Budget watch | Lawmakers are busy winding down the legislative session, but in the final days have tackled some big issues, including a controversial tax bill that has rankled members of the business community.
Lawmakers are busy winding down the legislative session, but in the final days have tackled some big issues, including a controversial tax bill that has rankled members of the business community. Here’s a round-up of what legislators have been working on:
Gov. John Baldacci signed the state’s $5.8 billion two-year budget, marking the first time since the 1970s lawmakers have passed a budget smaller than the previous one. The biennial budget reduces spending from the last two-year budget by $500 million, according to a press release from Baldacci’s office. But not long after, lawmakers were scrambling to pass emergency legislation to address an unexpected May revenue shortfall of $21.2 million. Baldacci proposed transferring $24 million in state reserves allocated for budget year 2010 to the current budget year, among other solutions, the Bangor Daily News reported.
Legislators have scaled back a proposed gas-tax hike in the face of opposition. The Transportation Committee originally approved an 11-cent increase, which failed to get enough legislative support, according to the Bangor Daily News. The committee has since proposed a two-year, 5-cent increase, which would help fund major road maintenance and repair work in the state. Maine’s current tax on gasoline is 27.6 cents per gallon and 28.8 cents for diesel, according to the paper.
A controversial tax reform bill passed recently by the House and Senate has caused a stir in the state’s business community. A group of business organizations, called the Not This, Not Now Coalition, submitted a six-page letter to Baldacci listing 10 reasons why he should veto LD 1088, a bill that would increase the state’s meals and lodging tax from 7% to 8.5%, expand the state’s 5% sales tax to cover more goods and services, and decrease the income tax for some Mainers from 8.5% to 6.5%. The coalition argues the bill would stymie job growth and hurt the state’s tourism industry. Baldacci has expressed concerns over some aspects of the bill and has been meeting with legislative leaders to refine it.
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