Maine Legislature Overrides Governor’s Veto June 30, 2015 Morgan Scarboro Jared Walczak Morgan Scarboro, Jared Walczak In a rare move that caps an intense legislative session, the Maine Legislature has overridden Governor Paul LePage’s budget veto, thereby completing the budget process with mere hours to go before the start of the new fiscal year. LePage’s introduced budget proposed sweeping tax reform, and the Governor repeatedly expressed frustration with the chilly reception by which the legislature greeted some aspects of his plan, coupled with legislative rejection of his subsequent proposal to place an income tax repeal amendment on the ballot. Disagreement between the branches culminated in line item vetoes to, and ultimately a full veto of, the legislature’s budget bill, along with a refusal to sign new legislation until the legislature acts on the Governor’s constitutional amendment proposal. The budget impasse ended today with a successful veto override vote. Here’s a brief rundown of both plans: LePage Proposal Legislative Budget Individual Income Tax Cut rates, reduce top rate from 7.95 percent to 6.5 percent by 2019 Add fourth personal income tax bracket Cut rates, reduce top rate from 7.95 to 7.15 percent Standard deduction increase to $11,600 Corporate Income Tax Reduce preferential tax treatment for specific industries Consolidate four tax brackets to two brackets Reduce top rate from 8.33 percent to 6.75 percent No change in current policy Sales Tax Broaden sales tax base by defining new taxable goods and services Increase sales tax rates, with a few specific exceptions, e.g., car rentals Extend current 5.5 percent sales tax rate instead of letting it expire Increase and expand service provider tax Property Taxes Repeal the estate tax by 2017 Limit property tax exemptions Increase estate tax exemption Increase homestead tax exemption Total Cost $6.3 billion $6.7 billion For the past few weeks, hostility between the Governor and legislature almost entirely overshadowed budget talks. LePage line-item vetoed 64 items in the legislature’s budget, but the Legislature quickly voted on each veto and overturned each one. (Line-item vetoes only require a simple majority to override, but most overrides garnered a two-thirds majority or better.) After line-item vetoes were ineffective, LePage vetoed the entire budget and released a veto message that describes his budget as “too big a concept for some of the small minds in the Legislature to grasp.” Today, legislators succeeded in avoiding a government shutdown, voting to override the governor’s veto and implement their own budget. The motion to override the Governor’s veto passed the House 109-37 and prevailed 25-10 in the Senate. The new budget will go into effect tomorrow. More on Maine here. Stay informed on the tax policies impacting you. Subscribe to get insights from our trusted experts delivered straight to your inbox. Subscribe Share Tweet Share Email Topics Center for State Tax Policy Business Taxes Individual and Consumption Taxes
