Mills now looks to shift state costs to federal funding but makes no commitment to matching federal PPP tax law

FOR IMMEDIATE RELEASE: Wednesday, January 27, 2021
MEDIA CONTACT: Julie Rabinowitz, Executive Director, 207-292-2722 ext. 102, Julie@mainepbp.com

AUGUSTA – On Monday, Governor Janet Mills and her administration revealed they would not match the federal tax provisions exempting struggling businesses from being taxed on PPP loans or allow the new PPP deductions to serve as additional stimulus as Congress intended.

Governor Mills justified this decision by claiming her administration could not afford to cover the $100 million of tax revenue that would be lost by matching federal tax policy. The Mills Administration needs this $100 million to keep the current fiscal year’s budget balanced—the second half of her two-year budget that increased state spending by $800 million.

Late this afternoon, after public outcry, she has indicated she may reverse this position if she can find enough federal money to cover state expenses.

“We are glad that the people of Maine have made their voices heard. Governor Mills should not fund her massive increase in state spending from businesses trying to stay afloat,” stated Julie Dumont Rabinowitz, executive director of Maine People Before Politics.

MPBP points out, however, that Governor Mills has not yet committed to match the federal government’s tax exemptions for forgiven PPP loans or allow the additional deductibles. She has merely asked her departments “to explore whether Federal funding may exist to help Maine provide the same beneficial tax treatment to PPP funds that the Federal government has.” 

Today’s statement from Governor Mills does not include any specifics or recommend spending cuts.  MPBP will continue to monitor how the Mills Administration proceeds.

“We urge both the Mills Administration and the Legislature to fully match the federal tax code. Doing so provides an additional lifeline to our small businesses while making the tax filing process less confusing for all taxpayers,” stated Rabinowitz.