For Immediate Release: Thursday, October 18, 2018
Contact: David Heidrich, Director of Communications
Department of Administrative and Financial Services, (207) 624-7800

LePage Administration Releases Framework for Upcoming State of Maine Biennial Budget

A complete and balanced recommended budget proposal will be presented to the incoming administration’s transition team next month.

AUGUSTA –Building on the accomplishments of the last eight years, today, the Maine Department of Administrative and Financial Services (DAFS) released details about the recommended FY 2020/2021 biennial budget proposal Governor Paul R. LePage will be providing to the incoming gubernatorial administration.

The budget document consists of ten key principles for advancing public policy in Maine and provides a framework of accomplishments and recommended next steps for each principle. It will be followed in November by a fully developed, balanced budget proposal, which will serve as a starting point for the governor-elect and their transition team as they develop the state’s next two-year budget submission. The framework is not intended to be inclusive of all the governor’s accomplishments or policy recommendations; however, it provides Mainers with a better understanding of the reforms in our state over the past eight years and potential next steps.

“During my time as governor, our administration has cut taxes, repaid $750 million to Maine’s hospitals, eliminated a $200 million Medicaid shortfall, reformed our state’s public pension system, brought stability to state finances and implemented pro-business, pro-growth policies across state government,” said Governor LePage. “Today, our economy is strong and growing, with 4 percent personal income growth in three of the last four years, and I would urge my successor to pursue policies that maintain and advance these successes. The budget that I will present to the incoming administration will close Maine’s structural gap and provide a blueprint that will continue to contribute to Maine’s strong and growing economy.”

During his two terms, Governor LePage reduced individual income taxes in Maine by 20 percent, and our state is currently collecting record income tax revenues. Among other recommendations, the governor’s budget framework will recommend further reductions in Maine’s individual income tax rates, with a proposal to replace Maine’s existing tax rates and brackets with two marginal income tax rates of 4.75 percent and 6 percent. Such a move would dramatically improve Maine’s competitive standing by positioning our top individual tax rate closer to the New England and national averages and would return Maine’s top rate to 6 percent, the lowest rate since the income tax was introduced in 1969.

Additional principles Governor LePage will include in his budget proposal include introducing a hospital tax to pay for Medicaid expansion, reversing an unaffordable 150 percent spending increase in municipal revenue sharing, and directing a greater portion of state education dollars to classroom instruction rather than administrative costs.

“Late last year, Governor LePage directed the Department of Administrative and Financial Services to expedite the biennial budget development process,” said Finance Commissioner Alec Porteous. “As a result, the LePage Administration will deliver to the governor-elect a completed balanced budget proposal in November. The governor-elect and their team can take or leave the policy proposals contained in the budget, of course, but our goal is that it will contain a number of good governance measures that any governor would want to retain and that it will be a strong foundation for the upcoming biennial budget submission. The reason for this approach is straightforward—the three month period from November’s election to the February budget submission deadline is simply too narrow a window for an incoming governor to adequately craft, from scratch, a fully-developed biennial budget. Governor LePage wants to ensure that the transition to a new administration is as seamless as possible and the next governor can hit the ground running when it comes to developing the FY 2020/2021 biennial budget.”

In addition to building on the accomplishments of the LePage Administration, the governor’s budget proposal will include the core funding and operational requests of agencies and departments throughout state government. DAFS will provide a complete and balanced biennial budget to the governor-elect and their transition team shortly after the November 6, 2018 general election. Maine’s incoming governor is required by law to present their biennial budget submission to the Maine Legislature by Friday, February 8, 2019.

Read More: Recommended State Budget: Key Principles & Framework

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