On Thursday, March 17, the Joint Standing Committee on Taxation held a work session on LD 1995, An Act to Make Supplemental Appropriations and Allocations for the Expenditures of State Government, General Fund and Other Funds and 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), LD 1995 is the Governor’s supplemental budget bill for fiscal years 2022-2023. Throughout the past several weeks, the Appropriations committee has held public hearings on the different provisions in the supplemental budget. This week and next, each committee is supposed to report back to the Appropriations committee with its recommendations. The Taxation committee held several votes on many of the provisions.
In LD 1995, Governor Janet Mills is proposing to provide funding for payments to taxpayers through the Covid Pandemic Relief Program. The bill provides a $510 payment to eligible Maine citizens who meet certain income guidelines. Those guidelines would be as follows: single who make $50,000; Heads of Households $112,500; Married Filing Single $75,000; and, Married Filing Jointly $150,000. With respect to this provision, the committee voted out three different reports. The first report supported the Governor’s proposal as proposed; the second placed a time limit for the payments to be distributed before July 31, 2022; and, the third changed the income thresholds for those receiving payments to $50,000 for single; $75,000 for Heads of Household; $100,000 for Married Filing Jointly; and no mention of Married Filing Separately.
The committee discussed the Maine Educational Opportunity Tax Credit at length. In the supplemental budget, the Governor proposed to replace the current credit with a new Maine Student Loan Relief Tax Credit. The new $2,000 credit would be refundable and subject to a lifetime limit of $25,000. The credit would be available to any student graduating after 2007 from an accredited community college, college, or university after December 31, 2007. On the other hand, the current Maine Educational Opportunity Tax Credit is a $2,500 credit, which is refundable only if the student obtains a degree in either Science, Technology, Engineering, or Math (STEM). Unused portions of this non-refundable credit could be carried forward 10 years. Under both proposals, the recipients would have to live and work in Maine.
The committee voted to offer the $2,500 refundable credit, available to any student, with a $3,500 refundable credit for STEM students already in program.
Committee members had issues with the amount of the credit being reduced from $2,000 to $2,500, as well as “carry forwards” due to allowing students in the current program to make use of all their carry-forward credits.
The committee is due to report back on Friday, March 18. If you have any questions, please contact Linda Caprara, senior government relations specialist, by calling (207) 623-4568, ext. 106, or by emailing email@example.com.