Governor LePage Signs Budget

June 20, 2011

Governor LePage Signs Budget with Largest Tax Cut in Maine History, Pension Reform, Spending Realignments and a Major Down Payment on Welfare Reform

For Immediate Release: Monday, June 20, 2011 Contact: Adrienne Bennett (207) 287-2531

Augusta, Maine – Monday afternoon after a careful, businesslike approach examining the details; Governor Paul LePage put his signature on the biennial budget that reduces taxes for Mainers and businesses, reforms the State pension system and makes changes to welfare programs.

“In February legislators were given a plan which was very different from previous budgets with a focus on creating jobs, lowering taxes, reforming welfare and realigning spending to better reflect today’s realities. The budget I signed today reflects a step toward fiscal responsibility and a change in the way we must operate as a State,” said Governor LePage.

“I am encouraged by some of the work done and the thoughtful debates that were involved during this budgetary process. The State will now move toward a more sustainable pension system that Maine can afford and current and future retirees will benefit from.”

The two-year budget includes tax reform which provides $150 million in tax relief – including new tax code changes which conform to federal guidelines and a reduction in Maine's top income tax rate from 8.5 percent to 7.95 percent that is expected eliminate tax payments for 70,000 low-income Mainers. This represents the largest tax cut in Maine history.

Welfare reform is also a part of the 2012-2013 budget which emphasizes Maine will no longer be considered a welfare destination state. A new 5 year limit on welfare benefits which aligns Maine with other states, and conforms to federal law will go into effect. The limit does allow for certain exemptions for hardship cases – including those involving the elderly and disabled.

Drug testing will also be implemented for welfare recipients convicted of drug crimes and those who violate welfare rules will face stricter sanctions. A first offense will result in the loss of adult benefits and a second offense may lead to termination of full family benefits.

In addition, Dirigo Health will be phased out with an end date of January 1, 2014 and legal noncitizens will no longer be eligible for MaineCare benefits as of July 1, 2011. However, the Governor has made it clear that more work needs to be done. “We must continue make these types of changes to the system, not only to achieve significant savings, but to encourage Mainers to become self-sufficient. This is a down payment on welfare reform and, after implementing these changes and gauging the results, I look forward to doing more,” added the Governor.

Many give credit to the Governor for maintaining a message that pushed for fiscal change that hasn’t been seen in decades.

Both leadership in the House and Senate lauded Governor LePage for endorsing the budget Monday.

House Speaker Robert Nutting offered, “I am delighted that Governor Paul LePage today signed the biennial budget. This plan mirrors the reforms the Governor called for shortly after taking office. Among the highlights are $150 million in tax cuts, the largest in Maine history, and pension reform that will save taxpayers billions in the years to come. This budget also includes no cuts to education or programs that protect Maine’s most vulnerable. It’s also free of gimmicks like state shutdown days.”

“It is a validation of the outstanding work done by the Appropriations Committee and of the decision by Republican legislative leaders to pursue a bipartisan two-thirds budget,” said Senate President Kevin Raye. “By affording the minority party the respect of inclusion in the budget process we were able to work through our differences and secure a thoughtful budget that honors the core principles advanced by Governor LePage,” Raye added.

Senate Majority Leader Jonathan Courtney echoed his colleagues’ sentiments. “In just 40 days the Governor gave us a document that included substantial reforms to taxes, pension and our welfare system, and this vision survived the legislative process. It helps us take a major step in moving Maine forward,” Courtney said.