Democrats may reconsider budget changes criticized by Gov. Mills, Republicans

AUGUSTA — House Majority Leader Mo Terry defended Democrats’ predawn votes Saturday to take money out of the state’s highway and bridge fund and roll back income tax relief for pensioners, but also said lawmakers are reconsidering budget decisions that came under criticism this week from Gov. Janet Mills and Republicans.

Late-night budget decisions are not uncommon in the final days of legislative sessions, but the votes Saturday by the Appropriations and Financial Affairs Committee are facing strong criticism from Republicans, who are the minority in both chambers.

House Minority Leader Billy Bob Faulkingham on Tuesday called on House Speaker Rachel Talbot Ross, D-Portland, to remove the committee’s House chair, Rep. Melanie Sachs, for creating what he called a “hostile and toxic environment” for Republican members by dismissing their questions and concerns.

“She has caused irreparable damage in her treatment of my members of the committee,” Faulkingham wrote. “It is for their mental health and physical safety that I must make this request.”

Talbot Ross shot back at Faulkingham in a letter Tuesday, saying “long and exhaustive hours” on the budget committee are common and asked him to “please refrain from impugning the character” of another House member.

“Your dislike of this process should not be conflated with the leadership of (Rep.) Sachs,” Talbot Ross said.

Terry defended Sachs while speaking with reporters Tuesday morning and acknowledged that Sachs is facing “a lot of pressure” since the budget vote.

“She’s an incredibly smart woman,” Terry said. “She pays incredible attention to what is asked of her. She pays attention to what we have promised to the people of Maine and what we’re asking to put forward as initiatives. She listens to her caucus. She listens to the people that are telling her what our priorities are.”

When asked whether it was good practice to make significant budget changes in the middle of the night, Terry said, “absolutely.”

“We do a lot of things in the middle of the night towards the end of the session,” the Gorham Democrat said. “It’s sort of the nature of the beast.”

Although Terry defended the timing of the votes, which came as a surprise to Republicans, the Mills administration and some Democrats, Terry also said budget negotiations are ongoing and that Democrats are not standing firmly behind the proposal that came out of committee.

“I wouldn’t say anything is being stood behind strongly because there are still negotiations happening on a bunch of different topics,” Terry said. “I don’t know if rollback is the right word, but definitely reconsideration of all kinds of things.”

A spokesperson for House Democrats later sent out a written statement from Terry that minimized the potential for significant changes to the budget, saying Democrats support the committee’s proposal and are only considering a “handful of potential tweaks.”

“House Democratic leadership stands firmly behind our caucus members on the committee and their work to provide a supplemental budget proposal for our consideration,” Terry said in a written statement.

It wasn’t clear exactly how much new spending is included in the committee’s proposal. Terry said Tuesday that she still did not have that information, or a list of changes made to Gov. Janet Mills’ proposal, which would increase the two-year state budget to $10.41 billion, up from the current $10.3 billion.

Through a series of partisan votes taking place between midnight and nearly 3 a.m. Saturday morning, Democrats on the budget-writing committee voted to give their committee control of the state’s highway budget, which is typically reviewed and approved by the Transportation Committee.

They also voted to take away $11 million in surplus funding from the current transportation budget – a figure that could grow to $60 million in future budgets, said Bruce Van Note, the commissioner of the Maine Department of Transportation, who opposed the move.

Last year, Republican lawmakers convinced Democrats and Gov. Mills to stabilize the highway budget, which used to rely on decreasing revenue from fuel taxes, by dedicating 40% of the sales taxes on vehicles and parts towards roads, bridges and other transportation needs. That funding, estimated at $100 million a year, allowed the state to compete better for federal funding, which can triple state investments.

‘LITERALLY HIGHWAY ROBBERY’

The Democrats’ plan would leave that funding to budget negotiators, which Van Note said would lead to uncertainty when planning road projects.

“This is literally highway robbery,” Rep. Nathan Carlow, R-Buxton, said during a news conference Tuesday.

Republicans viewed that move, along with a party-line vote to roll back income tax relief approved last year for pensioners, as a betrayal of lawmakers’ promises to residents and a sign that the majority Democrats did not bargain in good faith last year.

During a news conference Tuesday, Republicans said Democrats eliminated 16 new state trooper positions that were added to address a shortage of rural patrols and changed a bill that was sponsored by Talbot Ross – and unanimously approved by the Health and Human Services Committee – to bolster mental health resources across the state in response to the Lewiston shooting, saying the proposals were bipartisan.

Republicans also criticized significant cuts to financial assistance for dairy farmers, who are facing a $35 million shortfall. Republicans supported a bipartisan plan to spend $7 million for immediate assistance and then work toward closing 25% of that structural gap.

Rep. Sawin Millett, R-Waterford, a veteran budget expert in the Legislature, said the Democratic proposal to limit aid to $3 million and only address 10% of the gap was “unsustainable and not really worthy of consideration.”

“We were trying our best to get up to $15 million because our farmers are in desperate need,” Millett said. “They’re struggling to survive.”

Sachs defended the Democrats’ budget in a written statement Tuesday.

“We were able to make significant investments in affordable housing, mental health services, public education, child care, nursing home and veterans’ home support, child protection services, and health care, while also looking ahead and making sure we are prepared to navigate any future economic uncertainty,” Sachs said. “To do so, we needed to consider the entire scope of the budget and adjust accordingly.”

The predawn budget action also drew quick criticism and opposition from the governor and the chairman of the Transportation Committee.

MILLS OPPOSED

A spokesperson for Mills said Monday that the governor has “significant concerns” because lawmakers decided to spend $107 million she wanted to set aside for future cost increases to state government and because they proposed rolling back to tax relief for pensioners, reducing aid to dairy farms and “raiding” the state’s highway fund.

“She urges the Legislature to reconsider these ill-advised changes, to avoid creating new programs that will require ongoing funding, and to advance a fiscally responsible budget that is sustainable in the long term,” spokesperson Ben Goodman said in a written statement.

A spokesperson for Senate President Troy Jackson said Monday that Senate Democrats have concerns about the spending plan, including inadequate support for dairy farmers, funding for York Hospital, ongoing funding for Maine veterans’ homes, support for teachers, and language to close the state workforce gap.

“I think there are concerns amongst our caucus with the current version of the supplemental budget that we are hoping to address,” Christine Kirby said.

Last year, lawmakers supported increasing the amount of pension income that’s exempt from state income taxes from $30,000 to $35,000, followed by incremental increases to bring it to $48,000. Committee Democrats, however, voted to increase it to $35,000 and then peg future increases to inflation, a move they said would generate more revenue for the state.

Kirby said the budget recommended by the committee continues to fund public education at 55%, invests $76 million into housing initiatives, restores Mills’ proposed rollback of the Medicare Savings Program, funding services for mass violence victims and overtime costs for first responders related to the Lewiston mass shooting.

Carlow, the Buxton Republican, said his caucus was not surprised that Democrats were “reconsidering” their budget.

“This supplemental budget is reckless, ill-conceived and poorly worked,” he said. “I’m not surprised to learn this afternoon that my Democratic colleagues now need our votes to fix it.”