Funds goes to Home as Maine GOP threatens to hinder company tax cuts

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Budget goes to House as Maine GOP threatens to obstruct corporate tax cuts

The state supplementary budget goes back to the Maine House. Republicans are likely to seek to change the short-term spending plan to include additional tax breaks that would primarily benefit large corporations.

Both the House and Senate adopted the supplementary budget on Wednesday, the makes adjustments until the last year of the state budget. In a vote on Wednesday morning, the House approved the 83-66 Democratic Budget. Although this vote was sufficient to send the measure to the Senate, it missed a two-thirds majority required ultimately to pass the legislation. The Senate then passed an amended version of Budget 24-10 – a two-thirds majority – and sent it back to the House for review.

“The time has now come to pass this budget to support Maine businesses and families and communities across the state,” Rep. Teresa Pierce (D-Falmouth), Chair of the Committee on Funds and Finances, told members this Chamber before the vote on Wednesday morning. “I call on all of my colleagues to vote with me for this supplementary budget.”

The supplementary budget proposal includes cuts in all state departments introduced by Governor Janet Mills in response to the financial gap created by the pandemic. That includes what critics have called a double tax break for all paycheck protection program recipients. advocate have criticized This proposal as a giveaway for profitable businesses at a time when this money is needed to fund initiatives to help those most in need. The House version actually goes further than Mills’ proposal when it comes to tax breaks on PPP loans, the searched Limit this giveaway to $ 1 million in corporate profits.

The household bill includes, among other things, a tax credit for Mainers who received unemployment benefits, targeted relief for direct caregivers and nonprofits, money to support early college programs and K-12 education, and funds for affordable housing.

The split between the two parties was about whether the budget should include additional tax breaks for wealthy companies. Republicans pushed for further corporate tax cuts of $ 32 million, which the Democrats grouped as “incentives for foreign offshore investment” and “tax breaks for the wealthy elite for three-martini lunches”.

Senate Democrats urge the GOP to halt relief for “lavish tax giveaways”.

After its passage in the House of Representatives, the Senate incorporated the supplementary budget bill on Wednesday evening, with the debate centered on the GOP’s efforts to include further tax cuts for large corporations in the package.

The Senate finally passed the budget late Wednesday with 24-10 votes. This approval was supported by all Senate Democrats and two Republicans – Senator Bradlee Farrin (R-Somerset) and Senator Richard Bennett (R-Oxford). Somerset and Bennett voted for the package after the budget was up changed Add funds to the Bureau of Veteran Services.

Before this change, much of the budget debate centered on Republicans’ desire to bring the spending plan into line with the Federal Immaterial Income Tax Act (FDII) – a domestic business deduction can take a percentage of export sales and one Area of ​​tax law that Senate Minority Leader Jeff Timberlake (R-Androscoggin) freely admitted not fully understanding.

But as Senator Nate Libby (D-Androscoggin) pointed out, very few companies in Maine use the FDII deduction, with only 10 taking it in the 2018 tax year.

In addition to FDI, Republicans are pushing for around $ 24 million in tax breaks in the supplementary budget, which would largely benefit large corporations.

But as the corporate tax filing deadline drew nearer, the Senate Democrats beat up Republicans for trying to stop the supplementary budget relief for Mainers over giveaways for the rich.

Senator Heather Sanborn (D-Cumberland) said companies need certainty about what taxes they will be paying, arguing that the GOP’s obstruction is instead creating uncertainty in an already difficult year.

“It’s March 10th,” said Sanborn, who owns Rising Tide Brewing in Portland. “Our corporate tax is due in five days. Just like the other 28,270 Maine businesses, we cannot file them until we know if the expenses covered by our PPP loans are Maine taxable. “

Sanborn also expressed frustration that Republicans moved the goalposts following a bipartisan agreement on PPP compliance and demanded that the state spend $ 32 million on what they termed “lavish tax giveaways” that were “nothing at all.” to do with the pandemic. ”

Senator Mark Lawrence (D-York) added that full tax compliance – the Republican’s stated position – is not something any state has done in the country.

“All it is is an excuse not to vote for this budget,” said Lawrence of the GOP’s stance. “This budget is a huge relief for Mainers, does what we need for PPP, and brings relief to the unemployed in Maine. And I urge everyone on this body to do the right thing and pass this budget. Let’s help Mainers. ”

Senate deputy majority leader Mattie Daughtry (D-Cumberland) reiterated that assessment, saying FDII and “three martini lunch” tax breaks are not what Mainers are focusing on during the pandemic. She said the proposed budget will bring relief across the state, including for the multitude of people who have lost their jobs during the pandemic.

“This budget is about making sure we get back on track,” she said. “There have been changes and this report ensures that not only are we back on track, but we’re working for the whole of Maine.”

Photo: Maine’s House of Representatives sworn in at the Augusta Civic Center last year | Photo of the foreign minister