Legislators are expected to enact a Supplemental State Budget (LD 2212) by majority vote this month and adjourn the 2026 session so the law can take effect on July 1, 2026.  This partisan approach, which is becoming common on State Budget matters, means the legislation can be stuffed with priority items of particular interest to the majority party.  These add-on items typically include legislation that is on the Special Appropriations table awaiting final approval.  (As of March 12 there were 189 bills on the Appropriations Table, and the estimated total cost runs in the hundreds of million dollars per year; however, most of the bills will never come off the Table.)

Sooner – some State House observers speculate legislators could finish work this month and return in April for a brief special session to deal with any vetoes or a handful of lingering items.

Later – other State House observers speculate the legislators will definitely return after March for a special session that deals with numerous lingering items and any gubernatorial vetoes.

Higher Overtime Salary Threshold

Legislative Democrats earlier this year flagged a higher overtime payment salary threshold as a priority issue of their “Affordability Agenda.”  LD 599 would raise the threshold from $45,300.32 (2026) to $58,656.  Maine is one of only 6 states that have a threshold higher than the federal level.  All other states, including the other New England states, use the $35,568 federal level.  There has been no Maine-specific economic justification by a state agency or official impact analysis of increasing overtime costs.

Tax Issues – Conformity, PTET

Conformity with current federal income tax law is likely on small business expensing (Section 179) but not bonus depreciation.

An optional Pass-through Entity Tax (PTET) is included in LD 2212 but with an effective date of tax year 2026.  Business interests want it retroactive to the 2025 tax year.

BETR Program

Governor Mills initially proposed elimination of the Business Equipment Tax Reimbursement program for all entities that still use it.  However, the proposal has been revised to phase out coverage of retailers, allowing 50% reimbursement in tax paid in 2027 but not for taxes on retail property during 2028 and after.

Other Pending Issues

Data Privacy (LD 1822), which would impose a tight regulatory scheme on the processing of consumer data, is moving toward enactment despite strong opposition from business interests.

Climate Superfund (LD 1870), which would impose stiff financial penalties on “climate polluters” (oil companies) has not been considered yet by the Senate and House.