The Second Session of the 132nd Maine Legislature is a Wrap…Almost.
The Maine State Legislature almost completed their work on Tuesday, April 14th, around 10:30 pm. However, they did not adjourn Sine Die (without day), so they have not officially ended the Second Regular Session of the 132nd Legislature. Instead, they are scheduled to return on Wednesday, April 29th, for what is understood to be a day to take up any vetoes Governor Mills may issue.
While there may be bills officially still to be acted upon in the legislative process, Governor Mills has traditionally refused to act upon proposals, other than those she has vetoed, on a day she has determined to be only for the purpose of considering her vetoes.
The issue Governor Mills is most likely to veto, or ask the Legislature to recall from her desk, is LD 307, “‘An Act to Establish the Maine Data Center Coordination Council and Place a Temporary Limitation on Certain Data Centers.” As the title suggests, this bill prevents the development of any data centers in Maine, including those already in various stages of consideration in Sanford and Jay. Governor Mills had asked the Legislature to amend the bill to allow the project in Jay to proceed, but a majority refused to support that effort. At least three national anti-data center groups have campaigned for passage of the bill. The behind the scenes involvement of these national groups and the refusal of moratorium advocates to consider amendments creating limited exceptions for ongoing projects subject to enactment of the most rigorous data center regulation in the nation led project developers to conclude national groups sought a Maine moratorium as a low cost national talking point, and not a step necessary to protect Maine.
The project in Jay is more attractive to the Governor, and the public, given that it re-purposes the now closed Pixelle paper mill in Jay, and it offers the opportunity for jobs in that area. Jay is next door to the Governor’s hometown of Farmington, and the project is supported locally, and by labor unions.
If she vetoes the bill, Maine’s already applicable state and local statutes and codes, including Maine’s strong constitutional municipal home rule, will control development of data centers. It is possible that the Administration will be asking for the bill to be recalled from her desk in order to amend it to allow the Jay project to proceed. Alternatively, the Governor may consider vetoing along with issuance of an executive order to accomplish much of what the bill currently proposes while allowing at least one project to proceed.
How Governor Mills handles this, and all other potentially controversial issues, is very clearly impacted by her current candidacy in the race for Maine’s U.S. Senate seat now held by 5-term incumbent, Susan Collins. Mills’ change of position on gambling issues, issues related to Wabanaki sovereignty, tax increases, and use of the “rainy day” fund, amongst other issues, while presumedly harming her in the general election, are assumed to be an effort to defeat her opponent, Graham Platner, in the June primary. Platner is currently leading Mills in most polls by double digits.
The moratorium on data centers appears to be very popular amongst the Democratic base, if not the public in general. This will be part of the Governor’s consideration of how she handles her response to bill.
There are a couple of issues that have raised concerns for the business community. One of these proposals is LD 127 “An Act to Strengthen Legislative Oversight of Government Agencies and Programs by Reaffirming the Legislature’s Access to Confidential Records”. The impetus of this proposal is the Government Oversight Committee’s (GOC) ongoing investigation into the Department of Health and Human Services handling of child endangerment cases, several of which have involved the deaths of children. However, this effort is now in the context of politically motivated and unfounded claims of widespread Medicaid fraud.
A bipartisan majority of the committee wants legislators serving on the committee to be given access to what are currently considered privileged and confidential information held by state agencies. This will theoretically include tax information held by Maine State Revenue, any materials submitted by businesses or individuals for the purposes of licensing and regulation by any state regulatory agencies, and other individual and business information provided to state agencies in relation to ongoing or past investigations.
Currently the Office of Program Evaluation and Government Accountability (OPEGA) serves the GOC by conducting investigations and evaluations at the direction of the committee. OPEGA’s governing statute includes that “when authorized by the committee, the office also may examine or direct an examination of any state contractor financed in whole or part by public funds and any expenditure by any public official or public employee during the course of public duty, including, but not limited to, any expenditure of private money for the purposes of the agency or other entity.”
The concern expressed by a variety of Maine businesses is not that OPEGA will continue to have access to otherwise privileged or confidential information, but rather that the current proposal would allow the legislators themselves to directly access this information. OPEGA has the authority to review much of this information already, however, they are not allowed to present this material in a manner that could lead to public access. In LD 127, legislators are required to sign a code of conduct disallowing the sharing or possession of any privileged and confidential records. It also says the GOC will establish penalties up to and including expulsion from the Legislature. This appears to be at odds with Maine’s Constitution, Article 4, Part Third, §8, which states that no member of the Legislature shall be liable to answer for anything spoken in debate on the floor of either body, in any court or place elsewhere.
