AUGUSTA (AP) – Some Senate support in both major political parties surfaced Monday for a temporary sales tax hike that could reduce proposed borrowing in a two-year state budget package pending in the Legislature.
Details circulated as budget debate in the House of Representatives, which had been expected to begin last week, was put off for another day.
As outlined by Republican Sen. Peter Mills of Cornville, the alternative plan would not borrow for current operations, but apply $140 million from a revenue bond toward the state’s unfunded pension liability.
A 1-cent surcharge on Maine’s 5 percent sales tax would be affixed from July 1 through October 2006.
The alternative plan also envisions reducing the top rate of the state income tax from 8.5 percent to 8 percent in January 2006 and broadening the sales tax base.
Gov. John Baldacci, meanwhile, issued a statement declaring his support for the revised version of his original $5.7 billion biennial spending blueprint that was produced by his allies on the Appropriations Committee’s Democratic majority.
“We need to focus on the progress made with this package as a whole and pass this budget,” he said.
Baldacci’s statement did not touch directly on the latest calls for a sales tax surcharge as a way to curb new bonding. He did reiterate his view that eschewing new broad-based taxes was a highlight of the Democratic approach to date. He also sought to counter criticism of the pending budget package’s reliance on new or increased fines and fees, saying they made up “less than one half of 1 percent of the budget.”
Baldacci said, as discussions went on throughout the State House, “I continue to meet with members of the Legislature from all parties to ensure that the budget strengthens our economy and creates opportunity for all citizens.”
Democrats have until the end of the week to take advantage of constitutional provisions that would allow them to pass a bill effective for the July 1 start of a new fiscal year with or without Republican support.
Republicans have suggested that passing a continuing resolution to guarantee current level funding for state government through the first three months of the new fiscal year would obviate any need to make final decisions by April 1.
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