technical schools that administer federal financial aid, such as the Pell Grant and Direct Loans, are eligible for something called the Maine State Grant Program, which provides need-based assistance.

The governor proposed cutting Maine’s private colleges from the program, which educators and students pushed back on during the public hearing. The Education and Cultural Affairs Committee also requested the change be rejected. The appropriations committee followed suit Wednesday voting the change out of the plan 8-2. 

“Stay tuned,” appropriations committee co-chair Sen. Peggy Rotundo (D-Androscoggin) said after the afternoon votes. “We will be back later. I’m not quite sure when but we will be back.” 

Mobile home program funded while judiciary requests pared down

Indicative of the lack of sleep and long hours legislators are working, appropriations committee co-chair Sen. Peggy Rotundo (D-Androscoggin) accidentally called a vote as unanimous as the committee met while the Senate was still in session Tuesday afternoon. 

The mishap was met with laughs as it was bookended by votes on a number of items — none of which were unanimous. 

The majority of the committee backed one-time funding — a transfer of $3 million from the unappropriated surplus of the general fund to the Maine State Housing Authority — for the manufactured and mobile home park preservation and assistance program. This was a request in a bill that passed the chambers but was placed on the appropriations table. 

There are currently more than 100 bills on this table, which is managed by the appropriations committee. Bills that cost money that hasn’t already been allocated are placed here to vie for remaining unappropriated funding — or, as evidenced by this case, could instead be included in the budget plan. 

After the committee sets the budget, one of its final acts will be to “run the table” and decide which of the remaining bills will receive funds.

Other items added into the plan include one-time funding to upgrade courtrooms with video conferencing technology. However, the committee also moved out numerous other proposals related to the judiciary, such as funding for new positions, resources and ​​increasing the number of jurors called to jury duty.

“I think we’re shortchanging the judiciary,” said Rep. Ken Fredette (R-Newport). 

Rep. Drew Gattine (D-Westbrook), co-chair of the committee, said he believed many of the items the committee ultimately voted out were important. 

“I think by the time we’re done here, there will be over $20 million in new funding approved for them, and I hope the process is that they’re able to come back and we’re able to do more for them over time,” Gattine said. 

A move to maximize federal match for free school meals

Amid chamber work Tuesday morning, the majority of the Appropriations Committee voted in favor of a change aimed to maximize federal dollars for free school lunches in order to save the state an expected $2 million. 

After the COVID-19 pandemic, Maine became one of a handful of states to pass legislation making school meals free.

“[That] took away that stigma and took away that paperwork that was associated with individual families and individual students, so now everybody in the school district does qualify,” said Rep. Michael Brennan (D-Portland), who co-chairs the Education and Cultural Affairs Committee. “But we do have some school districts that have not enrolled in the program, so we’re not able to maximize the federal funding that’s available.”

After the committee voted to pay the difference between the federal reimbursement and full price of meals for schools that participate in the National School Lunch Program, Brennan introduced an amendment to require that in order for schools to get this state funding they must first enroll in the free meal program in a way that makes them eligible for the maximum money available at the federal level. The committee approved the change with a 9-2 straw vote. 

Much of the committee’s work has been approving, or rejecting, a number of state government positions. Republicans have continued to raise objections to expanding state government personnel. 

“I think one thing we can agree on is that it’s all a balance,” said Rep. Drew Gattie (D-Westbrook), co-chair of the committee. “And, maybe we balance things in different places, but finding the right balance is part of what this is all about.” 

Another of Gov. Mills’ proposed taxes removed from plan

Monday morning at the State House began with more talk about taxes as the Appropriations Committee continued its line-by-lines votes on what to include in the budget. 

The majority of the committee voted to remove Mills’ proposed tax on ambulance services, which is one of several tax increases the governor proposed as a means to address the deficit and flattening revenues. 

The tax on non-municipal ambulance service providers would have been equal to 6% of their net operating revenue, which the Mills administration said it would have used to leverage additional federal dollars and eventually increase MaineCare reimbursements.

While Republicans on the committee said they supported removing the tax — as the minority party has made clear it will not support tax increases of any kind — they questioned how the state will deal with those shortfalls and pay for additional spending the committee has approved. 

One example from Monday was reallocating the cost of an emergency coordinator position that is partially funded through federal expenditures to being completely supported by the general fund. 

“We’re moving positions and costs into the general fund, and my only question is, where is that money coming from?” Sen. Sue Bernard (R-Aroostook) asked. “Is it coming from more tax increases? Is it coming from cutting other programs that we haven’t gotten to yet, or what?”

Sen. Peggy Rotundo (D-Androscoggin), who co-chairs the committee, responded, “As we build this budget, we will take care of that in one way or another so that the budget will balance at the end.” 

It is not yet clear whether the committee will support some of Mills’ other proposed taxes or the cuts she proposed to health and child care programs. So far, the committee also voted out a proposed pharmacy tax. 

Implications from federal funding cuts were also top of mind. 

The coordinator position was one of several that the committee readjusted to be more reliant on state funding, though Mills made those recommendations before President Donald Trump’s administration began rescinding congressionally appropriated funds. 

“We have talked about the fact that if federal funds disappear, positions disappear,” Rotundo said. 

But some concerns about federal funding predated Trump’s second term. During the public hearing for the budget bill, the Maine Emergency Management Agency said budget deficits related to federal funding had already resulted in the agency leaving two positions vacant. 

The committee voted to fund two positions fully with the general fund, after they’d previously been supported solely by federal dollars. 

“It was important to make sure that these positions were preserved and that it was worth the investment in additional general fund dollars,” said Rep. Drew Gattie (D-Westbrook), the other co-chair of the committee.  

With less than two weeks left, lawmakers still debating budget plan

During the committee’s last meeting on Thursday, the majority of its members rejected a tax on Maine pharmacies the governor had proposed, while voting in favor of additional funding and rate reform for nursing homes. 

The pharmacy tax would have imposed a 70-cent tax on every outpatient prescription filled by Maine pharmacies, the revenue from which the Mills administration said it would use to leverage additional federal dollars and eventually increase MaineCare reimbursements. 

“I haven’t voted for any items,” said Republican budget lead Jack Ducharme of Madison on Thursday. “Yet, this will be my first, because I believe that we already collect too much taxes.” 

With a 10-2 vote, other Republicans backed removing the tax too, though the holdouts noted that their opposition was because of a lack of clarity about the overall budget plan. 

“I applaud the work of the majority in terms of removing this,” Rep. Ken Fredette (R-Newport) said. “However, I will be consistent in reviewing the overall global budget in determining whether or not I will support it.” 

That sentiment was also shared ahead of the committee voting 9-3 in favor of $20 million in additional funding for nursing homes over the biennium. This includes a $6.5 million investment for rate reform to support the direct care workforce and incentivize permanent staff, which would in turn unlock $12.2 million in funding from the federal government. 

“Nursing home rate reform is very important to us, however at this particular time we have not had a discussion about where additional general funds come from that we’re going to need,” Ducharme said. “In order for me to support this, even though I would historically support something like this, I want to know where the money’s coming from.”

Other Republicans had a different take. While Rep. Amy Bradstreet Arata of New Gloucester would also like to know where the funds are coming from, “I feel right about supporting this,” she said. “I might not support the entire package, but I feel better knowing that this is in there, ultimately.”

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