Given the experience of those of us who have spent decades working in the Statehouse this does not create a strong reassurance that such information will not be improperly shared or politicized.
Preti’s understanding is that Governor Mills opposes this effort, as does Democratic leadership, however, majorities in both bodies have, so far, endorsed it. The bill has not been finally disposed of, so there will be further attempts to get it to the Governor’s desk on the 29th. The bill carries a significant fiscal note.
The business community opposed the majority report of L.D. 1822, “An Act to Enact the Maine Online Data Privacy Act”. The bill was an attempt to protect consumers’ data from being used by bad actors and data harvesters; however, it also was considered a threat to businesses large and small using such data to identify customers and maintain relationships with those customers. The bill died after failing enactment in the House.
Also of note is L.D. 2018, “An Act to Amend the Requirements Governing Self-insurance Plans in the Paid Family and Medical Leave Benefits Program”, now Public Law 696. This was a Department of Labor bill to change the Paid Family and Medical Leave statute to disallow any pooling of risk by a group of employers in a self-insurance plan. Businesses had begun creating such shared risk programs in order to lower their costs in providing the benefit. The Administration took the position that employers should not be able to develop a program that complied in all respects with the law and maximized savings to the benefit of employers and employees alike. The Administration wanted more employers to be forced into the State’s PFML insurance product, thus making it theoretically more stable. The law will allow multiple employers to share the cost of legal, accounting and 3rd-party administrator expenses as long as the arrangements do not result in pooling of risk.
Supplemental Budget
As has been the case over the past several sessions, the Democratic majority passed the Supplemental Budget without a single vote in the House and Senate from the Republicans. There was unanimous support of the vast majority of the lines contained in the budget within the Appropriations and Financial Affairs Committee, but, other than the appropriation for 55% of education costs, the big-ticket items were party line votes.
Republicans opposed almost all new state positions, often noting the large number of state positions that are budgeted but remain unfilled. They also opposed any expenditures related to the Trump Administration’s new and more strict guidelines regarding Medicaid expenditures. These guidelines will create a greater risk of losing the federal share of Medicaid funds if mistakes are made in the administration of the program. These mistakes are often characterized as “fraud” orchestrated by recipients but are predominantly errors made by program administrators. Republican legislators expressed concern that this level of program accountability is not already in place and thus opposed the funding to implement it.
As has been widely covered in the media, the deal made between progressive Democrats and the Mills Administration regarding the “millionaire’s tax” and the $300 “affordability” checks being sent to 500,000 tax filers, is also firmly opposed by Republican legislators. It is understood that some Democratic legislators, and all of their Republican colleagues, see the checks as clearly an effort to attract support for the Governor’s U.S. Senate campaign.
Democrats’ opposition was mostly related to the belief that the $150 plus million from the “rainy day” fund used to pay for the checks, would be better spent on system-wide support for low-income people, children, the elderly, people with disabilities, people with substance use disorder, people with mental health issues, veterans, the homeless, food banks, and other more directed services.
In order to assure the support of the Democratic legislators who resisted, including the “affordability” payments in the supplemental budget, Governor Mills agreed to support a new 2% surcharge on any income above $1 million reported by an individual in the filing of their state income tax. The threshold at which this surcharge applies would be $1.5 million for heads of household and those filing jointly.
Effective Date and Ups and Downs
Assuming the Legislature does finally adjourn on April 29th, the supplemental budget, and any other new laws not having an emergency clause or a later specific effective date, will go into effect on July 28th.
The Legislature did enact modest increased access to dental services, a relatively small, but important cost of living increase for direct care workers, modest increased funds to sexual assault services, childcare access, rural health care, domestic violence services, emergency shelters and production of new housing, rental assistance, and veterans’ services. The Legislature also made significant changes to the school funding formula (EPS) to provide more state funding to low income districts and increased minimum teacher salaries, which will phase in at $50,000.
