Governor Delivers His State of the State Address  

On February 3rd at 7:00 p.m., Governor LePage delivered his State of the State Address to a joint convention of the House and Senate.  The prepared text of the address can be found here.  Many expected the Governor to take this opportunity to discuss and promote his budget, particularly the tax reform package found within the Governor’s biennial budget package.  That is indeed what happened, as the vast majority of the speech discussed the budget and tax reform.  The Governor also touched upon the issues of energy costs and domestic violence but largely used this time with the full Legislature to talk taxes.  One surprise proposal offered by the Governor at the end of this Address was the call for a constitutional amendment to direct revenue growth to a mechanism to eliminate Maine’s income tax, a proposal the Governor is anticipated to submit to the Legislature this year.   

Another Nomination Complete 

On February 3rd, the Maine Senate unanimously confirmed Richard Rosen's nomination by Governor LePage to serve as the Commissioner of the Department of Administrative and Financial Services.  Rosen, a former State Senator who Chaired the Appropriations and Financial Affairs Committee, has been serving as Acting Commissioner of this Department since May, when his predecessor retired.    

Legislature Slowly Building Speed 

This week was a relatively slow week in Augusta.  Of course, the relentless snow we have been experiencing did not help with this week’s schedule, as legislative activities scheduled for Monday the 2ndwere postponed due to another storm.  Bills are starting to be heard in committee and next week we will see even more legislative hearings.  Though the pace is picking up, the Legislature still plans to be in recess the week of February 16th, with committees also not meeting that week. 

Tax Conformity Bill First Test of Legislative Session 

On January 29th, the Appropriations and Financial Affairs and Taxation Committees held a joint hearing on LD 138, legislation to conform Maine’s tax code to recent changes enacted by Congress to the federal tax code.  The Maine Legislature routinely enacts conformity legislation to align state tax policy with federal tax policy and, typically, these are pro forma bills.  At this hearing, however, two interest groups that routinely oppose business incentives took aim at this legislation and testified in opposition to depreciation language providing incentives to businesses placing new equipment into service, arguing the retroactive nature of this language does not incent investments in equipment.  This has now become a partisan issue, with support for this bill breaking down along party lines in the Taxation Committee.  LD 138 is now pending before the Appropriations and Financial Affairs Committee, which will vote on this bill before sending it to the House and Senate.  This bill is a test of how both parties will work together in the 127th Legislature.  Moreover, LD 138 is a test of the Democratic caucus’s resolve to pursue the job creation agenda that members of the caucus espoused before the current session began.