Supplemental budget bill gets bipartisan support

The Legislature approved the Governor’s supplemental budget bill, now known as Public Law c. 635, An Act to Make Supplemental Appropriations and Allocations for the Expenditures of State Government, the General Fund, Other Special Funds, to Change Certain Provisions of the Law Necessary to the Proper Operations of State Government for the Fiscal Years Ending June 30, 2022 and June 30, 2023, sponsored by Rep. Teresa Pierce (D-Falmouth).

The Legislature approved the Governor’s supplemental budget bill, now known as Public Law c. 635, An Act to Make Supplemental Appropriations and Allocations for the Expenditures of State Government, the General Fund, Other Special Funds, to Change Certain Provisions of the Law Necessary to the Proper Operations of State Government for the Fiscal Years Ending June 30, 2022 and June 30, 2023, sponsored by Rep. Teresa Pierce (D-Falmouth).

The supplemental budget passed overwhelmingly by 199-16 in the House and 32-2 in the Senate. The $1.2 billion budget does several things. First and foremost, it provides $729,300,000 million from the unappropriated surplus of the General Fund to provide payments of $850 to over 800,000 eligible taxpayers. Payments will begin to be distributed in June. The law increases the earned income tax credit for tax years beginning on or after January 1, 2022, from 25% to 50% of the federal earned income tax credit for individuals without qualifying children and from 12% to 25% of the federal earned income tax credit for all other eligible individuals. It increases the property tax fairness credit for tax years beginning on or after January 1, 2022, from $750 to $1,000 for resident individuals under 65 years of age and from $1,200 and $1,500 for resident individuals of 65 years of age and older.

The law replaces the current Educational Opportunity Tax Credit (EOTC) with a simplified credit called the Student Loan Replacement Tax Credit of up to $2500 for a qualified individual’s repayment of student loans for taxable years beginning on or after January 1, 2022. There is a lifetime credit cap limit of $25,000 per individual. Unused credit amounts under the old credit would be eligible to be applied to the new credit subject to the $2500 limit. It also grandfathers in some portion of previously accumulated credits. Qualified individuals who utilized the EOTC credits during the 2019, 2020, and 2021 tax years would be allowed to take a credit for any leftover loans up to a limit of $3,500 in total rather than $2,500.

In addition to the above, the new law provides for $60 million in relief for farmers impacted by the PFAS legislation. The law also provides $20 million for free community college for eligible high school students graduating in 2020, 2021, 2022 and 2023. Among other things, the statute establishes the Emergency Housing Relief Fund Program with Maine State Housing Authority and provides $22 million for rental assistance to address housing issues within the state and transfers $8.5 million to a COVID-19 response fund.

Obviously, the budget contains several other provisions beyond these highlights. If you have any questions, please contact Linda Caprara by calling (207) 623-4568, ext. 106, or by emailing lcaprara@mainechamber.org.