Unfortunately, they failed to increase access to eyecare. This continues the excessive delay and costs for eyecare for all Maine citizens, especially in rural Maine. They failed to allow adults with developmental disabilities to remain in homes they have lived in for many years, thus creating more instability for them and their families. They failed to support common sense testing and tracking of medical cannabis in order to assure the safety of the product for our most vulnerable cannabis users. This would also have given medical cannabis providers the ability to access banking, and, according to law enforcement, is the most effective way to prevent the international organized crime spreading through rural Maine in illegal grow houses.
There was also an enormous effort by Maine’s wild blueberry, dairy, potato, and other farmers, as well as loggers and other supporters of Maine’s heritage industries to provide some capital to these industries, but it fell short of the necessary 2/3 vote in the House. This is a $50 million bond proposal to fund grants and loans to these industries, including drastically needed drought relief. There was also a similarly supported effort to provide an ongoing $5 million a year from the real estate transfer tax to support these industries.
While both are technically still alive in the Legislature, they have both fallen prey to partisan bickering and a failure to prioritize Maine’s heritage industries over political points. Democrats, including Governor Mills, have been overwhelmingly supportive, only the top two Democratic leaders in the House opposed, and there has been relatively strong Republican support in the Senate. However, Republican leadership in both chambers strongly opposed the bond, and only a handful of dedicated supporters of farmers and loggers in the House Republican caucus were willing to oppose their leadership.
Another significant enacted bill was LD 2112, An Act to Authorize Municipalities to Form Community Choice Aggregation Programs to Procure Electricity, which aims to give Maine communities and their citizens an opportunity to aggregate load for community-designed electric supply programs. Such programs have been demonstrated to save ratepayers millions annually in Massachusetts. Maine will also study public financing of energy projects through LD 838, Resolve to Establish the Commission to Study Options for Public Financing of Transmission and Distribution Infrastructure, Generation Projects and Energy Storage Projects, rejecting for now examination of public ownership of such projects.
What Does the Future Hold?
There were definite challenges to good policy outcomes this session, not the least of which being the upcoming elections for the Legislature, the Governor, and the federal offices. Preti continues to be engaged in conversations with candidates from both parties and those unaffiliated for all these office, to assure we inform their policy considerations and maintain relationships and access as needed.
There will be a new Governor. As you all know, there is a crowded field in both the Democratic and Republican primaries and prominent “independent” or Unenrolled candidates in the race. Voters who are not registered in a party may also choose to vote in the primary in whichever party they choose on that day. If a primary candidate is able to effectively attract unenrolled voters, this could make a difference in the primary outcome.
There will be great deal of turnover in the State Legislature as well. This will not be due to failure by candidates to be re-elected, or simply due to term limits. There are many incumbents who are choosing to not run for re-election in both parties and both chambers.
One might also think there are several candidates running unopposed for election or re-election. That is true to some degree, but in some of these races the lack of a Republican or Democrat is simply because the parties have found candidates who will run as “independents” for those seats. The Democrats have done this in a handful of Republican leaning seats for several election cycles. This year the Senate Republicans have recognized the potential benefit of this strategy and appear to have found unenrolled candidates to run in Bangor, Biddeford, Lewiston, Knox County, and Lincoln County at the very least.
There are members of both the House and Senate that are running for the other body due to their own or others facing term limits or retirements. There will be Senate Democratic Primaries in both Lewiston and Scarborough involving house members who are not term limited. There are about a dozen House members running for Senate, and at least three Senators running for the House. There are a total of 15 Senators, either term limited, running for Congress, Governor, or choosing not to run for re-election. Out of the 35-member body, that is a significant turnover.
Preti will be paying close attention to all the changes in personnel, including members of the Mills Administration moving on to other roles. We will maintain relationships and build new relationships, as necessary, amongst the candidates running for office for the first time. We will be happy to connect, or reconnect, you to the candidates most relevant to you and most likely to win their races. The more they are aware of you and your connections to their districts the more likely they will be responsive to you, and us, when we are speaking on your behalf.
We will provide another update as the field of candidates becomes more settled and clear, and as we know more about leadership races, and likely fallout from the primary for Governor.
Preti looks forward to continuing to work with you and preparing for the next Legislative Session, whatever and whomever, that may bring. Please do not hesitate to reach out with any questions, requests for meetings with us or others, or needs you may have in preparation for the 133rd Legislature.