On Wednesday the Maine Senate voted 24-10 to pass the supplemental state budget bill that would exempt about 28,000 businesses from paying state taxes on federal Paycheck Protection Program loans. Two Republicans joined the Democratic majority in passing the measure after a provision to restore some funding for a homeless veterans coordinator position within the Bureau of Veterans Services was added back into the bill. That addition also ensures federal funding for Maine veteran cemeteries will remain earmarked for that use. The additions were needed for Republican Senators Brad Farrin of Norridgewock and Rick Bennett of Oxford and gave the bill the two-thirds majority it needed to clear the Senate chamber.
The package with the new amendments still faced a challenge in the House of Representatives, where Democrats hold 80 of the 151 seats and will need at least 17 Republicans to vote with them to gain two-thirds support and move the bill to Governor Janet Mills’ desk.
Debate on the tax conformity provision of the supplemental budget comes as tax filing deadlines loom. The state filing deadline for corporations is Monday and the income tax-filing deadline is April 15. The full Legislature convened Wednesday for only its second set of COVID-19-restricted floor sessions since lawmakers were sworn in two months ago.
An initial proposal by the Governor, did not extend the tax relief to businesses that received more than $1 million in PPP funds but still covered about 98 percent of the businesses that benefited from the program. Last week Democrats added those businesses to the mix, tacking another $100 million to the cost of the bill.
Late into the night Thursday, the legislature finally approved a compromise deal on a supplemental budget after the House failed to pass the original bill, this bill will now go to Governor Janet Mills’ desk.
The approved budget includes:
- $47 million to exempt unemployment benefits from state income taxes
- $100 million to exempt Maine businesses who got relief from the Paycheck Protection Program from paying state income taxes on that money
- $30 million in state and federal money for nonprofit providers who serve Maine seniors and people with disabilities. The money is targeted for providers that did not get PPP funds, state grants or other relief
- $8.2 million for the state Rainy Day Fund
- Money to hire a homeless veterans coordinator and maintain veteran cemeteries
- Establishes a fund to address growing concerns about PFAS, known as “forever chemicals”
- Invests in a new child welfare information system to improve efficiency and help DHHS track and share data
The Senate finally adjourned just after 1:30 a.m. Friday, followed minutes later by the House.