Budget includes tax, pension cuts
Gov. Paul LePage yesterday provided some details of his proposed two-year budget, including changes to the state's tax code and the state's retirement system, but did not say how much the final budget would be.
Administration officials are scheduled today to release more details about the biennial budget that begins July 1 and is expected to be in the range of $5.6 billion to $5.8 billion, according to MaineToday Media. The previous two-year budget was $5.7 billion. Among LePage's proposed changes to the state retirement system are reducing benefits to state retirees, capping cost-of-living increases at 2% instead of the current 4% and raising the state employee retirement age from 62 to 65, all of which are estimated to save $524 million over the next two years. Changes to the tax code include lowering the state's top income tax rate from 8.5% to 7.95% and increasing the state's exemption for the "death tax," currently at $1 million, which he said would help family businesses. His proposals would cut taxes by $203 million. He also proposed increasing state aid to public schools by $63 million and halting cuts to higher education.
LePage called the proposal a "jobs bill," saying "my budget has no mass layoffs, no furlough days, no across-the-board cuts and no gimmicks," as well as no state borrowing. The Legislature's appropriations committee will hold public hearings on the budget later this month or early next month, according to the news service.
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