AUGUSTA – The state’s $6 billion budget is now in the hands of Gov. Paul LePage after it was approved in final votes Thursday in the House and Senate.

The two-year spending plan, described as “the toughest budget in recent history” by Assistant Senate Minority Leader Justin Alfond, will go into effect July 1 if it is signed by LePage. His spokeswoman, Adrienne Bennett, said the governor will read the budget over the next few days.

She emphasized his three primary areas of concern: pension reform, tax cuts and welfare reform.

“He has had positive things to say about the taxes and pension areas” of the budget, she said. “He wants to take a thorough look at the welfare piece. … It’s very important to him, the welfare reform.”

Maine’s Constitution gives the governor the power of a line-item veto, but only within one day of receiving the budget. He has 10 days to decide whether to sign or veto the entire budget.

With a unanimous endorsement from the Legislature’s Appropriations Committee, the budget got strong support Thursday. The House approved it 123-19 and the Senate 29-5, far surpassing the two-thirds needed to enact the budget — and override a veto.

On welfare reform, the budget differs from the one proposed by LePage in February by allowing more people to continue to receive benefits and by creating more types of exemptions.

It would allow legal noncitizens who now receive benefits, or have applications pending as of July 1, to continue getting food stamps and federal welfare money. The plan would remove an estimated 1,550 legal noncitizens from Medicaid health insurance if they have not lived in the U.S. for at least five years. Pregnant women and those under 21 would continue to receive health coverage, as mandated by federal law.

Legal noncitizens must have been in the U.S. for at least five years to qualify for benefits. That’s new in Maine.

And, consistent with one of LePage’s goals dating back to last year’s campaign, the budget would cut off federal welfare money after five years.

LePage also proposed eliminating Medicaid health insurance coverage for childless adults and for parents within certain income guidelines, but lawmakers removed those provisions.

During Senate debate, Alfond, a Democrat from Portland, said he had serious concerns about the tax cuts that are part of the final product. The $150 million package would lower income taxes, give tax breaks to fishermen and redemption center owners, create tax credits for businesses and increase the estate tax exemption from $1 million to $2 million.

“I fear this budget could be used to starve and shape government in the future,” he said. “It is with a heavy heart I will vote again in support of this budget.”

The budget also calls for major reforms to the pension system that covers teachers and state workers.

It would freeze cost-of-living increases for retirees for one year and establish a payment system in lieu of increases for two additional years. It would cap annual adjustments at 3 percent and allow the payments to be applied only to the first $20,000 of annual retirement income.

The budget also would require teachers and state workers to reach normal retirement age before they qualify for state-paid health insurance. And it calls for a study of retirement options for new employees.

Lawmakers praised the Appropriations Committee and LePage for not cutting funds for K-12 education or higher education.

Senate Minority Leader Barry Hobbins, D-Saco, said the Legislature made significant improvements to the budget it received from LePage in February.

“The governor’s original budget created divisiveness among Maine citizens,” he said. “The Appropriations Committee worked tirelessly to moderate this divisiveness.”

MaineToday Media State House Writer Susan Cover can be contacted at 620-7015 or at:

[email protected]