THEY’RE COMING BACK
Legislature to Reconvene on Monday, April 24th
(April 20, 2000) A number of key legislative issues including the Budget still have to be resolved by the Legislature when it reconvenes on Monday, April 24th.
The Budget – Under consideration when the legislators get back to Augusta is a 600 page plus compromise budget that will spend all of the $345 million in surplus tax revenue, will spend millions from the tobacco settlement funds, and will require the state to borrow an additional $33 million. While a majority of legislators support the compromise budget developed by the Governor, Senate Democrats, House Democrats, and House Republicans, the Senate Republicans have submitted a minority budget and plan to block any attempt to pass the budget by a 2/3’s majority. The 2/3’s majority becomes important because if the budget is to be effective when the new fiscal calendar begins on July 1st it must be passed by a 2/3s vote. If the budget proposal only gets a majority vote, then the budget would not become effective until 90 days after adjournment or late July at best. The Senate Republicans are opposing the majority budget because it requires borrowing $33 million, primarily to finance a new state mental health facility, does not allocate enough funds to school renovations and school subsidies to towns and municipalities, and doesn’t adequately address the financial gap for the next biennium. The gap is the difference between experts’ predictions of revenue and the cost of current ongoing programs. The Senate Republicans are firmly entrenched in supporting the position that the state with its surplus should not be passing a budget that requires additional borrowing, must control new on-going expenses, and that the budget should further reduce the taxes Mainers pay. If the Senate Republicans refuse to budge from these positions, then the Legislature must either revise the budget or accept a majority passed budget with many components that will become effective after the fiscal year has begun.
BETR bill headed to the Governor, Veto a Likely Possibility – LD 2516, An Act to Improve Standards for Public Assistance to Maine Employers, also know as the BETR bill and the Living-Wage Bill, has been funded by the Appropriations Committee on a party line vote, Democrats for, Republicans against, and is on its way to the Governor. The BETR program has been one of the most important state tax credits used by businesses to expand their operations in Maine and for attracting new businesses and jobs to Maine. LD 2516 would add to the BETR program a requirement that all businesses that receive more than $10,000 in tax credits must pay its employees the "Super Minimum Wage" standard set for each county by the Maine Department of Labor. For example all employees in Cumberland County must receive at least $9.20 an hour. In Sagadahoc County the wage is set at $9.66 and in Kennebec County it is set at $8.07. If a company receiving the BETR tax credit pays employees at less then the established new "Super Minimum Wage", than they would lose on a percentage basis some of the tax credits. Three of the largest firms, identified by the Bangor Daily News, which would be affected by this legislation are Hannaford Bros. which has 1906 employees below the proposed standard, UNUM-Provident with 1213 employees, and Peoples Heritage with 1073. Governor King, who is known for his ardent support of the BETR program as one of the state’s most valuable tools in keeping and attracting jobs to this state, has major concerns that the legislation would discourage businesses from locating in Maine and would hurt the rural and economically needy areas of the state. Speculation is running high that the Governor will veto this bill as sent to him. The Legislature would then have the opportunity to amend the bill to include just the funding for the continuation of the BETR program as presently designed.
Regarding Vetoes – Rumor has it that the Governor may veto as may as 30 pieces of legislation. Every bill that the Governor vetoes must then be brought back for votes in the Senate and House. A two-thirds vote in both the Senate and House is required to override the Governor’s veto. Usually the Governor announces his vetoes on or about the end of the regular session. The Legislature then comes back into session about a week to ten days after the end of the regular session to vote on the vetoed bills.
Mutual Fund Company Taxation Bill Likely to be Enacted Monday. LD 2400, An Act to Create Employment Opportunities by Clarifying Maine’s Tax Laws Regarding Mutual Fund Companies, will have its final votes enacting the legislation in the House and Senate on April 24th or 25th. This Maine Bankers Association initiated bill received favorable votes to be engrossed in both the Senate and House on April 14th and has been amended to remove its fiscal note. Passage of the legislation will create new job opportunities by attracting mutual fund companies to set up operations centers in Maine. Rep. Jane Saxl is the lead sponsor of this legislation, which has proceeded with the strong support of the Taxation Committee co-chairmen, Senator Richard Ruhlin and Representative Ken Gagnon. Our bill, LD 2400, has also been strongly supported by the Governor, the Maine Chamber, and the Department of Community and Economic Development.
Governor Expresses Concern About "Patients’ Bill of Rights" Non-economic Damages Cap. LD 750, An Act to Establish A Patient Bill of Rights, has been enacted and sent to the Governor. The Governor has expressed concern about the size of the cap for non-economic damages, $400,000 in the bill that has been enacted by the House and Senate. While not opposing the patient rights to sue for economic damages and medical costs which have no cap in the legislation before him, the Governor has expressed support for a cap of $150,000 on non-economic damages. This was the amount supported in a minority report. Maine currently has one of the highest premium costs in the nation and if signed would place Maine in the situation of being one of five states to adopt a similar liability plan. If the Governor does veto LD 750, there is likely to be further legislative action to lower the cap for non-economic damages to $150,000.
Transfer Tax Bill Sent to Conference. The Senate and the House have passed different versions of LD 2643, An Act Ensuring Certain Land Transfers Accomplished through Stock Transfers are not Exempt from the Transfer Tax. As a result a Conference Committee with members from both bodies will report back with an amended compromise version on April 24th. This bill seeks to require payment of a transfer tax when the purchase involves a stock transfer, merger, or acquisition. As amended its exempts any bank owned property acquired through foreclosure. It remains unclear as to whether or not the Conference Committee can agree on a bill acceptable to both the House and Senate.
Signed by the Governor this week. (Copies to be sent next week to all Members)
LD 2245, An Act to Adopt the Model Revised Article 9, Secured Transactions
LD 2578, An Act to Provide for the Y2000 Allocations of the State Ceiling on Private Activity Bonds
LD 2684, An Act to Improve Oversight and Accountability of Student Loan Programs Funded with an Allocation of the State Ceiling on Private Activity Tax-exempt Bonds.
LD 2591, An Act Relating to Telemarketing
