AUGUSTA, Maine (AP) — Majority Republicans expressed delight and Democrats relief as Gov. Paul LePage on Monday signed into law a two-year, $6.1 billion state budget that calls for tax breaks for Mainers, pension rollbacks for state workers and tougher welfare rules.

The budget, approved with bipartisan support of the Legislature last week, takes effect July 1, the start of fiscal 2012.

“The budget I signed today reflects a step toward fiscal responsibility and a change in the way we must operate as a state,” LePage said. It calls for $150 million in tax cuts, comprising what LePage and Republican legislative leaders called the largest tax cut in state history. Maine’s top income tax rate drops from 8.5 percent to 7.95 percent. Other tax code changes overall are expected to eliminate tax payments for 70,000 low-income residents.

The budget includes cuts in the pension system to help pay down an unfunded liability in the state retirement system.

The spending package also calls for welfare rollbacks, such as eliminating benefits for legal noncitizens not currently receiving them. Welfare recipients convicted of drug crimes will have to undergo drug testing, and those who violate welfare rules will face stricter sanctions, LePage said.

Senate President Kevin Raye, R-Perry, said Democrats and Republicans were able to work through their deep differences after Republicans pledged early in the legislative session to give the minority party a voice in deliberations.

Raye, who called the budget “transformative” for Maine, and House Speaker Robert Nutting of Oakland expressed “delight’ with the governor’s signing, which came with no fanfare and after what the governor called “a careful, businesslike approach examining the details.”

The budget doesn’t include cuts to education or programs that protect Maine’s most vulnerable, Nutting said. It’s also free of “gimmicks,” such as state shutdown days, he said.

The House Democratic leader, Rep. Emily Cain of Orono, said she was relieved that the budget had been signed. Five months ago, she noted, many doubted that the legislators’ differences could be resolved.

“Democrats strongly opposed the governor’s original budget, but we worked vigorously with Republicans to find a compromise we could support,” Cain said. “We understand no compromise is perfect.”

Copyright 2011 The Associated Press.

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