Details of Budget To Be Voted On Later Today

Enclosed please find the details of the agreement reached by legislative leaders last night. We will post the full amendment as soon as it is finally drafted and public.

We’ve also attached the distributional analysis of the tax changes from MRS.

The amended budget agreement will:

1) Keep itemized deductions but charitable contributions are now counted against the itemized deduction cap

2) Increase single standard deduction to $11,600 in 2016, adjust annually for inflation.

3) Phase out taxpayer’s deduction (standard or itemized); for single the phase out range is between $70,000 and $145,000 of Maine Adjusted Gross income. The phase out starting point is adjusted for inflation beginning in 2018.

4) Tax Brackets for Single, in 2016:

$0-21,050: 5.8% (Standard deduction up to $11,600)

$21,051 – $37,500: 6.75%

$37,501 and higher: 7.15%

Tax Brackets for Single, in 2017:

$0-21,050: 5.8% (Standard deduction up to $11,600)

$21,401 – $50,000: 6.75%

$50,001 and higher: 7.15%

***Note that these brackets are based on taxable income with the new, increased standard deduction and will be indexed for inflation starting in 2018.

5) Take Sales Tax Fairness Credit in budget, reduce credit before phase out 60%, start single phase out at $20,000 instead of $15,000, but phase out at the same rate as in budget.

6) Military pensions completely exempt; no change to $10,000 retirement deduction

7) Long-term care premium and Section 529 Plan contribution subtraction modifications eliminated; addition modifications unchanged

8) $15,000 homestead for all in property tax year 2016; state reimburses 50% of additional $5,000; $20,000 homestead for all starting in property tax year 2017; state reimburses 75% of additional $10,000

9) Sales & use tax @ 5.5%; Meals @ 8% lodging @ 8% until 12/31/15 and then 9% starting 1/1/16.

10) Service provider to 6% 1/1/16 and repeal exemption for basic cable and inter-state calls.

11) Conform to federal estate tax exemption beginning 1/1/16

12) Removes the top cap on TANF eliminating the so-called welfare “cliff” and encouraging work without fear of losing benefits.

13) Changes formula for General Assistance program at a 70 percent reimbursement to all municipalities.

14) Increases funding for nursing homes; section 18 brain injury waitlist; increases funding for PNMI’s from 3% to 4%, and increases funding for section 21 intellectual disabilities waitlists.

15) Reform SNAP, TANF, SSI for legal non-citizens.

Rep. Jeff McCabe will introduce the amendment on the House floor, following the vote on the majority report from the Appropriations. The items already voted into the majority report and not addressed in the amendment are retained, including investment in education.

3 Comments on “Details of Budget To Be Voted On Later Today

  1. Dave, are you the Dave Bartlett I knew years ago? I’m from the Paris area. AND I had a classmate at Gordon, way back in the 40s named Arlene Bartlett Wakeman. Any connection? My email address is More power to you!!!
    Fred (Colby)


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