- Associated Press - Wednesday, June 28, 2017

AUGUSTA, Maine (AP) - Lawmakers said Wednesday they’re reviewing the latest budget proposal aimed at averting a government shutdown starting this weekend.

Democratic House Speaker Sara Gideon and Republican Senate President Michael Thibodeau said they’re optimistic and expect lawmakers to vote on a budget Friday. A budget must be in place by July 1 to avert a government shutdown over the Fourth of July weekend.

Any deal would need buy-in from House Republicans, who have a different budget plan that is backed by Republican Gov. Paul LePage but has failed to garner support among other caucuses.

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HOW DID WE GET TO THIS POINT?

LePage first proposed his two-year, $6.8 billion budget in January with hopes of broadening the sales tax, cutting income and corporate tax and reeling back public assistance programs.

Lawmakers have spent the past months holding hearings on the proposal at a time of healthy state revenues. But for weeks, the biggest sticking point has been education funding.

LePage and other Republicans want to repeal a voter-approved 3 percent income surtax on household and individual income above $200,000. They argue that the surtax, which was backed by the Maine Education Association last year, will hurt business and revenue.

Gideon says she’d support repealing the tax if the Legislature made up a chunk of the $320 million in projected revenue.

After the Legislature’s 13-member joint appropriations committee failed to agree on a budget, Gideon and Thibodeau left the matter up to a special six-member committee.

Over the past 10 days, that committee has discussed deals that haven’t gained support from all caucuses.

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WHAT’S IN THIS LATEST BUDGET PROPOSAL?

The two-year, $7.1 billion budget proposal offered by Senate Republicans would scrap the voter-approved surtax while still boosting education spending by $146 million.

Republican Sen. Roger Katz said the state’s tax on lodging would be increased from 9 percent to 10 percent in October to help pay for the additional education funding and property tax relief.

Thibodeau said the proposal incorporates Democratic-backed ideas, including $15 million to fund increased reimbursement rates for direct care workers.

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DOES IT HAVE A CHANCE?

House Republicans said they are reviewing the proposal. Their biggest concerns remain overall spending, funding to eliminate waitlists for the disabled and education initiatives like a pilot program for a statewide teachers’ contract.

House Republican Leader Ken Fredette last week offered a $7.055 billion budget proposal that includes a one-time $125 million for education. It also features ideas backed by LePage and long unpopular with Democrats, including a $5 million cut to an assistance program for asylum seekers.

Meanwhile, Democrats have repeatedly called for a “sustainable” source of funding for public K-12 schools.

Any budget deal would need two-thirds support in the House and Senate to be enacted on time and withstand a governor’s veto.

LePage in the past has taken 10 days to act on the budget, as the state Constitution allows.

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WHAT HAPPENS IF THE GOVERNMENT SHUTS DOWN?

LePage has promised state parks will not shut down, but it’s unclear what services would close, impacting 11,594 state employees and the communities they serve.

The governor was in Washington on Wednesday. His office said if a budget isn’t in place by the end of the day Friday, all non-emergency state services will end temporarily. State officials would declare which positions are “emergency” by Friday’s end.

“With each passing hour, it seems as though the preparations our administration has made over the last two weeks are less an exercise in caution and more likely plans that may need to be implemented,” LePage said.

The Maine State Employees Association opposes a shutdown. LePage said budget negotiations will determine whether state employees receive holiday pay or pay for previously scheduled time off.

Advocacy groups want public assistance services to continue. Local communities predict challenges for vehicle registrations, marriage licenses and birth or death certificates. Secretary of State Matthew Dunlap plans to close most of his entire department, including the Bureau of Motor Vehicle offices.

Maine government last shut down in 1991, when Republican Rep. Tom Skolfield was a regional parks supervisor for the state. He said parks were open without charge and facilities weren’t cleaned.

“It was bloody awful is what it was,” he said.

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