AUGUSTA – Welfare reforms proposed by Gov. Paul LePage were endorsed Wednesday by the Legislature’s Appropriations Committee. The agreement removed a major barrier to progress in budget negotiations.

A few hours later, the committee endorsed major income-tax cuts and an increase in Maine’s estate tax exemption from $1 million to $2 million.

As budget negotiations picked up speed, Democrats and Republicans made concessions on some issues to make gains on others.

In bipartisan votes, the committee approved reductions in welfare benefits for legal noncitizens, endorsed a five-year limit for all Mainers who receive federal Temporary Assistance for Needy Families money, and increased sanctions for people who violate rules while receiving benefits. The committee also agreed on new drug testing provisions.

Sen. Roger Katz, R-Augusta, who negotiated changes to the governor’s original plan, said the effort is to bring Maine law more in line with federal law and the types of benefits that other states provide.

“It is recognized that Maine has been far more generous than our sister states,” he said. “It emphasizes personal responsibility and works to get people employed.”

The afternoon vote on human services — and the early evening approval of tax cuts — were signs of significant progress on the $6.1 billion budget for the two years that start July 1. To take effect, the budget will need two-thirds approval from the House and Senate.

LePage’s spokeswoman, Adrienne Bennett, said he is pleased by the progress on welfare reform, a key campaign issue for the Republican governor.

“From the standpoint of where we are now, he is encouraged,” she said.

While LePage had booked about $7 million in budget savings with his welfare proposals, the committee compromise would save $5.4 million, according to estimates released Wednesday.

The income tax cuts would drop thousands of low-income people from the tax rolls, reduce the top rate from 8 percent to 7.95 percent and make Maine conform to the federal standard deduction. At a cost of $91.6 million over two years, it’s the single biggest item in the $150 million tax cut plan from Republicans.

Last week, the committee voted to make Maine conform to federal rules for business equipment deductions, supported a credit for new investments made in Maine and voted to exempt meals at retirement facilities from the sales tax.

While other budget items were pending late Wednesday, the welfare cuts were especially sensitive for advocates for the poor and Democrats, who worked to blunt their impact.

In general, the committee’s welfare plan differs from LePage’s proposal by allowing more people to continue to receive benefits and creating more types of exemptions.

The approved language would allow legal noncitizens who now receive benefits, and those with applications pending as of July 1, to continue getting food stamps and federal welfare money.

There would be hardship exemptions for people who are elderly, disabled or victims of domestic violence, or have other circumstances to be defined by the state Department of Health and Human Services.

The plan calls for removing an estimated 1,550 legal noncitizens from Medicaid health insurance if they have not lived in the U.S. for at least five years. Pregnant women and those younger than 21 would continue to receive health coverage, as mandated by federal law.

Rep. Mark Eves, D-North Berwick, said Democrats will look for a way to extend health insurance to the elderly and disabled. He said the compromise that was needed to get an agreement meant the committee could preserve only two of the three benefits now received by legal noncitizens.

In his budget speech in February, LePage said he wanted to end “welfare-on-Day-One for legal noncitizens.”

With regard to drug tests, the state would have the power to test anyone who has been convicted of a drug-related felony in the past 20 years as a condition of receiving federal welfare benefits.

And, consistent with one of LePage’s goals dating back to last year’s gubernatorial campaign, the committee supported a proposal to cut off federal welfare money after five years.

The DHHS would have the power to grant certain exceptions, such as a physical or mental condition that would prevent someone from working, Katz said.

For those who violate the family contract that must be signed before they receive welfare benefits, the committee is proposing to cut off aid for the adult violator as a first step. If there’s a second offense, all members of the family would lose benefits.

“Hopefully, the family will give them a kick in the backside for the benefit of the children,” Katz said. 

MaineToday Media State House Writer Susan Cover can be contacted at 620-7015 or at:

scover@mainetoday.com