Summary of the Highlights of the Governor's Part II Budget, Bill L.D. 210

Thanks to our Vice President of Advocacy, Linda Caprara, for closely tracking the latest developments on the state budget. The Appropriations Committee wrapped up work on L.D. 210 early Saturday morning, and the amended bill includes several key provisions impacting Maine businesses and taxpayers, from tax increases on streaming, tobacco, and real estate transfers to adjustments in education funding and child tax credits.

Below is Linda's summary: 

SUMMARY OF THE HIGHLIGHTS OF THE GOVERNOR’S PART II BUDGET BILL L.D. 210

The Joint Standing Committee on Appropriations and Financial Affairs concluded their work sessions on the Part II Budget Bill L.D. 210 in the early morning hours of Saturday, June 14th. The Committee voted along party lines, with Democrats voting in favor of L.D. 210 as amended and Republicans voting against the bill. The Office of Fiscal and Program Review is in the process of preparing the amendments and the legislation may be formally discharged from the Appropriations Committee as soon as this morning. This is a snapshot of what is in the proposed budget bill L.D. 210 as amended.

The Committee voted to continue free community college for two years and eliminated the provision in the budget that makes free community college permanent, but the Committee also voted to reduce funding for the community college system by $2.5 million over the two years. Lawmakers also voted to provide $5.9 million toward school meals for all children. The amended budget closes a funding gap of $122 million for Maine Care and doubles the child tax credit from $300 to $600. The budget also increases general assistance funding by $4 million. The Committee used one-time money of $24 million realized from the estate tax as additional revenue.

MAJOR NEW TAX PROVISIONS

• Increases Tobacco/Tobacco Products Tax by $1.50 per pack
• 50 cent per gallon tax on paint
• Changes in Cannabis Law Increases Tax from 10-14% shifts burden from growers to consumers
• Additional Taxes on Private Pensions, phases out the pension deduction for non-military pensions under the income tax based on the income of the taxpayer. The original proposal would have impacted over 22,000 taxpayers. It’s not clear how many taxpayers would be impacted under the new proposal. Phase-out begins for incomes over $125,000 single, $187,500 heads of household and $250,000 for married filing jointly.
• Increases the real estate transfer tax from $2.50 to $6 per $500 for real estate sales above $1 million
• Pays for public employees share of Paid Family Medical Leave for employees of Maine’s community college system, the University of Maine system and the Maine Maritime Academy.
• Sales Tax applied to Digital Streaming Services such as Netflix and Spotify.