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Advocacy Update: Maine's Legislative Session is Off and Running + Federal Update

by Jennifer Gray

The second session of Maine’s 128th Legislature is either moving along quickly or slowly depending on what issues you’re working on. Here’s an update on some of the issues we’re tracking plus a federal update.


The Labor, Commerce, Research and Economic Development Committee held a public hearing last week on LD 1769 which addresses overtime labor laws.  It proposes to amend Maine’s labor laws to decrease the number of employees who qualify for overtime compensation based on their salary and responsibilities. We’ll be following this issue as it impacts the broad nonprofit sector. It’s interesting to note that Maine’s overtime rules are currently more generous than the federal rules. The changes to the federal rules have stalled as a result of court action.

Tax Conformity

Maine is a static conformity state which means that we generally conform our state income tax code with the federal income tax code but the changes don’t happen automatically. Due to the federal tax law changes, Maine will be considering whether and how to conform with these changes. Generally, Maine doesn’t conform its rates with the federal rates but rather the deductions and exemptions.

Should Maine choose to continue to conform exactly, the impact would be an increase in taxes that lower to middle income taxpayers would largely pay. The Governor has taken the position that he would not support a tax increase. Others oppose tax increases that are regressive in nature. The Appropriations and Taxation Committees held a briefing last week. They are waiting for the Governor’s conformity bill which is due later this month. We plan on tracking this issue and will keep you informed as much as possible. Here’s a link to the report released at the briefing:

Taxing Nonprofits

It’s our understanding that the Governor is interested in finding ways in which to tax nonprofits and will be offering a bill at some point during the session. Stay tuned.

Federal Update

Not much has changed with respect to completing FY 2018 appropriations. We are still waiting on a budget deal. The latest is that Republicans pushed for a 2-year deal totaling $286 billion. That would increase defense spending in each year (FYs 2018 and 2019) by $80 billion and non-defense spending by $63 billion. Republicans also want most of the non-defense increase to go to infrastructure spending, while Democrats oppose restricting where the increase goes.

Another continuing resolution is needed this week. It will extend government funding to mid-to-late March. Our sense is that a CR will pass and a shutdown will be avoided.

The President’s FY19 budget request is scheduled to be released Monday, February 12. We anticipate very significant cuts in domestic programs. MANP is part of an informal coalition working  to push for parity between defense and non defense spending in the federal budget.

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