Final hours | Counting down the final hours of the session
Lawmakers scramble to finish budget
- Pension, tax cuts, DHHS targeted
- April revenues improve
The Legislature is expected to complete its budget work by a looming June 15 deadline, but Senate President Kevin Raye, R-Perry, says scores of issues remain unresolved.
Changes made in May to Gov. Paul LePage’s proposed budget have slowed the budget-writing process, Raye acknowledged. The budget was first proposed in January with hearings throughout all of February. But the budget should be ready for consideration by the end of the first week in June, Raye said.
“It’s really going to come down to three areas: pensions, tax cuts and the Department of Health and Human Services, and those are some major knots to untie before we can get to a two-thirds budget,” said Rep. Emily Cain, D-Orono, the House minority leader and co-chair of the appropriations committee last session.
Budget writers did get some good news with state revenues improving in April, coming in $9.7 million above projections, bringing the year-to-date surplus to $31.4 million as legislators work to reach agreement on the $6.1 billion two-year budget.“I was a little surprised that the corporate [income tax] is still performing well, even though the recent forecast suggests that corporate profits in the long term, if not in the short term, will be trending downward,” said Finance Commissioner Sawin Millett. “I was also a little surprised the sales tax is still holding up.”
So far this budget year, sales taxes are above estimates by $8.5 million and corporate income taxes are $6.1 million above estimates. But the personal income tax is driving the overall positive revenue picture, up $4.3 million for April and $26.5 million through the first 10 months of the budget year. “The recent revenue forecast had us ending the year with a $12.5 million surplus and it looks like we are going to beat that,” Millett says. The new budget year starts July 1.
“It is very encouraging news,” said Sen. Richard Rosen, R-Bucksport, co-chairman of the appropriations committee. “It indicates that the Maine economy is holding through what we see as major pressure from the increase in energy prices.”
Teen work rules loosened
- Amended bill allows longer, later hours
- Original measure set no limits
A bill lifting all restrictions on the number of hours teens can work outside of school hours has been considerably watered down from its original version.
As amended by lawmakers, the limit for 16- and 17-year-olds is 24 hours in a week, with a six-hour-per-day limit, and the measure also bans work after 10:15 p.m. Sen. Chris Rector, R-Thomaston, co-chair of the Labor, Commerce, Research and Economic Development Committee, said the legislation brings Maine more into line with other states. “We have been the outliers, far more restrictive than our New England counterparts and far more restrictive than most other states,” Rector said.
Sen. Phil Bartlett, D-Gorham, is worried that allowing high school students to work later at night and for longer hours will affect their ability to handle school assignments and prepare for higher education. “We’re going to increase it now, so they’re going to spend as much time at work as they did at school during the day,” he said. “That’s 12 hours essentially, of work, of focused attention, during the day, leaving little time for any homework, for sleep, for dinner with the family, you name it.”
But Sen. Earle McCormick, R-West Gardiner, said when he was a teacher, students often talked about staying up late to watch TV. “I used to teach eighth grade and I can’t tell you how many kids would come in on Tuesday morning and say, ‘Mr. McCormick did you see that game last night?’ And I’d say, ‘I went to bed at halftime.’ These are 13-year-olds staying up past midnight watching Monday night football,” McCormick said. “So the assumption that somehow they’ll just be home studying if we take things away from them I think is false.”
Rector says some students choose to play sports or participate in theatre, while others work for many different reasons. ”I had a call from a young person who was asking for extended hours in relation to this bill they’d heard about; this because they were helping their single mom pay the bills at home for they and their siblings,” he said.
Delegation predicts debt ceiling rise
- August deadline looming
- Lawmakers spar over spending cuts, taxes
The federal credit card is maxed out, but the Obama administration has a temporary reprieve as lawmakers work to increase the federal debt ceiling while laying out a blueprint to reduce the budget deficit.
The federal government must borrow money this year to pay its bills because the budget includes $1.5 trillion in spending — including for entitlement programs, the military and the interest on existing debt — with no funding source. Republicans are pursuing drastic spending cuts in return for raising the $14.3 trillion U.S. borrowing ceiling by early August.
“We have to have a long-term, sustainable debt reduction plan,” said Sen. Olympia Snowe. “I see that as pivotal to our future. But regardless, we know it has to be done and it has to be done as part of a debt-reduction plan.” Snowe expects Congress will extend the debt limit because of the severe consequences of not raising the limit to allow government to function.
“It’s not only entitlements that we have to look at,” second district Congressman Mike Michaud said. “You have to look at the tax breaks that are out there. I think it is outrageous that General Electric made billions of dollars and paid no taxes.” To get to the heart of significant debt reduction, programs and tax breaks must be cut or eliminated, he said.
Some of the issues under discussion between congressional leaders and the Obama administration include increased efforts to eliminate fraud and abuse in entitlement programs like Medicaid, increased premiums for federal pension plans, and the sale of government properties and radio spectrum for wireless services, as well as cuts in agricultural subsidies.
“I think the debt ceiling debate presents a real opportunity for Congress to approve some budgetary reforms that will put some real constraints on spending,” said Sen. Susan Collins. Tax breaks, particularly for the very profitable oil industry, should be on the table, and any deal will have to include new revenues along with spending cuts to get the bipartisan votes needed to pass, Collins said.
“People are going to have to bite the bullet and raise the debt ceiling basically for the economy of our country to move forward and for us to be alright in the financial markets around the world,” first district Congresswoman Chellie Pingree said.
Mal Leary runs Capitol News Service in Augusta. He can be reached at editorial@mainebiz.biz. Read more of Mal’s columns here.
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