- Associated Press - Monday, June 1, 2015

AUGUSTA, Maine (AP) - A potential state budget deal crafted by the leaders in Maine’s Democrat-controlled House and GOP-led Senate that would lower the sales tax and make it harder for future lawmakers to raise income taxes revealed deep divisions within the Republican Party on Monday.

While Republican Senate President Mike Thibodeau touted the proposal as “historic,” House Minority Leader Ken Fredette said his caucus will stand firm against any budget that doesn’t lower income taxes and overhaul welfare programs. Fredette said he believes he has enough votes in the House to block the deal on the table, setting the stage for a possible government shutdown if a spending plan isn’t in place by June 30.

“Our caucus stands resolute in passing a budget that reflects the principles that Republicans believe in,” Fredette said, adding that GOP Gov. Paul LePage supports his effort.

The tentative budget agreement includes a proposed constitutional amendment that would require lawmakers to get two-thirds support in each chamber in order to raise income taxes. It would also allow the current 5.5 percent sales tax to revert back to 5 percent and would eliminate the tax on military pensions, among other things.

In exchange, Democrats are seeking more money for education and workforce development programs and increased property tax relief through the homestead program.

Senate Republicans have remained staunchly opposed to LePage’s proposal to raise the sales tax to 6.5 percent and expand it to more services in order to pay for an income tax cut. Thibodeau acknowledged that there are some things in the budget deal that his caucus doesn’t like, but he said the constitutional amendment would be a big win for Republicans, who have been pushing for such a measure for years.

“This is a historic opportunity,” he said. “It’s a chance to bridle the growth of state government not just for two years or four years but literally for decades.”

Fredette said he feels as though he has been cut out of budget negotiations and argued that lawmakers on the Appropriations Committee have not yet seriously considered proposals to lower the income tax. One option to help pay for the income tax cut would be to keep the sales tax at 5.5 percent, he said.

Negotiations among legislative leaders and members of the committee were expected to continue Monday.

Democrats and Senate Republicans would need the support of the four unenrolled or independent members and nearly 20 Republicans in the House to get the two-thirds support necessary to pass the budget and to override a nearly certain veto from LePage.

Democratic House Speaker Mark Eves said the consequences of a state shutdown are too significant to “even flirt with the idea.” He said he believes there’s enough time to convince Republicans in the House of the merits of this proposal.

“Everybody gets something here and we really should be able to support a budget that keeps state government open and functioning,” he said. “We have tourists coming to our state. We need to make sure our state parks are open. We have responsibilities as legislators to make sure that government functions.”

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

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