AUGUSTA – It’s crunch time for the Legislature’s Appropriations Committee.

The committee’s chairmen have set next week — possibly Tuesday or Wednesday — as their target to finish work on the $6.1 billion, two-year budget that has been proposed, and twice amended, by Gov. Paul LePage.

The committee has voted on some noncontroversial items, but all of the major initiatives have yet to be negotiated. Sen. Richard Rosen, R-Bucksport, the panel’s Senate chairman, said the budget was built around “very large initiatives” that are interrelated.

“Because the budget is designed that way, we kind of have to work all those major pieces simultaneously to reach a conclusion,” he said.

In general, the budget would add money to meet increased demand for Medicaid, fill holes left by a lack of federal dollars, increase state funding for K-12 education, make changes to welfare and include nearly $200 million in tax cuts.

Major changes are proposed in the state retirement system, to address rising current costs and an unfunded long-term liability pegged at $4.1 billion, which must be paid off by 2028.

State workers and teachers would be affected by the pension changes, including a provision that they contribute an additional 2 percent of salary to the system. Figures released recently by the Maine Public Employees Retirement System show that the additional 2 percent would bring most workers’ share to 9.65 percent of salary, while dropping the state’s share to less than 1 percent.

Those workers now contribute 7.65 percent and the state kicks in about 5 percent. The proposed change has the Maine State Employees Association working overtime to lobby lawmakers on the issue.

“We’re going to fight this one to the very end,” said Chris Quint, executive director of the union.

Another sticking point will be a proposal to eliminate health insurance for childless adults, regardless of income, and limit health insurance for parents.

Parents who earn more than 133 percent of the federal poverty level, which is $24,645 a year for a family of three, would no longer qualify for Medicaid. An estimated 28,000 Mainers would lose health insurance.

That change, and others that would reduce or eliminate benefits provided by the Department of Health and Human Services, has prompted Democrats to propose alternatives, said Rep. Peggy Rotundo, D-Lewiston.

“There are cuts there we feel strongly about the need to restore,” she said.

Other pieces of the budget would affect state workers and retirees: health insurance changes, a freeze on merit increases and the elimination of pay that rewards workers for years of service.

All of the tax items — which total nearly $200 million — are left to be decided as well. In the past two weeks, two groups have ramped up pressure on lawmakers to ensure that tax cuts remain in the package.

The Maine Heritage Policy Center, a conservative think tank, is urging lawmakers to support a Republican-backed tax package that it says would benefit Maine families more than one proposed by Democrats.

LePage supports many of the tax cuts proposed by a majority of the Taxation Committee, including a reduction in the top marginal income-tax rate from 8.5 percent to 7.95 percent in 2013.

The proposal would allow a family of four to earn as much as $35,750 a year before paying any state income taxes, up from $21,400 under current law. That’s projected to affect 70,000 tax filers, who now pay state income taxes but would have no tax liability beginning in 2012.

In addition, the governor proposes to raise the estate tax exemption from $1 million to $2 million, eliminate the sales tax on fuel used in the Gulf of Maine, and offer a sales tax refund on parts and supplies for windjammers that are used to carry cargo or passengers for a fee.

Earlier this week, the Manufacturers Association of Maine and the National Federation of Independent Business joined to urge lawmakers to move forward with tax cuts, particularly those that would “reduce state taxes on Maine’s households and businesses.”

On the other side, Maine Equal Justice Partners, a group that lobbies for the poor, sent out information on the proposed Medicaid cuts. Its totals show that nearly 70,000 Mainers — low-income parents, childless adults, low-income seniors and people with disabilities — stand to lose all or part of their Medicaid assistance if the cuts are enacted as proposed.

There are also much smaller, but still controversial, issues to be decided, including proposals to eliminate all state funding for the Maine Public Broadcasting System, repeal collective bargaining rights for child care workers, change general assistance provided by municipalities, and remove public notices from newspapers.

Rosen and Rotundo agree that there’s much to be done over the next several days. The committee is scheduled to meet Friday, even though it is a state shutdown day, and weekend meetings are possible.

Both also agree that a bipartisan vote by the committee is essential to winning the two-thirds support needed when the budget goes to the House and Senate.

“A strong committee endorsement is critically important to send a message to the full membership,” Rosen said.

Rotundo, a former co-chair of the committee, said finishing by early next week will be a challenge. “It always takes longer than you think it’s going to take,” he said.

MaineToday Media State House Writer Susan Cover can be contacted at 620-7015 or at:
scover@mainetoday.com