Maine Governor Janet Mills says her administration is looking into whether there are any existing federal funds to help cover costs associated with the Paycheck Protection Program.
Mills has lauded the federal program, which offered loans to businesses impacted by the pandemic that would not be subject to federal taxes and allowed related expenses as deductions. But the governor’s administration says matching the federal tax treatment would result in a loss of state tax revenue of about $100 million, putting a hole in the state’s spending plan.
Mills on Wednesday announced that they’ll be looking for federal funding to avoid imposing a state tax on PPP loans while keeping the budget balanced, which is required under state law. That forced the administration to submit a budget which included revenue from a state tax on the loans.
Mills faced some backlash immediately following the announcement. The Maine Policy Institute issued a statement praising the plan for tax conformity, but said the administration should look to cut spending before looking for federal money.
Former Governor Paul LePage issued a scathing response on social media, accusing the governor of putting a “$100 million hit on Maine’s small businesses and job creators.”