- Associated Press - Saturday, June 6, 2015

AUGUSTA, Maine (AP) - A divided Maine legislative committee approved a two-year, roughly $6.6 billion state budget on Saturday that doesn’t include the income tax cuts or welfare changes sought by Gov. Paul LePage and House Republicans after legislative leaders failed during weeks of intense negotiations to strike a deal that all sides support.

The measure approved by the Appropriations Committee with a 9-4 vote is the result of an agreement reached by Democrats, who hold the majority in the House, and Republicans, who control the Senate. It boosts funding for schools, maintains state aid to municipalities and brings the sales tax down to 5 percent.

But House Republicans remain insistent that a final spending plan must include their priorities and vow to block the measure’s passage. The 68 seats they hold in the 151-member House are enough to defeat the budget if their caucus remains united.

“House Republicans continue to remain absolutely steadfast in our priorities, which are income tax reductions and welfare reform,” said House Minority Leader Ken Fredette. “House Republicans are willing to stand for those principles.”

The four House Republicans on the committee voted out their own budget proposal and the competing measures now head to the Democratic-controlled House. Legislative leaders are expected to continue negotiating throughout the weekend and next week in an attempt to reach a deal that wins everyone’s support. The bill can be amended on the House floor.

LePage praised House Republicans for standing firm against the budget deal and criticized Democratic leaders for “fighting tooth and nail to defend the status quo.”

House Republicans “demand a budget based on solid principles, while Democrats want to pass a business-as-usual budget just so they can pack up and go home for the summer,” LePage in a statement Saturday.

The potential for a government shutdown grows daily as the June 30 deadline quickly approaches. Lawmakers need to send a final spending plan to the governor’s desk by June 18 in order to have enough time to overturn a likely veto from LePage.

Senate Republicans and Democrats reached a deal earlier this week to leave the income tax as is, but to pass a constitutional amendment designed to make it harder for lawmakers to raise the tax in the future.

That compromise has created a deep rift between the two Republican caucuses.

Fredette accused his fellow legislative leaders of cutting him out of negotiations and LePage called the deal “a scam.” A nonprofit political organization led by the governor’s daughter accused Republican senators in robocalls of “working behind the scenes with liberal Democrats” and supporting “taxpayer-funded welfare for illegal aliens.”

Democrats and Senate Republicans say they have no choice but to make concessions in divided government.

“If the House Republicans and the governor choose to shutdown state government, it will be because they insisted on prioritizing tax breaks to the wealthiest. Simply put, they have chosen to sell Maine people ideology rather than a plan that can work,” Senate Democratic Leader Justin Alfond said in a statement.

The spending plan backed by Democrats and Senate Republicans would increase funding for K-12 schools by $80 million over the biennium, and maintain revenue sharing at $62.5 million annually. The sales tax, which was raised to 5.5 percent two years ago, would revert back to 5 percent and military pensions up to $25,000 would be tax free.

The House Republican version includes a 22.5 percent reduction in the income tax to all income levels, phased in over four years. It would also eliminate welfare benefits for immigrants - including asylum seekers - who can’t prove they’re living in the U.S. legally.

Republican Sen. James Hamper, co-chairman of the committee, said he doesn’t believe that either measure will get the two-thirds support necessary in both chambers to pass. But he said he’s hopeful that legislative leaders will be successful in reaching an agreement to ensure that state government doesn’t shutdown at the end of the month.

“I’m confident that in the coming days we will have something that will draw both parties, both chambers together,” he said.

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Follow Alanna Durkin at http://www.twitter.com/aedurkin

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This story has been corrected to show the approval happened Saturday, not Friday, and say LePage said Democrats are fighting “tooth and nail” not “tool and nail.”

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