June 16, 2011

State budget taken to brink of final passage

Legislators of both houses reject last-ditch efforts to thaw frozen cost-of-living increases for retirees.

By Susan M. Cover scover@mainetoday.com
State House Bureau

(Continued from page 1)

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Appropriations Committee House Chairman Patrick Flood asked legislators to reject all amendments to the “carefully crafted” budget.

2006 Press Herald file

The budget also would freeze state workers' salaries for two years and create a study group to consider an alternative pension system for future state workers.

Workers who now get longevity pay would continue to get it, while it would be frozen for newly eligible workers. There are no state government shutdown days in the budget.

The budget would cut income taxes by $91 million. The current 2 percent income tax bracket would go to zero, and the 4.5 percent and 7 percent rates would go to 6.5 percent. The top rate would decrease from 8 percent to 7.95 percent, and Maine would conform to the federal personal exemption and standard deduction.

The plan would eliminate the income tax for 70,000 low-income Mainers.

The Appropriations Committee also voted to increase the estate tax exclusion from $1 million to $2 million and give a tax break to people who withdraw money from retirement funds.

The plan also would allow nonresidents to work longer in Maine before they have to pay income taxes, and exempt aircraft and aircraft parts from the sales tax.

For health and human services, the budget would allow legal noncitizens who are receiving or have applied for help by July 1 to continue to get food stamps and federal cash benefits. It would remove an estimated 1,550 legal noncitizens from Medicaid health insurance if they have not lived in the United States for at least five years. Pregnant women and those under 21 would continue to receive health coverage, as mandated by federal law.

The budget also calls for a five-year lifetime limit on federal cash benefits for any welfare recipient in Maine, sanctions for those who violate the "family contract" they sign to receive benefits, and drug testing for applicants who have been convicted of drug-related felonies in the past 20 years.

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



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