Under The Dome: Inside The Maine State House 5-31-13

Augusta, ME

Under the Dome: Inside the Maine State House is a weekly update that provides a high-level overview of recent activity at the Maine State House. If you would like more specific information regarding an item in this newsletter or related to government relations, please contact a member of our Government Relations Practice Group: John Delahanty, Andrea C. Maker or Avery Day.

This Week's Highlights

Additional Gubernatorial Vetoes Sustained

This week, three of Governor LePage’s vetoes were sustained in the Legislature, killing the three underlying bills. On May 28th, the House failed to muster the required two-thirds support to override the Governor’s veto of two bills. The first, LD 468, related to prohibiting smoking on University Maine System campuses. The second, LD 319, related to the Streamlined Sales and Use Tax Agreement. The next day, the Senate sustained the Governor’s veto of a proposal to use revenues from the wholesale liquor contract to pay the State’s hospital debt, LD 1546 and expand Medicaid. The Governor initially proposed this plan to pay the State’s hospital debt but vetoed the bill because the expansion of Maine’s Medicaid system was attached to the proposal during the legislative process. Though this bill is dead, the Legislature and the Governor will continue to grapple with the State’s hospital debt and Medicaid expansion.

Legislative Democrats Unveil Tax Proposal to Close Budget Gap

On May 29th, Democratic leaders in the Legislature held a press conference to announce a proposal to help close Maine’s budget gap for the upcoming biennium. The proposal would institute a two-year delay in reductions in Maine’s income tax rates and doubling Maine’s estate tax exemption, both of which were enacted during the previous Legislature. By delaying these reductions and exemptions, the State would generate roughly $400 million in tax revenue over the next two years. Democratic leaders argued that these additional revenues are needed to fund budget items like municipal revenue sharing. Republican leaders quickly countered that they do not support any tax increases.

It is unclear how this announcement has affected the work of the Appropriations and Financial Affairs Committee. This Committee diligently continues its work to craft a budget for the State over the next two fiscal years. It is uncertain when the Committee will complete its momentous task of developing a biennial budget, that must be passed by a two-thirds majority of the House and Senate and signed by the Governor by June 30, in order for State Government to continue operations on July 1.

Tax Reform Proposal Fate Uncertain

On May 30th, the Taxation Committee held another work session on LD 1496, the major tax reform effort that has been formulated by the bi-partisan “Gang of 11.” Based on feedback provided at the public hearing, the original proposal has been modified so that it would be implemented in stages. At this week’s work session, Maine Revenue Services provided the Taxation Committee with a 10-page document that detailed suggested language changes to the bill to more accurately reflect the intent of the bill and to assist in administration of this proposal should it become law. In addition to these language suggestions, Maine Revenue Services also provided preliminary analysis regarding the budgetary effects of this proposal over the next two biennia. It is unclear how the Taxation Committee is going to proceed with this proposal at this time, though the Committee does intend to share information it has received with the Appropriations Committee in the event this information might inform the formulation of the biennial budget.

Committee Work on Omnibus Energy Bill Complete

On May 30th, the Energy, Utilities and Technology Committee met to review the legislative language of the omnibus energy bill. This is a wide-ranging proposal combining elements of a number of bills before the Committee that relate to, among other things, reforms of the Efficiency Maine Trust and a proposal to reduce energy cost by contracting for natural gas pipeline capacity. This language review largely completes the Committee’s work on this bill, which will soon be reported out of Committee for consideration on the floors of the House and Senate.

Pierce Atwood to Host Governor LePage and New England-Canada Business Council

On June 3rd, Pierce Atwood will host the June Luncheon meeting of the New England-Canada Business Council at our Portland office. The event will feature Governor LePage as the Keynote Speaker and will include a round table discussion with representatives from energy companies from the region.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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