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Paul LePage: Governor should use budget surplus for tax cut, Mills cites uncertain economic outlook

Gov. Janet Mills proposed Mainers receive a one-time $500 check from the $411 million she plans to give back to the people, out of $822 million of surplus.

PORTLAND, Maine — Gov. Janet Mills introduced her proposal about how to handle the surplus $822 million in state budget Tuesday in a plan that involved giving half of it back to Maine people.

During her State of the State address, Mills suggested sending half the surplus, $411 million, back to Mainers in the form of one-time $500 checks.

Former Gov. Paul LePage, who is running against Mills in this year's election, called that plan "a massive mistake."

LePage said Mills should use the money to provide a more permanent tax cut instead.

"Rather than take 800,000 people and send them $500, take that money and reduce the income tax permanently, by that amount and people would get benefit year in and year out. If you send someone $500, they'll get a benefit for a week or ten days and then it's gone," LePage said in an interview Friday.

In a news release Tuesday, Mills addressed why she chose to issue the payments as a one-time give-back, instead of a more permanent tax cut.

Her office cites the non-partisan "Revenue Forecasting Committee." Maine’s nonpartisan RFC last year upgraded the State’s General Fund revenue forecast by 9.7 percent, or approximately $822 million, through Fiscal Year 2022-2023, which ends June 30, 2023. 

RELATED: Gov. Mills' budget proposal covers wide range of programs with half of surplus

She noted that the nonpartisan Revenue Forecasting Committee has said the long-term revenue projections are “volatile and susceptible to significant downside risk” in the years to come depending upon the course of the pandemic, Federal action, and inflation.

The governor's office said a permanent tax cut with a short-lived surplus could potentially lead to scenarios of cutting spending or raising taxes down the road when the state no longer has a surplus budget.

That release also cites three Republican senators -- Minority leader Jeff Timberlake, Sawin Millett, and Matt Pouliot -- who said they would prefer the state return the surplus to taxpayers in the form of checks.

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