The budget conversation will begin in earnest when Mills files her two-year spending plan, though the liberal Maine Center for Economic Policy issued its framework on Tuesday. Mills expressed opposition to income tax hikes in it, but it illustrates the challenges of increasing funding without tax hikes.
The group sees $644 million in extra money needed to fund three obligations that have gone unmet, paying for it largely with a tax hike on high earners that Mills opposes. The Maine Center for Economic Policy wants the state to spend nearly $782 million more over the next two budget years — with most of that funding 55 percent of local K-12 education costs and funding voter-approved Medicaid expansion that Mills has already begun. Another long-unmet priority for Democrats is sending 5 percent of income and sales tax revenue to cities and towns, but that money is included in state revenue projections.
They would pay for that with $518 million in tax increases and taking $213 million from the record surplus left by former Gov. Paul LePage, a Republican who pushed for cuts in taxes and the welfare rolls while booking savings in other ways, including hiring fewer state workers.