Maine Gov. Paul LePage signed a new budget early Tuesday, ending the state’s first government shutdown in 25 years.
A $7.1 billion two-year spending plan was adopted three days into the new fiscal year that eliminates new taxes, which were vehemently opposed by the Republican governor. Democrats agreed to remove a hotel and motel lodging sales tax increase to 10.5% from 9% and a voter-approved 3% surcharge on households with incomes above $200,000.
“I thank legislators for doing the right thing by passing a budget that does not increase taxes on the Maine people,” said Governor LePage in a statement. “I especially thank the House Republicans for standing strong throughout these very tough budget negotiations to protect Mainers from an unnecessary tax hike.”
Democrats in exchange for eliminating the lodging tax received increased investments for Head Start programs, a two-year moratorium on behavioral health reimbursement rate cuts and $162 million in school spending. The budget was approved in the House by a 147-2 vote and 35-0 in the State Senate.
“We pledged to be the voice of the people in this budget debate and we never stopped fighting,” House Speaker Susan Gideon, D-Freeport, said in a statement. “This budget will increase education funding, lower property taxes, strengthen our economy and protect seniors and Mainers with disabilities.”
The end of the Maine budget impasse means the state will be positioned to make a $26,657 non-general obligation bond debt service payment owed on July 13. Maine GO bonds are rated AA by S&P Global Ratings and Aa2 by Moody’s Investors Service.